Banking in Hawaii??

Question

If I am investing in vacation property in Hawaii will I need to get a mortgage with a bank there?

Kauai is where we have  started to look on the north shore , and the topic has not even been thought about yet.

I suppose our realtor will advise us but wanted to know sooner.

Phillip Cuilla · Answer

Thank you all for your timely and very informative responses.

I appreciate your well wishes.

Our first property will most likely be a condo.

David L. · Answer

@Phillip Cuilla, if you do decide on banking locally, the rates are hovering at around 3.5% w/ 2pts for 30yr and 2.5% w/ 2pts at 15yrs.  Closing is taking longer these days.. about 45-60 days.

Upen Patel · Answer

@George KrischkeI agree with you. The big box national lender with run and run fast from non-warrantable condo/condotel properties.

@Phillip CuillaYou want to find a national lender that does non-warrantable condo loans. Make sure you check that out up front. As George states, most lenders will say everything is good until its too late.

George Krischke · Answer

Aloha Phillip, it depends on the type of Hawaii property. If it is a regular single family home, any national lender that is licensed to do business in Hawaii will do. If it is a 'condotel' in a resort zoned neighborhood, that allows short term vacation rentals - less than 30-days - (a popular perk that could yield increased cash flow) than you run the risk of finding out 3 weeks into escrow that your favorite national lender overpromised. In short, if the property does not fit strict Fannie Mae / Freddie Mac guidelines, you will need to consider one of the few local portfolio lenders, e.g. First Hawaiian Bank, Bank of Hawaii, Territorial Savings, American Savings Bank, etc..  Your local Kauai realtor will be able to advise you best. Good luck. ~ Aloha

Upen Patel · Answer

@Phillip CuillaYou don't need to use a bank in HI. You just need a national lender that lends at a minimum in HI and your state.

Jeremy Baker · Answer

Aloha Phillip,

I'm not sure if you "need" to get a mortgage locally there, but it is much easier to do so.   Your agent should have some good local contacts to help you get financing.

We used Wells Fargo (local branch) for our first Maui vacation rental and currently going with First Hawaiian Bank for our second one which we are currently going through escrow and closing on.

Good Luck!