Honolulu Real Estate: The Coconut Wireless

When exploring the benefits of homeownership, it's more than just having a place to call your own. Among its many advantages, homeownership stands as a formidable safeguard against inflation and a strong vehicle for long-term wealth accumulation. This article will delve into the dynamics of appreciation and amortization, explaining why owning a home can be one of the most impactful financial decisions you can make. Inflation, the overall upward price movement of goods and services in an economy, erodes the purchasing power of money. In simpler terms, as inflation rises, each dollar you have buys a smaller percentage of a good or service.   The same inflation that is driving rising mortgage rates is putting upward pressure on home prices. Over the past sixty years, homes have appreciated in value at an annual appreciation rate of 5.56% according to the Federal Reserve Economic Data.   As a homeowner, you want to benefit from the appreciation.   Inflation for the same per

American homeowners have a record amount of equity in their home.   Many of these homeowners would like to cash out part of that equity but don't want to trade an historically low interest rate for one that is as high as it's been in 20 years. Instead of refinancing their home, an option is to get a fixed-rate second-lien.   This is different than a HELOC, home equity line of credit, which gives you continual access to your equity at a variable rate.   A HELOC has a draw period where you only must pay the interest. A second mortgage is a loan against the equity where the homeowner will receive a lump sum and will make payments to repay the loan and interest over a specified period.   Generally speaking, lenders want the combination of the existing first-lien and the new second-lien not to exceed 75-80% of the home's current value. To calculate how much would be available in a second-lien, subtract the existing unpaid balance on the first-lien from 75-80% of t

Buying or selling a house is an exciting and sometimes confusing experience that includes expenses called "closing costs" that can often catch us by surprise. Closing costs are simply the fees and expenses incurred by buyers and sellers during a real estate transaction's closing or settlement process.   Typical closing costs can vary depending on what is customary in an area, the mortgage type, property value, and other factors.   The largest expenses can be the real estate commission and the title policy.   Total closing costs for a buyer can characteristically range from 2% - 5%   of the sales price and 4% - 7% for a seller. The most common buyer's closing costs include loan origination fee, title insurance, attorney fees, appraisal, homeowner's insurance, underwriting, miscellaneous fees associated with a new mortgage, and prepaid interest to the end of the month. Interest is paid in arrears on mortgages after the borrower has used the money.  

Your home is not just a place to live; it's a valuable asset that can serve as a financial resource when you need it most. One of the significant advantages of homeownership is the opportunity to build equity over time, which can be accessed in various ways to fund life's important milestones or unexpected expenses. Whether you're looking to undertake a home improvement project, consolidate debt, cover education expenses, or simply ensure financial flexibility for the future, your home equity can be a powerful tool to achieve your goals. By understanding the options available and the implications of each, you can leverage your home's value to enhance your financial well-being and seize opportunities that come your way. Home Equity Loans are a fixed amount loan using the equity in the home as collateral. The borrower receives a lump sum and pays it back in regular monthly installments over a fixed term, typically at a fixed interest rate. A Home Equity Line