Hawaii Mortgage and Refinance Rates
As of Tuesday, July 27, 2021, current rates in Hawaii are 2.88% for a 30-year fixed, 2.20% for a 15-year fixed, and 2.13% for a 5/1 adjustable-rate mortgage (ARM).
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Hawaii mortgage overview
Hawaii is made up of eight major islands and numerous smaller islands, with an estimated population of 1.4 million, according to Census estimates. Known for having a higher cost of living, the median home value as of 2018 was $587,700, which is significantly higher than the national average.
The state operates the Hawaii Housing Finance & Development Corporation (HHFDC) to help homebuyers connect with homeownership programs. The HHFDC has been operating under the current name since 2006, though the roots of the agency stretch back to 1935. Other county- and island-specific organizations exist to help low- to moderate-income residents purchase homes.
First-time homebuyer programs in Hawaii
In Hawaii, qualifying first-time homebuyers have access to a variety of programs to help them afford a home. These include:
Down Payment Assistance Loan Program (DPAL)
The Down Payment Assistance Loan (DPAL) program, offered by HHOC Mortgage, a nonprofit affiliate of the Hawaii Homeownership Center, helps first-time buyers with special financing through an 80 percent first mortgage and 15 percent second mortgage and a low 5 percent down payment requirement. There is no mortgage insurance or prepayment penalty, but borrowers must complete counseling and education courses (online or in-person), and not exceed income and purchase price limits, which vary by location.
Down Payment and Closing Cost Assistance Program (DPACC)
The Down Payment and Closing Cost Assistance (DPACC) program for first-time homebuyers, also offered by HHOC Mortgage, is a 15-year deferred loan of up to $10,000 that borrowers can use to pay for closing costs and the down payment. It is a second mortgage with no monthly payment and no interest, and is available only to qualifying applicants who use HHOC for their first mortgage and are using the home as their primary residence.
First-Time Homebuyer Mortgage
With a First-Time Homebuyer Mortgage through HawaiiUSA Federal Credit Union, first-time buyers who are members of the credit union can put as little as 3 percent down (with mortgage insurance), with the possibility of waived loan origination fees, as well. Qualification is subject to income limits (which can be flexible) and minimum cash reserves of two months’ worth of mortgage payments (including insurance and taxes). Borrowers also have the opportunity to gain additional discounts if they complete first-time homebuyer education courses.
Honolulu Down Payment Loan
Available to homebuyers on Oahu, the Honolulu program provides a zero-fee, zero-interest, 20-year loan of up to $40,000 to help with the down payment. The home must be the borrower’s primary residence for at least 10 years, and the buyer must contribute 5 percent of the purchase price to the down payment. Income and property value limits also apply, and there is a homebuyer education requirement.
Mortgage Credit Certificate (MCC)
The Hawaii Mortgage Credit Certificate (MCC) converts a portion of the mortgage interest paid by the borrower into a non-refundable federal tax credit. The MCC is available to low- to moderate-income homebuyers who work with an HHFDC-certified mortgage lender to receive the certificate. The maximum tax credit is 20 percent of the annual mortgage interest, and applies for the life of the loan. Minimum credit score, household income limits and purchase price limits apply, and there is also a $25 application fee and $400 processing charge.
Hawaii mortgage refinancing
If you’re looking to refinance in Hawaii, you can shop for a loan with a private lender, bank or mortgage broker. You don’t have to refinance with the same lender who holds your current mortgage. When you’re ready to refinance, it’s smart to identify your goals (such as a shorter term, eliminating PMI or a lower monthly mortgage payment), do your research and shop around to make sure you’re getting the best possible rate and terms.