Betty Sakamoto: Aloha and welcome to Betty's Real Estate Corner brought to you by Sakamoto Properties where "prestige is our business, reputation our foundation". Today, in the studio we have Tricia Morris who is the "Maui Queen", and possibly more than just Maui, of mortgages. She's been amazing for us over the past years, she's helped many, many of our clients which has really been an exciting thing for us and has really helped us. So we're going to try and dedicate this show today to mortgages, what's happening, what you ought to be doing to start buying now, and how you really can. Everyone says, "oh, it's so hard to get a mortgage" ? but it really isn't. You may need to do some things to make it all happen but I can assure you that by the end of this show, twenty five minutes or thirty minutes, we're going to be able to tell you what you can do, how Tricia can help you. There's a variety of mortgage people around, and we're not saying that you don't already know somebody, but at the end of this show you need to call Tricia or you need to call your banker or your mortgage lender that you've worked with before. It's time. So, good morning Tricia.

Patricia Morris: Good morning Betty. I really appreciate the opportunity to express something that's really dear to my heart right now and that's "let's get local people into homes". It's important, the timing is so now. There's so many investors in the market and what people have said over the last year is that the "smart money" is buying, but that doesn't help local people. We really need to get you into homes and yeah there's a lot of fear out there and there's some broken trust but what the important thing is for you to look out for your own well-being. Your financial and emotional well-being over the next, let's say, decade and for those of you who think there's any possibility at all to buy, that time is really now.

B: Tricia is right. "Big money" is buying property all over the world, basically, but definitely all over the United States, and in particular in Hawaii because it's the place that everybody wants to go, prices have been down, interest rates are down. But we are seeing big money come in and hedge funds, etcetera, that are trying to buy properties and are buying a lot of property. So you need to step in now before it's really too late and we're back at another high and you're saying, "if only, I'd invested then". We want to get you moving and one of the first things we want you to do is call your lender, call Tricia Morris. I'm going to have her give you all of her phone numbers in a minute, but there are other people and you may have a great relationship with someone at Bank of Hawaii or First Hawaiian Bank, perfect, give them a call. But again, Tricia is a great source of information. You'll probably go in and talk to one of her wizards in the mortgage loan business and she'll tell you either you can buy or it's going to be hard, or maybe you need to do something to get your credit beefed up and she can give you so much information. But let's start with something little. I mean, like what would you say today to someone that's looking to get into the market, has never owned before, and they live here ? an owner-occupant.

P: Well I would say, first of all, that it's a little bit more of a process than it was and as my husband reminded me this morning, some of the joy has been taken out of the lending process and there's a lot of fear. People say, "Oh, you can't qualify" but that's not true. We get through all of our loans that we take in and the important thing is to do a little preparation. You know, make the phone call, set up the appointment. It doesn't have to be in person, it can be on the phone, but we can go over your financial information in detail and tell you exactly what you need to do to buy. And, some of the most effective programs that we put people on are, say, six month plans where they have to do certain things over the next six months to put themselves in the position to buy or maybe even a year. But, you know, six months or a year goes by really fast.

B: Right, and what you're talking about is things like maybe they need to clean up some credit, they need to maybe pay off a car or wait till it pays itself off and don't buy another car and don't go out and get any new consumer debt. You know, so do your best, maybe you have to consolidate something or maybe a family member in some cases we see has to help you to get some things paid off. I don't know today if you had a family member that was willing to give you a gift of some money if you're short on a down payment, is that still an acceptable venue?

P: Absolutely, and there are hundred percent financing kinds of things out there still. I mean, VA is an amazing product for people who have been in the service and FHA is 3.5% down, and even conventional is five percent down. So there's plenty of options. The trick is to find out how your situation fits into the options and what you have to do to fit if you don't quite fit. Most people are pretty close, you know, they don't have to do a lot but you know people are used to going out to dinner a lot and buying cars and as Betty said, you need to cut some of that back until you own your own home. But, the bigger picture is owning a home. There's so many benefits to it, you know we've been a little bit blind to over the last few years but it gives so much security and so much emotional and financial well being over time.

B: Pride of ownership.

P: Yeah.

B: I mean there's nothing in the world, I believe, like owning your own home. It's coming home, and when you're doing something, you know most of us have rented apartments for long periods of time in our lives and it's okay. We take care of them and maybe freshen up the paint when we have to or we'll fix something and we'll do things but when you come home at night and you're walking in to your own home and you've just gotten in there and you're looking around, you're going to love every minute of every fix up because it's all yours. Your children are going to grow up there or you're going to retire and live there. There's just so many things that go into it so I think "pride of ownership" is huge. The investment opportunity of owning your own home typically for most people is going to be the biggest and the best investment you'll ever make. And you will probably make more money at the end of whenever you decide to sell it than you will with any other investment. And if you don't, you lived there. You lived there for five years, ten years, twenty years, maybe for the rest of your life. But, I like to typically say to someone, "Don't make it such an epic adventure that you can't buy a home". You want to buy a home and it probably won't be your final resting place. You're going to buy this home, and you're going to buy another home, and maybe you'll live somewhere else but still, you have to do it, you have to step in now.

