Buying your first home can be overwhelming. But if you break it down into simple steps, you can feel much more confident as you navigate the process. Below are the 10 steps you’ll take in your homebuying journey:

1. Save Up for Your Down Payment and Closing Costs

Start saving up for your down payment and closing costs. Most traditional home loans require 20% of the home’s purchase price up front, although there are special homebuying programs that require smaller down payments. Just bear in mind that the more money you put toward your down payment, the lower your monthly mortgage payments will be. You should also save extra money for closing costs, which generally are an additional 2 to 5% of your home’s purchase price in addition to your down payment.

2. Clean Up Your Credit

Check your credit report and credit score before you start the homebuying process. By law, you can get a free copy of your credit report every 12 months at annualcreditreport.com. Be sure to review your credit report for any errors and dispute them early on in your home buying process. It can take time for credit bureaus to change incorrect information, so cleaning up your credit may take a while.

3. Determine How Much Home You Can Afford

Before you start house-hunting, determine your budget to get an idea of what you can afford. This will give you and your real estate agent a good idea of your price range. Remember, you may get approved for more than you can realistically afford, since most calculators don’t ask about or factor in your living expenses. Our FHB Mortgage Loan Officers are here to assist and work with you on a budget and mortgage payment that you can realistically afford.

4. Learn More about Available Mortgage Options

Before you begin house-hunting, you should learn about available mortgage options. First Hawaiian Bank offers a variety of mortgage options, from fixed-rate mortgages and adjustable-rate mortgages to Jumbo Loans, First Time Homebuyer Loans, VA Loans, and more. Loan payment terms also vary and typically range from 15 to 30 years for most loan types. Talk to your personal banker or a First Hawaiian Bank Mortgage Loan Officer to learn more about your options.

5. Shop for a Home Within Your Budget

Now comes the fun part: shopping for your dream home. Before you begin, determine which features and amenities are nonnegotiable for you. It’s also important to consider the neighborhood and quality of the home’s school district. Ask your friends, family, or personal banker to refer you to a good real estate agent who can help you navigate the process.

6. Make an Offer on the House You Want

When you find the home that you’d like to buy, it’s time to make an offer and negotiate. Your real estate agent should be able to guide you through this process and handle everything on your behalf. Make sure you know the selling prices of other comparable homes as well so you can negotiate accordingly.

7. Put a Deposit Down

Once you and the seller have both agreed to the home’s purchase price, you’ll need to put down a deposit to show you are serious and to secure the home. This money will go into an escrow account.

8. Submit Your Mortgage Application

To finance your home, you’ll need to submit your mortgage application. First Hawaiian Bank’s streamlined Digital Home Loans online application makes the process quick and easy. Experienced Mortgage Loan Officers are always standing by if you have questions or need help through this process.

9. Close the Sale

You’ll need to have the home inspected before you can close on the purchase. Home inspections are a great way to figure out if the house has any major defects before you are locked into the sale. This can also help you during the negotiation process, as many buyers ask sellers to fix things or lower the sale price based on the inspection results. Once all terms are met, you will need to deposit the funds and the seller will need to deposit the deed. (This process may vary based on where you live.) You may also want to hire an attorney who can walk you through all the paperwork that needs to be signed.

10. Move into Your New Home

Once you’ve completed the process, you’ll be handed the keys to your new home. Start packing and calling up your friends to help you move, or get ready to hire a moving company. Don’t forget to set the date for your housewarming party!

Buying a home is a major milestone that can quickly become overwhelming. Having a knowledgeable, supportive team assisting you through the process can make your homebuying journey a little easier. If you’re ready to take the first step toward your new home, visit fhb.com/digitalhome today to find out what First Hawaiian Bank has to offer.

Whether you’re a first-time homebuyer, looking to upgrade to a larger home, or refinancing an existing home loan, obtaining a mortgage can be stressful and complicated. To make your home buying process as seamless as possible, it’s important to do your research and have a list of questions ready.

Here are seven of the most common and important questions to ask your mortgage lender.

1. What is the right type of mortgage for me?

There are many factors that go into deciding what type of mortgage is best for you. You should consider whether you’d like a fixed or adjustable rate mortgage, how much you want to borrow and the length or term of the loan. Additionally, you might consider whether a conventional or government-backed mortgage is right for you. Not familiar with these concepts? Here’s a breakdown of the different types of loans you might consider when buying your next home.

• Fixed-Rate Mortgage: The interest rate for a borrower’s loan is set at the beginning of the loan term and cannot be changed. Get more details about a fixed-rate mortgage from First Hawaiian Bank.
• Adjustable-Rate Mortgage (ARM): The interest rate is periodically adjusted based on an index and margin. Check out the latest ARM rates and learn more about ARMs from First Hawaiian Bank.
• Government-Backed Loans: Loans insured by a government agency. Examples of these loans could be Federal Housing Administration (FHA) loans or Veteran Administration (VA) loans. These loans typically have more lenient credit score requirements but may have restrictions and additional fees. 
• Conventional Loan: Loans underwritten to Fannie Mae/Freddie Mac loan guidelines.  They are issued by private lenders like First Hawaiian Bank and typically have better interest rates and flexible loan options with down payments as low as 3%. Conventional loans have maximum loan amounts known as the conforming loan limit.  This is set the Federal Housing Finance Agency (FHFA) and loan limits can vary by county. 
• Conforming Loan: These are loans equal to or less than the amount set by the Federal Housing Finance Agency. For borrowers with good credit, conforming loans can have low interest rates.
• Jumbo Loan: Exceeds the loan limit established by Freddie Mac and Fannie Mae. Due to the high loan limit, borrowers are expected to have stellar credit scores and put down a larger down payment. Learn more about the Jumbo Loans from First Hawaiian Bank. We also have a special Jumbo Loan specifically for eligible medical professionals too. 
• VA Loan: Qualified military professionals can enjoy special rates and benefits through a VA loan. Learn about VA Loans at First Hawaiian Bank.
• Land Loan: Loans to finance your land purchase or refinance residential land. Ask whether it can be converted to a construction loan once you’re ready to build. 

