Real Estate

What You Need to Know When Obtaining a Mortgage

July 14, 2016, 12:14 PM HST
* Updated July 14, 12:19 PM
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When Hawai‘i homebuyers are looking to obtain a mortgage on Maui, they will have the basic challenges and opportunities as the residents of the Mainland US, but there are a few newly added points that should be noted.

Of course, you want the best Maui home mortgage possible, but you also want to make sure that you are fully informed, and are entering a good-faith contract that will support the most optimal repayment plan for your long-term Maui property investment.

Firm statistics reveal that mortgage applications rose 9.3% this past week, according to the Mortgage Bankers Association.

In addition, the average contract interest rate for 30-year fixed mortgages decreased to 3.83% from 3.85%, and decreased from 3.12% to 3.11% for 15-year fixed rate mortgages.

”Continued home price appreciation has been squeezing housing affordability, driving a two-year downward trend in the share of consumers who think it’s a good time to buy a home,” said Senior Vice President and Fannie Mae Chief Economist Doug Duncan. “The current low mortgage rate environment has helped ease this pressure, and fewer than half of consumers expect rates to go up in the next year. While the May increase in income growth perceptions could provide further support to prospective homebuyers as the spring/summer home-buying season gains momentum, the effect may be muted by May’s discouraging jobs report.”


So, it seems that it is indeed a good time to purchase homes in the US, suggesting that the Maui real estate market is right in line with the national average with many great property opportunities available.


New guidelines have been implemented under the Consumer Financial Protection Bureau’s Qualified Mortgage. This new set of guidelines is meant to help avoid certain negatives that contributed to the past housing crisis.

These guidelines are what lenders use as a grid to prove that a borrower, in fact, does have the ability to repay a mortgage loan.

“Regulation Z” has been amended, aka the “Truth in Lending Act (TILA).” In the past, Regulation Z prohibited creditors from creating higher-priced mortgage loans without regarding a consumer’s ability to repay.


Sections 1411 and 1412 of the Dodd-Frank Wall Street Reform and Protection Act now require that creditors make a “reasonable, good-faith determination of a consumer’s ability to repay any consumer credit transaction secured by a dwelling.” This excludes open-end credit plans, timeshare plans, reverse mortgages and temporary loans.

See the Final Rule for Regulation Z here.

For more information about obtaining a mortgage on Maui, visit our Real Estate experts page.

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