USDA guaranteed mortgages provide buyers 100% financing of the purchase price. Buyer will pay for an appraisal, credit report and closing costs by title company (1-2%). Hawaii County household 1-4 income can't exceed $95,900; 5-8 can't exceed $126,600.


Home Ready 3% down and FHA 3.5% down are two great ways for first time buyers to get into your own home, if USDA doesn't fit your profile. FHA loans cannot exceed 43% DTI and require 2 years consistent employment history. Conventional home loans cannot exceed 49% DTI and require 12 months consistent employment.

5-20% DOWN

To get the lowest mortgage insurance, put the most down you can. Mortgage insurance is calculated by what percentage down payment, buyers credit score, price of property and DTI. The good news is you don't need a 20% down payment for your home purchase, you will just have to pay mortgage insurance for a few years. Your mortgage broker will guide you your first time.

Here's a zero down example:

Family of 4 earning $90,000 can qualify for $425,000 home loan . Family of 5 earning $125,000 can qualify for $610,000 first time mortgage.

In either example, housing expense plus other debts can't exceed 43% DTI (debt to income)

Here's a 3% down example:

$600,000 home purchase price. 3% is $18,000 down payment then add 1-2% for closing costs.  FHA home loan limit in Hawaii County is $387,550, so 3.5% down equates to a $401,600 maximum purchase. Conventional mortgages have higher mortgage insurance than FHA so we will guide you to best understand your options.

What exactly is mortgage insurance?

Mortgage Insurance (MI) is an insurance policy you pay for to protect the lender in case you default on your loan. Similar to gap insurance on your car.  MI can range from $50 to over $600 monthly. Government home loans like USDA, VA and FHA have very low MI but it remains the full term of the loan. Conventional mortgages have higher MI but it is removed after you achieve 20% equity in your home.


What questions can I answer for you?

Better yet, see us in person!

We love our first time home loan customers, so feel free to visit during normal business hours.

Big Island Mortgages by Doug Mallardi

76-6190 Plumeria Road, Kailua Kona, Hawaii 96740, United States

Call or Text: (808) 333-4341 doug@bigislandmortgages.com Open Monday through Friday 10am - 12:30pm and 3:30pm - 6pm