Relocation
Make the most of your move to Hawaii with these 8 tips
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Have you been given the dream military assignment of Hawaii? Living in paradise while serving our country definitely has its benefits – including the possibility of buying a Hawaii home.
There are two great reasons to buy a home while you are stationed in Hawaii.
Many stories exist about military families moving to the islands for a few years and then leaving with thousands of dollars in appreciation. While the Hawaii housing marketing is one of the most expensive in the country, long-term home values have always positively appreciated over the past decades. In fact, Hawaii real estate historically has risen between 3 to 15 percent per year.
Imagine buying a house in Aiea for $900,000, and then reselling it 3 years later for over $1,000,000 – roughly, an annual appreciation rate of 4 percent. That is possible in the Hawaii housing market.
The VA Loan is a mortgage guaranteed by the U.S. Department of Veterans Affairs. It was created in 1944 and is an attractive loan option for many reasons:
In Hawaii, you can use the VA loan to buy many types of homes (which must meet minimum property requirements):
These types of homes can be purchased with zero down for a mortgage of up to $970,800. And if you need a mortgage above that limit, you simply need to put 25 percent down on the exceeding amount. For example, if your Hawaii dream home is $1,000,000, you would need to make a down payment of $68,368.75 (($1,000,000-$726,525) x 0.25).
The following military members are eligible for a VA loan:
If you are eligible, you will need to obtain a Certificate of Eligibility (COE) through any of these avenues: a VA approved lender, online through the VA’s eBenefits portal, by mail with a VA Form 26-1880. To apply, you will need basic information and you might also need other documentation, like a copy of your DD214 to prove military service.
Before or after receiving your COE, it is recommended to choose a VA lender that is based in Hawaii. There are a number of local Hawaii lenders who offer competitive rates and often have better service and results than a mainland lender. A VA lender will make the mortgage process much easier, especially in the unique Hawaii housing market. When shopping for a local VA mortgage lender, here are some questions to ask:
Once you are eligible for a VA loan and have found a reputable local lender, the Hawaii house hunt can commence.
Don’t go into sticker shock when viewing the high prices of Hawaii homes. Active duty military members stationed in Hawaii receive a significant BAH, which differs according to rank. If you were a married E09 living on an Oahu (Honolulu County) base, you would receive $3,633 as your BAH in Hawaii in addition to a Cost of Living Adjustment (COLA). Instead of using the BAH to pay rent, you could use it to pay mortgage payments – which is made even easier with a VA loan with nothing down.
Grade | With Dependents | No Dependents |
E01 | $2,670 | $2,004 |
E02 | $2,670 | $2,004 |
E03 | $2,670 | $2,004 |
E04 | $2,670 | $2,004 |
E05 | $2,961 | $2,220 |
E06 | $3,081 | $2,412 |
E07 | $3,258 | $2,682 |
E08 | $3,456 | $2,991 |
E09 | $3,633 | $3,015 |
W01 | $3,093 | $2,574 |
W02 | $3,339 | $2,988 |
W03 | $3,582 | $3,021 |
W04 | $3,651 | $3,117 |
W05 | $3,732 | $3,300 |
O01E | $3,297 | $2,961 |
O02E | $3,546 | $3,012 |
O03E | $3,660 | $3,072 |
O01 | $2,982 | $2,376 |
O02 | $3,078 | $2,865 |
O03 | $3,573 | $3,033 |
O04 | $3,756 | $3,270 |
O05 | $3,882 | $3,381 |
O06 | $3,912 | $3,567 |
O07 | $3,945 | $3,621 |
Using your BAH to buy a home can make a lot of fiscal sense. A $800,000 home in Ewa Beach with a 0% down payment on a VA loan and an interest rate of 4.75% might have around a $4,500 monthly payment, including property taxes and a $50 association fee. If you are married and an E8, your BAH in Hawaii would cover over 75% of your mortgage, making most of your money go into the value of the home instead of rent.
The Veterans Administration grants service members and veterans with certain service-connected disabilities funds to help purchase or build an adapted home or modify an existing home.
SAH grants can be used in the following ways:
The maximum dollar amount for fiscal year 2022 is $101,754 for a SAH grant, so view the details and application process if you have a service-related disability that might benefit from having a specially adapted home.
Buying a home in Hawaii is not only often a wise move financially, but it also offers an escape from the look-alike houses on base. Enjoy the unique Hawaii architecture, the welcoming neighborhoods, and the plentiful activities in paradise while living in a Hawaii home.
