Kenji recently moved from California to Oahu and is purchasing a condominium for $650,000. His California lender tells him the loan will be secured by a deed of trust with a trustee, just like his California home purchase. Kenji's Hawaii real estate licensee should advise him that:
Correct Answer
D) Hawaii primarily uses mortgages as security instruments, so the lender will likely use a mortgage rather than a deed of trust
Hawaii primarily uses mortgages — not deeds of trust — as the security instrument for real property loans. Unlike California and many other states that routinely use deeds of trust, Hawaii lenders typically use the two-party mortgage instrument. Kenji's licensee should clarify this distinction so he understands the different legal framework that will apply to his Hawaii purchase.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An adjustable-rate mortgage (ARM) has an interest rate that changes periodically based on market conditions, typically after an initial fixed-rate period. The rate adjustment is tied to a financial index plus a margin.
Closing costs are the fees and expenses paid by the buyer and seller at the closing of a real estate transaction, beyond the purchase price. They typically range from 2-5% of the purchase price.
A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. It is originated and funded by private lenders and may be conforming or non-conforming.
More Financing Questions
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