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7 Essential Tips for VA Home Buyers in Hawaii

home buyers

Veterans and military members understand the power of preparation better than most.

That’s good news considering most home buyers still lack a solid grasp of what it takes today to land a home loan.

VA loans tend to feature more flexible and forgiving requirements than other loan types. But this no-down payment program is also a specialized option for home buyers.

Here’s a look at seven essential tips for veterans and service members considering a VA home loan.

1. No COE to start

You don’t need your Certificate of Eligibility to begin. You don’t even need to know if you’re eligible for a VA loan to start.

Lenders will typically obtain this critical document for you using an automated system.

2. Pre-approval is critical

This shows sellers and real estate agents you’re a serious buyer. Some agents won’t even accept an offer on a home without a copy of your pre-approval letter.

Pre-approval also gives you a clear sense of what you can afford and how much house you can buy. The last thing you want is to get under contract only to learn you can’t afford the payments on the home.

3. Find VA-knowledgeable agents

Real estate agents play a key role in the home buying process. But some know VA loans better than others.

VA-savvy agents can help borrowers avoid properties likely to pose a problem for the VA’s appraisal process. They can also lean on their understanding of VA closing costs to maximize your dollar.

4. Prepare for upfront costs

Most VA buyers take advantage of the $0 down benefit. That’s a huge opportunity that helps get veterans into homes now.

But homeownership can come with other upfront expenses, from making an earnest money deposit and paying for an appraisal to possibly covering a portion (or all) of your closing costs.

5. Understand closing costs

You can negotiate with the seller to pay some or all of your closing costs. There’s no limit to how much they can contribute to cover loan-related costs.

In addition, sellers can pay up to 4% of the purchase price to pay for things like prepaid property taxes, insurance and HOA Fees.

6. Buying condos

Veterans can only purchase condos in VA-approved developments. Lenders can help try to get an unapproved one on the list, but the process can take some time. In Hawaii there are several VA Approved Condo Buildings.

Adjust your home-buying timeline accordingly.

7. Not a one-time benefit

Veterans can use the VA loan program over and over again. It’s even possible to have more than one at the same time.

Veterans who’ve lost a VA loan to foreclosure may be able to buy again, too.

Its great to plan ahead and know you have a chance at Home Ownership when you PCS to Hawaii.

For more information please feel free to contact us today.

Our Team with having over 45 years of experience helping Military Buyers and sellers in Hawaii, We would like to Thank you for your service.

Mahalo

Ryan Riggins (RA)

John Riggins Real Estate

808-330-9105


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Money Down the Drain

iStock_000012313013Small200.jpgPrivate mortgage insurance is necessary for buyers who don’t have or choose not to put 20% or more down payment when they purchase a home. It is required for high loan-to-value mortgages and it provides an opportunity for many people to get into a home who otherwise would not be able.

The problem is that it is expensive and a homeowner’s goal should be to eliminate it as soon as possible to lower their monthly payment and avoid putting good money down the drain.

FHA loans made after 6/1/13 that have 90% or higher loan-to-value at time of purchase have mortgage insurance premium for the life of the loan. FHA loans made prior to 6/1/13, can have the MIP removed after five years and if the unpaid balance is 78% or less than the original loan-to-value.

VA loans do not require mortgage insurance.

Conventional loans, in most cases, with higher than 80% loan-to-value require mortgage insurance. The cost of that insurance varies but with a $250,000 mortgage, it could easily be between $100 and $200 a month.

Your monthly mortgage statement should itemize what your monthly fee is for the mortgage insurance. Unlike interest that is deductible, most homeowners are not able to deduct mortgage insurance premiums.

If you plan to remain in the home or to stay there for a considerable number of years, the solution may be to refinance the home. If the home has increased since it was purchased, the loan-to-value at its new appraised value may not require PMI. You might even be fortunate enough to obtain a lower rate than you currently have.


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Why Use a REALTOR®

A REALTOR® is a licensed real estate salesperson who belongs to the National Association of REALTORS®, the largest trade group in the country.

Every agent is not a REALTOR®, but most are. If you’re unsure, you can ask your agent if they’re a licensed REALTOR®.

REALTORS® are held to a higher ethical standard than licensed agents and must adhere to a Code of Ethics.

Some REALTORS® are brokers, while some are agents. Unfortunately, people use the term interchangeably: there are some differences.

Brokers are usually managers. They run an agency and have agents working under them as salespeople. They might own a real estate brokerage or manage a franchise operation. They must take additional courses and pay additional fees to maintain their state-issued broker license.

An agent, on the other hand, is a salesperson selling on behalf of the broker.

Agents are also state licensed and must pass a written test before legally acting as a real estate agent. Each state has its own licensing laws and standards.

Some states—like Illinois—have eliminated the real estate salesperson license and mandate all agents take additional course work and pass another test to become brokers. They are broker associates still selling under a managing broker.

The Typical REALTOR®

There is a stereotype of the typical REALTOR® that must be dispelled: the stereotypical agent works a few hours a day and makes millions of dollars a year. Reality TV shows perpetuate this myth.

