A home loan in Puna can make it possible for you to own property that you may otherwise not be able to afford. This can be far superior to renting a home. Even though it has been fairly common until recently that many of the properties in Puna were paid in cash, higher real estate prices have brought about a shift towards mortgages and other financing strategies.
TIP: Many of the cabins in Puna that are on the market are un-permitted, which means you will not be able to get a home loan. You should be able to get a land loan, however. Properties with un-permitted structures are considered vacant land. Those properties are usually only sold in cash or on terms (owner financing). Some people use these unpermitted cabins as a temporary dwelling, while starting to build a permitted house on a different building site on the same property. In some subdivisions this does not always meet with the approval by neighbors who may be situated nearby. They could report it to the county and the county could give you several hundred dollar fine.
Financial Education begets financial freedom…
In the beginning, all these different loan strategies were a bit confusing to me. One late night after watching an infomercial about a financial education course (Carleton Sheets’ No Money Down course), I decided to purchase it. I was skeptical at first, but (believe or not) it was really worth it.
I learned a lot about different financing strategies, creative financing (combination of different financing strategies), bad credit repair, bad credit and loans, building credit, etc. It is mainly targeted towards people who want to be real estate investors, but the knowledge that I gained from it can be used for normal home purchases, too.
For me it was the gateway to understanding the basic principles of real estate. There are a lot of tools and courses out there to help you improve your understanding of the financial options that are available and I encourage you to seek them out. The subject sounds like a big bore to most of us (lets face it - I would rather be practicing my guitar riffs!) but the benefits can profoundly affect your future. Knowledge is freedom, my friend…
So, where do you go, if you need a home loan in Puna or a land loan?
One way is to shop around and compare what the different lending companies offer. Traditionally, you would go to a loan officer of a lending company like a mortgage company (retail mortgage company), credit union or Bank Institute. Bank of Hawaii, First Hawaiian Bank, American Savings Bank and Well Fargo are just a few of the Banks that offer different home loan in Puna and land loan programs.
However, if your profile is not really that good (bad credit, debts, low income etc.), it might be smarter to find a mortgage broker, because he will be able to find the best deal from all the different mortgage and loan companies (wholesale mortgage companies). He does not have to be loyal to just one lending institution like a loan officer does.
Just like it is smart to have a buyer’s agent check for the best-fitting properties for you, it is the responsibility of a good mortgage broker to find the best home loan in Puna for you.
How the lava zones can affect your home loan in Puna:
There is an additional factor that can affect your loan in Puna that you don’t find in many other paces and that is the lava zones. Besides all the usual criteria such as how much you can afford to pay monthly and how much the lender wants to loan you (based on your credit score, employment history, income, assets, debts and residence history) it is also important in which lava hazard zone your desired property is located.
There is usually no problem getting a home loan in Puna for a property in lava zone 3 but it can be a little tricky in lava zones 1 and 2 since this is an added risk to the lender. If all your credentials as a borrower are in good condition, then this should not be a problem, but if you have either bad credit or not a lot of income, lending companies will be much less inclined to provide you with a home loan in Puna, even if you are able to get insurance for your property.
If you really want to find out about how you can save a lot of money on shopping for mortgages, you need to read this ebook called Mortgage Insider. It helped me a lot to understand how the market really works.
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Always keep the goal in mind - to get a home loan in Puna that works for you with a low interest rate and a monthly payment you can truly afford.