Mortgage News
Record numbers of millennials still live at home. Hawaii has one of the highest percentages in the country for homes with multi-generational living. If you guessed high home prices were the reason, you would be right. But if you dig deeper into the research, it turns out that most millennials don’t know or understand mortgage financing and the wealth benefits it can generate.
A significant percentage of millennials believe they would not qualify to buy a home because they lack the perceived 20% down payment requirement. They also don’t know how much a mortgage payment is – thinking that renting is still cheaper.
It is important for not only us in the mortgage and real estate industry to better educateconsumers, but important for parents to light a fire under our kids to motivate them to reach for their own piece of the American dream. Their first may not be the home of their dreams, but in Hawaii, if you can get onto the “Home Ownership Escalator” you will start to build wealth.
To dispel the myth of how much down payment you need, let’s start with some quick facts about down payments. There are more programs available today than ever before that require the smallest of down payments.
USDA is 100% financing, but does have restrictions on where you can buy.
Fannie & Freddie 97% financing is available in every community for both houses and condos.
FHA requires only 3.5% down – even for those with less than perfect credit.
Millennials also believe that with the high prices of homes in Hawaii, they will forever rent. But with nationally high rents, not only would you come out cheaper in the end, you will gain so much in equity!
Let’s do the math on a $300,000 condo purchase with just 3% down. We’ll compare renting versus buying over a 9 year period. The charts below take the following into consideration: Rent will increase 4% each year and home values will increase 4.77% per year (which is the historical average). Everything is considered, even the cost to sell after 9 years.

Compliments of
Alan Van Zee
President | NMLS #: 297154
Hawaii Mortgage Company, Inc.
Company NMLS #: 232582
Phone: 808.988.6622
alan@hawaiimortgage.net • www.hawaiimortgage.net
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