On television, buyers find the perfect house after visiting just three homes—and write an offer that is accepted immediately. The next thing you know, they’re moving in!

Nothing could be further from the truth.

The typical buyer searches with a REALTOR® for about 12 weeks and looks at about 10 properties before selecting a home, according to the National Association of REALTORS®. They then wait about 30 days—on average—or the deal to close. The agent is only paid once the deal closes.

If the buyer decides to sign another lease—or not to buy—that agent is not compensated. The same is true of listings. If the listing does not sell, the agent is not paid.

The average agent earned $47,700 in 2013, according to the National Association of REALTORS® Member Profile 2014.

Selling real estate is a commission-only business. That means an agent can work with a buyer for months without ever making a commission—because deals fall though and not every listing sells. It’s a business run on trust and faith.

Also, many people see the commission check at the closing table and have no idea how that money is split. They think their agent walks away with all of it—that’s just not true.

Remember, agents work for brokers. The commission check is made payable to the brokerage which then cuts a check to the listing agent and the selling agent. Both agents also must pay a percentage of their earnings to their broker.

Generally, agents also are responsible for paying their own federal and state income taxes, social security tax, and health insurance.

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10-Step Guide to Buying a House

Are You Ready to Become a Homeowner?
Whether you’re becoming a homeowner for the first time or you’re a repeat buyer, buying a house is a financial and emotional decision that requires the experience and support of a team of reliable professionals.

Get a REALTOR®
In the maze of forms, financing, inspections, marketing, pricing and negotiating, it makes sense to work with professionals who know the community and much more. Those professionals are the local REALTORS® who serve your area.

Get a Mortgage Pre-approval
Most first-time buyers need to finance their home purchase, and a consultation with a mortgage lender is a crucial step in the process. Find out how much you can afford before you begin your home search.

Look at Homes
A quick search on realtor.com® will bring up thousands of homes for sale. Educating yourself on your local market and working with an experienced REALTOR® can help you narrow your priorities and make an informed decision about which home to choose.

Choose a Home
While no one can know for sure what will happen to housing values, if you choose to buy a home that meets your needs and priorities, you’ll be happy living in it for years to come.

Get Funding
The cost of financing your home purchase is usually greater than the price of the home itself (after interest, closing costs and taxes are added). Get as much information as possible regarding your mortgage options and other costs.

Make an Offer
While much attention is paid to the asking price of a home, a proposal to buy includes both the price and terms. In some cases, terms can represent thousands of dollars in additional value – or additional costs – for buyers.

Get Insurance
No sensible car owner would drive without insurance, so it figures that no homeowner should be without insurance, either. Real estate insurance protects owners in the event of catastrophe. If something goes wrong, insurance can be the bargain of a lifetime.

Closing
The closing process, which in different parts of the country is also known as “settlement” or “escrow”, is increasingly computerized and automated. In practice, closings bring together a variety of parties who are part of the real estate transaction.

What’s Next?
You’ve done it. You’ve looked at properties, made an offer, obtained financing and gone to closing. The home is yours. Is there any more to the home buying process? Whether you’re a first-time buyer or a repeat buyer, you’ll want to take several more steps.


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Top 5 Reasons to Buy a House Right Now

Buying a house is a highly individual decision—and a local one—but current trends are creating a favorable situation for many would-be homeowners.

Interest rates are low, employment is rising, home prices—in most markets—are still well below their peaks, and rents are through the roof.

Every family and each individual has various factors affecting the ability and the decision to buy a home. If you live in a market where studio apartments are $2,400 per month—while nearby condos sell for $300,000—it might make sense to buy a house instead.

(Remember, a local REALTOR® always is your best resource in helping you assess market conditions.)

Five Compelling Reasons to Buy a House Right Now

1. Interest Rates Are Still Low

Mortgage interest rates are still low—for now.

A 30-year-fixed-rate loan now averages 4.16%, according to Freddie Mac, but many economists believe we will see 5% rates next year. As interest rates increase, so do your monthly payments.

A $300,000 house at 4.16% with 20% down would have a monthly payment of $1,168. With a 5% interest rate, that payment increases to $1,288.

2. There’s More Inventory

As more houses enter the for sale market, prices stabilize.

“Inventories are at their highest level in over a year, and price gains have slowed to much more welcoming levels,” said Lawrence Yun, Chief Economist at the National Association of REALTORS®.

The upside is consumers now have more choices, if they are looking at existing homes.

New homes are another story: Yun says new construction needs to double its current production to meet market demand.

3. Home Prices Are Going Up

Home prices are rising.

The median price of an existing home was $223,300 in June, or 4.3% higher than June 2013. That’s the 28th consecutive month of year-over-year price gains, and economists expect that trend to continue. However, we are still at least 20% off the peak prices of 2006.

“Attempting to buy a home when the market is at its lowest point—or to sell at the peak—is tricky,” said Jonathan Smoke, Chief Economist for realtor.com®.

He compares it to trying to time the stock market.

“You might get lucky one or two times, but overall, timing the market does not work,” Smoke added. “It all points to purchasing power, and that’s a reflection of price and interest rates, which will both be higher in the future.”

