Shopping lenders is not something that I have done over the course of my 38 years in real estate, but this time something really opened my eyes. By making two complete loan applications, paying for two appraisals, with two different lenders at the same time, we helped our daughter and her husband save over $40,000 over the term of the loan on the purchase of their first home.
Shopping lenders is not something that I have done over the course of my 38 years in real estate, but this time something really opened my eyes. By making two complete loan applications, paying for two appraisals, with two different lenders at the same time, we helped our daughter and her husband save over $40,000 over the term of the loan on the purchase of their first home. It had been my custom to be loyal to my local lenders who give good service and fair rates to my clients, I frankly, I never suggested actually making con-current applications with two different lenders at the same time. But in this case, the home purchase was in another state, not Hawaii, and I had no lender loyalties, so shopping loans made sense.
Is this legal?
I did some research and actually found out that since the Dodd-Frank Anti-Predatory Lending Act totally changed the lending game, that shopping loans is absolutely legal and makes business sense. We all shop credit card rates, car loan rates, and practically everything else. Why assume all lenders are the same? I can assure you that after this experience, they are not the same. Is it ethical? If you let the lenders know you are shopping, then they are put on notice. This happens to real estate agents all the time.
What are the implications on your credit report?
What has now changed is that if you are shopping at the same time, running two different loan applications no longer dings your credit report. The lenders used to have the advantage that if you applied with one, they would correctly tell you that if you applied with another lender, your credit score would drop. This is no longer true. There is a window of between 15 to 45 days for concurrent loan applications. See MyFico for details.
In our case, we were helping our daughter and son in law purchase their first home. The purchase was $375,000 with a 20% down conventional loan. Our Realtor recommended a couple of local lenders that he uses and we contacted one, a mortgage banker. We made an online application and the lender came back with a rate quote of 4.55%. Being in the business on Maui, I felt this was quite high relative to even the Maui market as sometimes things cost more here.
My daughter Chloe and her husband Zack just purchased their first home
On a whim, I contacted an internet lender to shop loans and came back with an initial rate quote of 3.99% which was a lot more acceptable. Frankly, the loan costs were less than half of the local lender as well. I was astounded at the rate difference and sent the loan disclosure back to lender #1 and asked if they would be willing to adjust their rate to be more competitive. The answer was, "I don't set the rates, the company does," with no offer of help or assistance. Lender #2, the internet lender, was totally on the ball and gave us some credit counseling to pay off one $1900 credit card that raised the credit score by 30 points and dropped the rate to 3.85%.
The monthly payment difference was $118.27 and over the term of the loan was a savings of $42,577.20!
So if you are a home buyer or even looking to refinance, you may want to consider your options. Investing $600 to save over $40,000 is a great savings. It will take 5 months of savings to pay for the extra appraisal fee and you may have two or more options when it comes time to actually sign your loan documents.
Needless to say, my baby girl and her husband are delighted with the savings and their new farm for their dogs and horses, and hopefully soon some children for Grandpa and Grandma in Hawaii to come visit.
If you are a buyer and need some help and suggestions on how to do this, please call me. It only took me 38 years in the real estate business in Hawaii to learn this new tool, and I would love to share what I learned in this process.
Tracy S. Stice Realtor - Broker firstname.lastname@example.org 808-281-5411
As a member of our Realtors Association of Maui, Government Affairs Committee, this topic hits home. Many Maui residents rely on seller financing to obtain their dream buying property here in Hawaii. Numerous properties do not qualify for conventional or even portfolio loans. Some reasons include: they may have un-permitted features, poor conditioned structures, or be […]
I think Canadian citizens will be very pleased to discover that for well qualified borrowers, financing a purchase at the Honua Kai Resort and Spa in Ka’anapali, Maui can be done with as little as 30% down payment. This should be music to the ears of many as most banks require Canadian investors to put down between 35%-40% for their purchases.
Enjoy spacious kitchens available in all Honua Kai units – experience different shades of granite work, solid hardwood cabinetry, and most are equipped with Bosch stainless appliance with the exception of select two bedroom and three bedroom suites which are equipped with Viking appliances.
US Loan Programs Similar to Canadian Financing
- 5/1 ARMS
- 7/1 ARMS
- 10/1 ARMS
These loans are named by the length of time the interest rate remains fixed and how often the interest rate is subject to adjustment thereafter. For example, in a 5/1 ARM, the “5” stands for a 5-year introductory period in which the interest rate remains fixed. The “1” shows the interest rate is subject to adjustment once per year after the introductory period expires.
All rates are subject to change and because I don’t have a mortgage license I can’t quote rates, but I can tell you that they are extremely attractive and are among the lowest rates you will have ever seen US Banks offer Canadian investors.
There has been over $1 Billion invested from Canada in Hawaii Real Estate in the last 8 years. The dollars invested from Canada alone far outweighs the combined figures from all of the other countries in the world combined.
High Percentage of Canadian Investment at Honua Kai
When I last ran my numbers, I determined that about 18% of the owners at Honua Kai are Canadian citizens-predominantly from B.C. and Alberta, but there are provinces like Ontario also represented.
Other foreign countries also represented at Honua Kai albeit at a much lower incidence are: Ireland, Australia, Hong Kong, Singapore, and the United Kingdom. I will be working on a more detailed blog about what states, countries, and owner demographics are at Honua Kai so please stay tuned.
The view from the covered lanai at Hokulani #629, a three bedroom developer unit that the McElligots from Vancouver, BC purchased.