2. How do I qualify for a mortgage loan?
Before a borrower is approved for a mortgage, the lender will assess the borrower’s credit history, debt-to-income ratio, income, ability to place a down payment, and other eligibility criteria. The threshold for each of these categories will vary, depending on the type of loan and the lender.

3. How much can I afford to borrow?
The amount you can afford to borrow depends on your income, debt, and assets. Mortgage lenders will look at these factors to determine the size of the loan you can qualify for. Conducting a review of your finances to assess whether you’re ready to buy a house is a good first step. A general rule of thumb is to follow the 28%/36% rule, which means do not spend more than 28% of your gross annual income on housing costs and no more than 36% on debt (including housing, credit card, student loans, etc.). This is typically a good rule to follow when dealing with conventional loans. 

4. How much money do I need for a down payment?
Depending on the type of loan, down payments can range anywhere from zero to over 20% of the value of your home. Some government-backed loans, like VA or USDA loans, do not require a down payment when purchasing a home. On the other hand, if you qualify for a conventional loan, then the minimum down payment can be as low as 3% depending on your qualifications. However, making a higher down payment can be beneficial in the long run by decreasing your monthly mortgage payments and avoiding additional fees and insurance.

5. How many discount points are included in the interest rate?
Discount points, also known as mortgage points, are interest fees paid to the lender at closing in exchange for a lower interest rate.  Make sure you ask your lender how many points are included in your quoted interest rate, if applicable.

6. How can I find out what my closing costs are?
Closing costs consist of various fees, insurance, taxes, and upfront interest, or points. Prior to closing your loan, you will receive a Closing Disclosure which will list out all your costs. 

7. How long will it take to close?
Closing times vary. Asking your mortgage lender for an estimated timeframe can help you plan accordingly. Be sure to keep in close contact with your lender because delays can happen.

Buying a home is a huge milestone. If you do your research and are not afraid to ask questions, you’ll be on your way to closing in no time. 

At First Hawaiian Bank, our team of experienced mortgage loan officers are ready to help. Contact us today to get started.

Rising home values are giving homeowners the opportunity to tap into their home equity as a source of cash. Home Equity Lines of Credit, or HELOCs, are lines of credit that are secured using your home as collateral. HELOCs generally offer lower interest rates than credit cards or unsecured personal loans, which will mean lower monthly payments for you when you choose to draw on your line. Moreover, the interest you pay may be tax-deductible (Note: Please consult your tax advisor).

One of the chief advantages of a credit line is that you make payments only after you’ve drawn on the funds. If you are approved for a $100,000 home equity line, but only use $25,000, you only pay interest on the $25,000 you’ve drawn. This kind of financial flexibility is perfect for multiple needs, such as paying tuition or financing projects where the final cost might not be known when the project is begun. If your costs rise unexpectedly, you can take comfort in knowing that funds will be available to you when needed.

HELOCs can be used to finance a wide variety of expenses, such as the following:

Education Expenses

Maybe you dream of going back to school to earn that degree you’ve always wanted. Or perhaps you’re facing ever-increasing tuition expenses for your own children. Either way, using your home’s equity to cover educational expenses is an excellent way to cover expensive college or private school tuition.

Home Improvement

Many homeowners also draw on the equity in their home to pay for remodeling or other home improvement projects. With the continued low inventory of homes currently on the market, it may make more sense to renovate your home rather than move to a new one. Maybe you need more room for a growing family, or need to repair damages to your roof from stormy weather. Regardless of your reasons for initiating a home improvement project, a HELOC is a cost-efficient way to fund it.

Bill Consolidation

HELOCs are also commonly used for bill consolidation. If you qualify for a HELOC, it will generally be the most affordable way to consolidate your outstanding higher-interest balances, such as credit card balances and unsecured personal loans. In particular, if you’re trying to reduce your monthly expenses, paying off higher-interest credit cards is one of the best places to begin.

“HELOC interest rates are typically lower than interest rates for credit cards and unsecured personal loans, since the borrower’s home is used as collateral,” says Lance Oribio, Vice President and Consumer Credit Products Manager at First Hawaiian Bank. “Tapping into a HELOC could translate into lower, more manageable monthly payments. Also, First Hawaiian Bank’s HELOCs offer special fixed-rate lock options with different amortization periods to fit your financial planning needs.”

To figure out how much equity you have, estimate the market value of your home and subtract the total of outstanding mortgages plus any other liens on the property (other HELOCs, home equity loans, etc.). Keep in mind that most lenders have limits on the loan-to-value (LTV) ratio. According to Oribio, “For most owner-occupants, there is a maximum LTV of 80 percent, which means you can borrow up to 80 percent of your home’s assessed value.”

First Hawaiian Bank offers competitive, flexible HELOCs that can help you meet your goals. To learn more, speak to a personal banker at any First Hawaiian Bank branch.