Many of you are familiar with the writings of Alan Van Zee as we often site his articles for our Mortgage News section of the Newsletter.  This month we thought you would like to get to know a little bit more about Alan and Hawaii Mortgage Company.

Why and when did you begin Hawaii Mortgage Company?
My background is finance.  In 1994 a friend suggested taking that knowledge and applying it to the mortgage industry.  Within a short couple of years I was a top producer at the company I started working for.  In 1999 I established Hawaii Mortgage Company.  In 2000 I met Michelle Van Veenendaal, another successful Mortgage Broker in Honolulu.  Soon we merged our businesses.  Our company recorded record growth for many years and soon became one of the highest producing independent Mortgage Brokerage firms in the state.  I am also happy to report Michelle and I just celebrated our 11^th wedding anniversary.  The merger wasn’t only business!

What are the top tips you would give for first time home buyers?
Start the process early, and start by getting pre-approved for your financing before ever looking at a property.  You want to start early so that if there are any issues with errors on your credit report or things that can be done to raise your credit score, they can be done without a looming deadline hanging over you.  I regularly work with self-employed borrowers and their tax preparers just before the end of the year to insure that newly prepared return shows sufficient income to qualify for the loan they want.

Another important reason to get pre-approved early is not only to know how much home you can afford, but what that monthly payment will be.  In many cases people qualify for more than they wish to spend each month.  Knowing what price range to be looking in will save some heartache from falling in love with a property whose monthly payment you don’t want.

Same question but for second home owners/investors of vacation property?
The biggest myth is that there is a classification of ownership called a 2^nd home/vacation rental.  That property can only be either a true 2^nd home or an investment property used for vacation rentals.  That doesn’t mean that if you vacation rental your new condo you cannot stay there, of course you can.  2^nd homes in the eyes of lending are treated as an extension of one’s place of residence.  That is why there is a requirement that you spend at least 2 weeks a year living in that property.  2^nd home financing has the same rates as one’s owner-occupant property.

One aspect many looking to buy a vacation rental are not aware of is that proposed rental income can be used as a basis for qualification.  That figure is determined by the appraiser seeing what similar units would rent for on a long-term basis.  That means rental periods of 6 months or more.  While this figure would be lower than the income derived from vacation rentals, every little bit helps!

Is it hard to obtain lending if you are an International buyer?
I actually specialize in foreign national financing, so I can happily say it is not hard to get a loan if you are a citizen of another country.  The only challenge is that all the required income and asset documentation must be in English.  If your documents are in another language, we have a contracted certified translation service to convert those documents.  Some lenders may also require that you designate a US citizen to accept service of legal documents, should the situation ever arise.  Also, if you are planning on closing your transaction while out of the US, you will be required to sign before a US Notary.  They are located at an US Embassy around the world.  In many places there’s a 2-3 week wait to get an appointment, so if this is your situation, plan ahead.

Do you think rates will increase this year? If so by a little or a lot?
Whenever I am asked where I think rates will be in the future, I always reply that if I did know, I would not be still in the mortgage industry, but would be phoning in my bond orders while sitting on the beach with some cracked crab and a drink with an umbrella in it.  With all levity aside, while no one can accurately predict where interest rates will be tomorrow, next week or next month, there are clear signs of what to expect through 2017.  It is clear that the US and global economies are experiencing pathetic growth.  The world’s central banks cannot raise rates for fear of recession.  Prior to the BREXIT vote if one were to buy either the equivalent German or Japanese 10-Year Note, you would have earned negative interest.  That means that you are paying the government to hold your money.  At the end of the bond’s term, you would get back less than what you put in.  Post BREXIT, rates of return are even worse.

This is important because the US 10-Year Bond is now trading at about 1.500%.  Our currency is stable.  We are also still perceived as truly the only country in the world that would never default on its debt.  So US bonds will always be in demand for years to come.  That means that in order to sell these bonds, interest rates would have to be high to attract buyers.  Why all of this talk about bonds when the question had to do with mortgage rates?  One of the components that factors into mortgage rates is the yield on the US 10-Year Note.  If the yield on the 10-year is low, so will mortgage rates.

Why should someone from Maui or other islands use the services of an Oahu Mortgage Broker?
It may have been impractical 25 years ago to utilize the financial services of a company that was not in the same local as you.  But with today’s technology the need to “walk documents into the lender” are gone.  With the all the technological advances, providing financing for someone across the world is as easy as doing so for someone down the street.  Also being a state-wide company with almost two decades of service, we represent the competitive lenders in the country.  We represent over a dozen lenders and can provide just about every type of financing available and at lowest rates available.

I stared this business by asking real estate agents to give me a try by sending me their tough loans.  Condo-tels, self-employed, foreign nationals, construction, vacant land, these were the types of loans I started off with.  In this industry experience does make a difference.  While I enjoy learning something new every day, my real asset to my clients is having solved their particular financing issue many times before.  Knowing how to get it done can avoid delays, or in some cases save a deal from falling apart.

Outside of work what are your favorite things?
Being born and raised in Hawaii I still regularly body surf the break at Sandy Beach.  Except now in my early 50’s I get a “Howzit Uncle” instead of “Hey Cuz!”.  Also my amazing 8 year-old son is an up and coming baseball player.  I have been a little league coach for 4 years.  I also dedicate a portion of my life giving back to the community.  Be it either as a Scouting leader, heading a condo board, or recently as the President of my son’s School Board, I try and pay it forward in gratitude for the successes I have achieved in my life.

We appreciate your time and check out Alan’s latest information in this month’s Mortgage News section below.