Make the most of your move to Hawaii with these 8 tips
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.
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.