4. Rents Are Sky-High

If you live in a big city, then you know rent is astronomical. In San Francisco, many people are spending 42% of their monthly income to pay the rent. Nationwide, rents are rising at a 4% annual clip.

It’s not unusual to see adults rooming together in expensive cities like New York, San Francisco and Chicago, but everyone needs his or her own space at some point.

Buying a home would lock in your monthly payment and stabilize your finances with a fixed-rate mortgage. This is, of course, assuming you don’t live the San Francisco area, where the average price of a home is $1 million.

(If you’re renting and never thought you could afford to buy a house, try our Rent vs. Buy calculator to see what’s possible.)

5. Employment on the Rise

Perhaps nothing is as important to the financial stability you need to buy a home as steady employment. The U.S. economy is finally adding jobs—about 200,000 new jobs per month.

The next generation of home buyers—the Millennials—has been particularly affected by the nation’s job slump. Saddled with student loans and tight lending restrictions, many in this generation have been living with their parents to save money until the economy picks up.

If your employment prospects look good these days and the other four factors check out, then it may indeed be the right time for you to buy a home of your own.


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Which Filter to Use?

A dirty air filter decreases the effectiveness of your HVAC system because it inhibits airflow and allows dirt, dust, pollen and other materials to blow through the system.

The challenge is how often it should be changed to keep the system working efficiently and extend the equipment life.   Too often and you’re wasting money and not often enough and your increasing the operating and maintenance costs.

Fiberglass panel filters are inexpensive and easy to find but they’re not very efficient and they allow most dust to pass through.  They were popular years ago but there are much better products available currently.

Pleated air filters are available in MERV ratings from 5 to 12. As these filters collect dirt and other particles, they become less efficient to the point of impacting air flow.  Allergy sufferers can benefit from this type of filter.  These should be changed every two to three months based on local conditions.

HEPA filters stand for High Efficiency Particulate Arrestance. They are very efficient and more expensive than previously described filters.  Since they are very efficient, they require changing more frequently; possibly, every month.

Electrostatic air filters are permanent and washable. They generally cost more initially but the savings will be based on how long they last.  This type does not add to landfill issues or produce ozone.

Improperly maintained filters will lower the quality of the air in the home, have a negative impact on air flow, cause it to use more electricity and eventually require maintenance to the systems.

In an attempt to easily compare filters, a rating system was created called MERV, an acronym for Minimum Efficiency Reporting Value.  The rating from 1 to 16 indicates the efficiency of a filter based on standards set by ASHRAE.  Higher ratings indicate a greater percentage of particles are being captured in the filter.

To create a system to remind you when to change your filters, set a reminder on your electronic calendar to recur for whatever frequency you determine is best for you.   Be sure to keep a supply of filters on hand to be ready to change them out when the time comes.


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Back to School Home Organizing Tips

The lazy, crazy days of summer are on the wane. Are you ready to get the kids back to school? Here are some ideas to get you reorganized and re-energized for the new academic year.

Ease into your schedule — Practice earlier bedtimes and getting up to an alarm the week before they’re required. Create a morning checklist, written on a fun chalkboard or colorful poster in your child’s room so they know what is expected every morning; this is especially helpful for dawdlers and daydreamers. Can’t get by without TV in the morning? Set a requirement that everyone must be dressed and done with breakfast by the time the show’s over.

Plan to plan — Put up a big, easy-to-read calendar for major activities where everyone can see it. Paper is great, but a peel-and-stick dry-erase wall decal is a fun and fashionable choice, plus it’s easy to move and doesn’t leave holes in the wall. The modern family can also set up their phones to share calendars and set reminders electronically.

Make a practice run — If the kids are just starting kindergarten or starting a new school, or you’ve finally set up that carpool you’ve been meaning to organize, make sure you get your timing down with a dry run out to the campus and then off to work or wherever you need to be. Remember to allow for more traffic and longer wait times once the buses and school commuters are back on the road as well.

Check in for a check-up — Is everyone up to date on shots? Do you need signed sports physicals and releases? Don’t leave them till the last minute or your little athlete could start the season benched.

Conquer the kitchen – The start of the school year is a great time to kick off menu planning. You can do your prep on Sunday as a family to make afterschool events and homework run more smoothly and not interfere with dinner. Another simple yet effective tip: Make lunches –theirs and yours – the night before.

Nighttime setups — While you’re packing up those lunches, why not organize a few more chores the night before to make the morning just a little less hectic? Set out the next day’s outfit, from underwear to outerwear. Pack up bags and backpacks and ensure homework makes it back to school. You can even put breakfast dishes on the table to save a few precious moments in the morning.

Create Homework Central — It doesn’t matter if kiddo likes to work in his room alone or at the kitchen table where he can see what’s going on. A tub filled with homework tools and supplies can be easily moved, sorted and restocked. Get a list from your kids’ teachers to know what is important to have on hand.

There’s always a bit of mayhem associated with school mornings, but if you start the new school year with these time-saving organizational tips, you can cut back on the craziness and keep control over your time and home!