Testimonials from Canadian Honua Kai Buyer Clients
Please read what Paul and Colleen McElligott of Vancouver, BC had to share about their working experience with my team. Canadian Couple From Vancouver B.C. Purchase a 3 Bedroom Honua Kai Unit for $1,900,000.
Here is what Peter and Tracy Konidis of Ontario have shared about their working experience thus far as they will be closing on a two bedroom unit in the near future:
I want to thank you for everything that you have done thus far for my wife and I. I am so glad that I viewed your website and eventually contacted you. I have built my entire career on providing timely responses to my clients questions and concerns. You have definitely mastered this art.
I must admit that it’s a bit scary considering the purchase of real estate without being there to view things. You have gone out of your way in answering all of our questions. You have a good contact list of bankers and property managers that you were able to connect me with.
The information that I was able to obtain was exactly what I was looking for. I can’t tell you enough how important the videos were that you sent us. No request or question went unanswered. When my wife was concerned about the direction the condo was facing and what type of sunlight we could expect, you quickly went to the property and sent us a video of the location of the sunrise and sunset. In fact, you took the video from the unit across from the one we were considering to give us a better prospective.
The extra mile that you took in servicing us has meant a lot to us. That extra mile has allowed us to feel 100% confident in our decision to purchase a unit at Honua Kai. Thanks again for everything!!
-Peter and Tracy Konidis-
Do the Investment Numbers at Honua Kai Pencil Out?
The rental revenues at the Honua Kai Resort and Spa in Ka’anapali present some of the strongest cash on cash returns of any condo-tel property in all of Maui – and perhaps in the entire state of Hawaii. Read all about it here in a previous post: Honua Kai Rental Income Figures.
Who to Contact for Preferred Financing at Honua Kai
As Peter Konidis did, please do send me a direct email or give me call at your convenience to get the inside scoop for all things Honua Kai including my preferred lending contacts.
What is actively for sale at Honua Kai
Here is my gallery of all resale units at Honua Kai as well as some of the remaining developer inventory Honua Kai Real Estate Gallery . Please do also contact me directly for units that are not actively on the market as well as the complete list of remaining developer inventory and what I deem to be the best values.
Aloha from Maui,Jeremy Stice REALTOR (Broker) 808.281.2178 Stice@HawaiiLife.com
My Blog Series on Honua Kai Condos
- Honua Kai Resort in Kaanapali, Maui – Start here, as this blog will provide you with a good overview of the resort including video on its location, and its world class amenities and ownership offerings.
- Honua Kai Resort Real Estate For Sale – Kaanapali, Maui Condos For Sale – This post focuses on the inventory actively for sale and where all the units are located.
- Honua Kai Rental Income Figures – With some of the strongest returns of any ownership opportunity in Hawaii, Honua Kai deserves your strong consideration for short term cash returns on investment.
- New Ocean View One Bedroom Resale Unit Just Listed – check out this post on my one bedroom best buy in all of Honua Kai.
- Honua Kai May 2013 Market Update Report – Read about the new developer price reductions and all the recent market activity down at the resort.
- 50 New Price Reductions on Two and Three Bedroom Units at Honua Kai – New developer price reductions announced on April 18, 2103.
- Honua Kai March 2013 Market Update Report – There has been a significant increase in the level of sales for two bedroom units at the resort. Read all about it here.
- One Bedroom/One Bath Mountain View Unit at Honua Kai Sold for $525,000 – Congratulations to the Kojima Ohana on their recent resale purchase at Honua Kai.
- 5 Remaining One Bedroom Plus Den Units for Sale at Honua Kai – They are sold out of developer one bedroom units but check out this video blog for this niche units starting in the high $700k range.
- Honua Kai 2 Bedroom/2 Bath Condo Sold a Seller’s Perspective – What our seller client had to say about our team selling their property for a $135,000 short term gain.
- 2 Bedroom Ocean View Best Buys at the Honua Kai Resort and Spa – Feb ’13 post on the best ocean view and partial ocean view two bedroom units.
- 4 New One Bedroom Listings at Honua Kai – Posted on January 2013 be sure to check out these best buys priced under $550K
- Honua Kai January 2013 Market Update – What’s happening in the new year at Honua Kai? Are prices increasing?
- Honua Kai HOA Fees Increasing By 10% Effective Feb. 1, 2013 – What are the current fees, what do they cover, and what other costs of ownership are involved?
- 25% Down Payment Financing Options at Honua Kai – Get the inside track on leveraging your cash investments at Honua Kai.
- Canadian Couple From Vancouver B.C. Purchases a 3 Bedroom Honua Kai Unit for $1,900,000 – Did you know that many of the owners at Honua Kai are from Canada?
- Honua Kai November 2012 Market Update – The latest news after a crazy year of selling
- Honua Kai January 2012 Update – Why Honua Kai is the hottest deal in town right now
- Honua Kai Purchase Process – An owner’s perspective of purchasing and experiencing the resort.
- 35% Price Reductions on Condos For Sale at Honua Kai Resort – Read about how the developer dramatically slashed the prices at Honua Kai and where some of the best deals are at.
- Price Reductions on Honua Kai Resort One Bedroom Units – Video blog on 1-bedroom units that are Screaming Deals.
- Honua Kai Resort in Kaanapali – Best Two Bedroom Deals – Video blog on 2-bedroom units that are Screaming Deals.