P: It's true, and you know, there's something to be said for not coming to the end of a lease and having to move. But as long as you make your home payments, nobody's ever going to have you moved. And there's such a security in that, that maybe goes beyond what people are conscious of but it's really nice to know that you've got the rest of your life in a place if you want.

B: That's right, especially on Maui. You know, a lot of times you're renting, let's say a condominium, but the people that own it maybe next December will decide oh we should put it into a short term rental program because we're going to make a lot more money. So all of a sudden, they're asking you to move in November so that they can be renting it and now at the worst, worst time you're out there looking for a place to live. You want to own a home.

P: Yeah, and a lot of people don't think about that until they get the letter. The other thing is, because it's such an investor driven recovery right now, which is kind of the sad side of the housing recovery, it's that home ownership is at a low and investor ownership is at a high. The reason that the investors are so excited about buying is because rents are going up. But that means that at the end of your lease, you're more than likely going to get a rent increase.

B: Yes, absolutely. Rents are not only going up, but it's almost impossible to find a place to rent right now. So, I think that it is going to become more and more vital for everyone who's renting right now to keep in mind that the person you're renting from may decide to sell the home that you're in. In which case, either they're going to live in it themselves or they may have extended family members, especially in Maui, where somebody buys but maybe aunty is living in the ohana or is living upstairs. You know, you see where you've got two or three generations in a home but keep in mind that you also can do that. You can have another generation live with you or if you buy a place that has an ohana, you'll have some rental income coming in. So again, I think what Tricia is saying is it's not like you need to get a huge amount of money, but you need to probably be doing this before everything goes up another hundred thousand or more because it is, just like you said, it's becoming an investor driven market. We need you guys that are listening today, to be thinking about, you can do it. You just need to talk to your real estate broker, you can call us at (808) 669-0070 and one of us will help you. Look at our website SakamotoProperties.com and Tricia, we'll direct you to Tricia if you call us, again (808) 669-0070. But Tricia, why don't you give them both of your numbers, you know the office and the cell phone. And tell them how they can reach you, what they can do, they can talk to someone if you're not there, etcetera.

P: Sure, yeah. My office number is (808) 874-8800 extension 116. One of my team members, Kathy, is at extension 124, and my cell number is (808) 283-7811. My website is MortgageMaui.com and the thing is, it's free. It's free to talk to people and it's free to get the knowledge and between Betty and I we have more decades of experience than we probably want to admit.

B: True.

P: And we've been in the good housing markets and the bad housing markets and I frankly think that having Betty as a resource for you is amazing. You know, we were just talking before the show, Betty could make a beautiful living just dealing with rich investors and not have to, but her heart is in the community to and it's really important that you recognize the kind of resource that you have here. She's so experienced and so knowledgeable and so trustworthy that you'll get great results and great guidance from her.

B: Very nice of you to say that, but we do, we do care about the community. In our office, either we'll help you or Mitch, Dean Otto, Elizabeth Quayle. We've got a great group of people that will step in and help you. And I think the biggest thing is what you just said, that this part really is free. You can come in, you can talk to us, one of us can show you some places, one of us can be sure that you've talked to Tricia and you have an idea of what you can afford, what you can qualify for, etcetera, so that you don't get out there looking at a house that you can never really buy. One of the things I also think is important to realize is that it won't be your final resting place. It might possibly be, the people we were talking to today, it might be your first home and I think it's important to know that you just want to do it. You want to step in and you want to buy something and then maybe as the kids get a little older or as something else changes in your life, you're going to buy another home. And you're going to call Tricia and you're going to call Betty and we're going to be there and hopefully we'll keep you moving along as your needs increase.

P: You know one thing I just wanted to go back to the financial part of this and I don't want to dwell too much on it but because I really think that owning a home is primarily pride of ownership and emotional ?

B: But the financial part Tricia, the part that you are bringing to the table today is what we really need. We talk a whole lot and every time we do a show about what you can buy but I'd love to have Tricia keep going and I'll interject from time to time but go over some of these mortgages that you guys can do. And let's keep reminding your phone number, but I think people should be calling you and talking to you now. It's going to be too late soon.

