In our last blog, we went over how to gauge how much Maui home you can afford, and ways to offset your expenses, like renting out a cottage on the property. Here is some more advice.
First of all, don’t be scared off by prices on homes that are being advertised. Those prices include the high costs of advertising! Less expensive homes likewise aren’t advertised because it isn’t cost effective to do so. What you should really do, especially if you have a specific set of criteria in mind, such as a home with three bedrooms and an ohana in Wailea, is try the online Maui real estate search tool on this website. You can get extremely specific, as you’ll see. This way you’ll easily be able to figure out how much home you can afford with the budget you outlined based on our advice in the previous blog.
So once you’ve picked out a home that suits your budget and your needs, the next important question is do you want a fifteen-year or a thirty-year mortgage? Lenders prefer the thirty-year obviously, as more interest is generated for them to profit from. Likewise it will cost you much more in the long term, but in the short term, payments will be more manageable. Another factor in this decision is that lenders are more likely to approve a bigger loan for a more expensive property than they are willing to do for a 15-year mortgage.
Monthly payments should be somewhere around .75-1.15% of the purchase price of your new home, with some more potential in variation depending on your unique situation.
Lastly, you should also take closing costs into account. These include survey fees, mortgage application fees, appraisal fees, brokerage commission, etc. These are just a few things you may need to pay for, and you can either take the amount out of your savings (which would reduce the amount you can put into your down payment) or you can apply for a larger mortgage that will cover the closing costs. This is known as “rolling the closing costs”.
And that about covers the general points you should keep in mind when buying a new Maui home. (This week, we suggest checking out Wailea Pualani real estate.) Hopefully you will feel more comfortable about the process after familiarizing yourself with these nuggets of information. Naturally there are many more complex questions and issues that can arise in the home-buying process, which can be especially daunting for a first-time home buyer. In any case, you’ll find our contact information at the bottom of the page if you should require any assistance.
If you need any help with our website or your pursuit of great Maui real estate, contact us at the information at the bottom of the page. Thanks for reading and have a wonderful weekend!