A Hawaii VA loan is a home loan that Veterans, active duty service members, and some surviving spouses are eligible to apply for. These loans often have better rates and terms than conventional home loans and can be easier to qualify for.
As a veteran, active duty service member or surviving spouse, you can apply for a Hawaii VA home loan at any time during or after your service. This type of loan can be used for a new home purchase as well as for refinancing and can be used more than once.
What Type Of VA Loan Programs Are There?
There are many VA niche programs, but the most common VA programs are:
- VA Home Purchase Loan (100% Financing available)
- VA Interest Rate Reduction Loan
- VA Cash Out Refinance
- VA to VA Streamline Refinance
One of the biggest benefits of a VA backed home loan is the potential for lower interest rates. Since the VA guarantees a portion of the loan, the bank or lender is more inclined to offer you a lower rate on your mortgage.
Another typical benefit is that you will not be required to make the traditional 20% down payment on the purchase of your new home. In comparison, conventional home loans require a 20% down payment or the purchase of Private Mortgage Insurance. With a VA backed loan in Hawaii, you will not be required to purchase PMI or Private Mortgage Insurance when buying or refinancing your home.
However, if you decide not to put a down payment on your new home, you will be taking out a larger loan and may pay more for your home over time due to interest. It is worth noting that any down payment will help lower the size of your Hawaii VA loan and your total amount paid over time.
What Fees Are Associated With Hawaii VA Loans?
If eligible for a VA loan in Hawaii, in addition to your typical closing costs and fees there are two specific fees to VA loans that you should consider. First, is the appraisal fee and second is the funding fee.
If approved for a VA home loan, your lender will arrange for a VA approved appraiser to look at the property and make sure the home meets the minimum property requirements set by the VA. This appraisal will help save you and the bank money and time.
The funding fee is a one-time fee that is used to lower the loans cost to taxpayers. This fee is between 0% and 3.3% and is determined by a number of factors. This funding fee will take into account any down payment you make, your time in the military, etc.
Hawaii VA loans do have certain requirements you must meet in order to qualify. Firstly, your debt to income ratio is a major requirement to qualifying for a va loan. If your debt far exceeds your income, you will likely not be approved for a va loan in Hawaii.
Another consideration is your credit score. You may still qualify for a VA loan if you have bad credit. However, you may still be denied by certain lenders or have to pay a higher interest rate on your mortgage with a lower credit score.
Hawaii VA Loan Limits
The VA does not cap the amount of money you can borrow for your loan. However, they do have a limit on the amount of money they will be liable for. The va loan limits on liability can impact the amount you are approved for by the lender since less of the loan is insured. This higher risk for the lender may also require a higher down payment for you to be approved for your mortgage.
VA Loan Rates & Calculator
If you are a veteran, active duty service member, or surviving spouse interested in applying for a VA home loan in Hawaii, we would love to help you obtain your COE (certificate of eligibility). To get calculated loan rates and to determine your eligibility for a VA home loan, give us a call today at (808) 650-5956!