P: Yeah, well I agree with that and also putting a plan in place. I have too many subjects here but I want to go back to that because we have had such success with people that have been on a one-year or even a two-year plan and they end up beating their plan. Even if they're on a two-year plan, after a year they have the money saved up and they have their credit cleaned up. There's nothing like a goal to go for, because so many people right now are overwhelmed about the whole thing. It's like, "God, I'm barely keeping my job how can I expect to buy a home?" But there's a foundation that I think all of us are trying to reestablish financially and I think that a home is a big part of that. So I really believe in the well being part of it but also keep in mind we were talking about rents going up a little while ago, and they are, but if you've got a 30-year fixed mortgage your payments are never going up except for your insurance and your taxes. That fixes your payment for thirty years and at the end of thirty years you are going to owe nothing on that house unless you refinance it. So I think that's an amazing thing and we're the only country in the world that offers that product. You go to Europe, you go to Canada, you go to Asia, they don't have thirty-year fixed mortgages. This is an amazing thing where your income is going to rise over thirty years, the value of the home is going to rise over thirty years, but your payment is going to stay the same and that's the biggest factor in your housing expense.

B: And you get to keep living there.

P: You get to keep living there in the end of thirty years you own it free and clear and I'm not a big believer in taking money out of your home but if you have an emergency, it's there, if you need to send a kid to college and you haven't saved enough, you can pull some money out. There's so many advantages from an economic standpoint and in the news it's been sort of a downer for the last five years about real estate. But the smart money is buying.

B: That's why people are missing out right now because everybody is reading all of the stuff, they're listening to it on the news, they're listening to it sometimes to total national news or they're still looking at things that the market is down, wait. What we're saying right now is that the bottom is over, and when you want to buy is as the market starts to edge up because you know that recovery is happening and it's happening now. But again, Tricia what would you say right now, you came up with a figure for me and a client the other day that was interesting about how much per $100,000 a mortgage was. You probably have it in front of you ?

P: I can't remember.

B: Call her about that because this really helped me and I was just sitting with someone and I was trying to go through and give them a variety of things and she came up with an interesting guideline for it. So I think, call because I'm sure it's something that is sitting there on your desk. But tell me again (808) 874-8800.

P: Yeah, extension 116 is mine, and you can always press "zero". Our office works as a team so we're different than a lot of companies where they're individual loan officers but we have three loan officers in addition to myself who can help and we all feel the same way. We want to get you into homes and we don't care if it's next week, I mean some of the banks will only talk to you if they can really give you a mortgage today but we're not like that. We want to get you in whether it's today or six months from now, but preferably today.

B: Preferably today, we all like today. Today would work for us but ?

P: Yeah, and it's better for you if it's for today.

B: You know, when you were saying a minute ago this idea of saving money, etcetera, because we're all on Maui and we're around so many people in what we do and how we work ? and that's everybody who is eating out all the time and we all love doing it. But for every time you go out and have a hundred dollar tab, that's a hundred dollars toward a home. If you do that ten times and basically it's $1,000. Now maybe a hundred dollars is an exaggeration but it still seems like in Maui we're all spending too much money and if we take a moment and look at that and I've never been a good budgeter but I think for any of us, if you take a look at the money that you're spending that you don't need to spend and Tricia can counsel you on that. She can take a look at what you're doing, even if you just write out where your money is going, the odds are that you can find some ways that you can save a lot of money even though currently you think you don't have enough money to live. Typically you do.

P: That's absolutely true. I mean, it's amazing when I sit down with people and their budgets, where we jointly can find things to cut out. I don't sit there and say, "Oh, you should cut this out and cut that out" because you're the one that's doing it but we can jointly make up a plan. And it's so effective. It's amazing how people can buy homes at the end of that.

B: It's true, and there is nothing like that feeling when you see somebody get their first home. We sold a house in Napili this year to the greatest family. The parents were actually buying it for them and the kids were going to end up paying them. And it was set up with a mortgage, but I mean the parents were able to do it. These kids are hardworking people and they felt like they would never ever own something and it was great that they had the ability to have some parents that could really help but what a difference from the day it closed and for them going into that house, nothing ever is more satisfying to me than seeing that.

P: It's true, and you know you bring up something interesting Betty ? the getting help thing. I mean help can come from all kinds of people, and family is logical but also some of us have friends on the mainland who love to come visit and they love Maui but they're not going to buy a place by themselves, but maybe they'll help with the down payment and they take a percentage of the ownership when you sell or you can buy them out later or whatever. There's plenty of creative things, we just have to decide that we want to explore options and then the options come.

B: Well in the case of these kids I was talking about, the parents are going to keep the ohana for themselves so they could be here, they could be helping with the kids and they would be totally in their lives. You know, you don't want, when kids come to visit or at least we don't, we want them to be with us so that if they go and they're staying in a hotel or condominium and they're not with you from the standpoint of grandparenting, that's not so good. You want them to be with you, you want to be a part of their lives, and it will help when you have your own home.

P: Definitely.

B: A lot of thoughts, but back again quickly to interest rates.

P: Well you know, I've mentioned the VA Loan before because that is absolutely the most amazing loan there is. That's three and a quarter percent right now with no points, now there is a funding fee for VA but that is a onetime thing and that gets added on to the loan. So it's an amazing loan program and I don't think enough veterans are taking advantage of that.

B: Which is a tragedy because they've worked so hard for all us and we should see to it that we work for them.

P: Exactly, so we really are promoting the Veterans' loan right now just so we have an opportunity to really give back because it is such a great loan both for refinancing and for purchasing it's amazing.

B: It's a higher limit, isn't it today the mortgage or the amount you can borrow for VA or FHA is higher in Maui than it used to be.

P: That's correct, it's over $600,000 and you can add the funding fee and other things to it. I think we're doing a loan right now that's $679,000 so you know there's plenty of opportunities. There's still USDA which is a hundred percent which I've mentioned. FHA is only 3.5% down, even conventional loans are still under four depending on credit scores and debt to income ratio among the value but we're closing those at three and a half still. So it's an amazing market but rates are inching up and the experts agree, there's a lot of consensus that rates are going to be higher this year.

B: Well I know it sounds complicated and especially when you're listening to us on the radio. Sometimes I relisten to the show when I drive home and I know we talk kind of fast, especially Tricia and I, we kind of get into it with one another and it's really fun. But the bottom line in it all is that you just need to make one decision and call somebody and ask for help and then put one foot in front of the other. You make the first call and say, "We want to be able to buy a home but don't know if we're ready". You need to probably, I mean call us, but I'd say talk to your lender first. It's a great way to start and then call us. But Tricia and her people are very, very patient and they'll look it over and they're not going to judge you. I mean we've all had debt problems or tax problems or different problems over our lifetime but you could be counseled in what to do to clean up debt or clean up old tax bills or whatever it is that's a problem. But you need to start and you can probably, like Tricia was saying, maybe it's three months or maybe it's a year, maybe it's two years, but once you're on that path and if you can keep putting one foot in front of the other. Have you and your husband work diligently to agree on things and I hate to say this because maybe this is too much to say maybe but try your best to agree and to work together because it can't be just one person, you need to do it as a family. And in a certain way you can pull the kids in too and say it has to be a family decision and a family plan.

P: Yeah, absolutely. I mean, I think all of us over consume and the kids are no exception.

B: Well especially when we're allowing them to over consume. It is different but it's hard today because everybody seems to have everything. Every kid seems to have an iPhone or they've got an iPad or some other smartphone and they can barely live without it. But again, I think you've got to remember that the kids are going to grow up and they're going to move on, so what you really need now is to find this way and this path to buy a home. Again, Sakamoto Properties (808 )669-0070 or SakamotoProperties.com and Tricia Morris at ?

P: My cell phone is (808) 283-7811 and the office is (808) 874-8800, just press "zero" and we'll help you.

B: Right, you know we're now as quickly as this seems, we're at just past the two-minute warning so to speak so it's moving along quickly. Can you think of anything else that we should be saying right now to encourage someone to do it now. I mean don't wait any longer.

P: Well you know, I think for many of us because it's been such a rough road, the last five years have been really tough on a lot of people, it's time to look for the future. You know, I think we've all be sort of like trying to react to the past, fix the past, but it's time to step forward and just move to the future and have a bright future for all of us.

B: I think so, and I think you look sometimes at someone, someone will say to Roy and I sometimes, "You guys are just so lucky". And Roy likes to say, "Remember, the harder we work, the luckier we get". But I think pay attention to those things, I mean a lot of us started at a time together when we had nothing and somewhere we worked really hard and we worked all the time but it's paid off for us and our families and we're pretty lucky in a way and pretty fortunate. And I think we are now closing out pretty quickly. So I think we've gotten the interest rates, we haven't told you anything about real estate but there's a lot of it. West Maui is a little harder right now, I think the lowest priced home is probably close to $500,000 but we're going to find you something because something comes onto the market all of the time. We aren't seeing as many short sales and things along that line but here we are, we're at that "Aloha" moment. Tricia, thank you so much for being here, it's been fabulous.

P: Thanks for the opportunity.

B: And, Janelle is over here hiding, we forgot to say. She's the person running our lives. Aloha, Danny Couch is back.