Keri Shepherd - Your Home Loan Professional
Keri Shepherd
Branch Manager
NMLS #350844
Direct: 808-739-7807
Mobile: 808-223-4118
Fax: 877-281-5901
4211 Waialae Ave., Suite 107
Honolulu, HI 96816
I am licensed to originate mortgage loans in the following state(s): HI
Low-Down Payment and Renovation Product Info

Learning Center

Frequently Asked Questions

Here are some of the questions we asked most often. Click on the link to see the answer. Please call me if you have any other questions.

I am currently renting, how do I determine if I can afford to buy?

To determine if it makes financial sense to buy, compare the cost of renting to the after-tax cost of owning. Use our Rent vs. Buy Calculator to make quick rough estimates.  You should also take into account possible rent increases and home price appreciation.

How do I estimate how much home I can afford?

You need to know your price range before you shop for a home. Our Home Affordability Calculator can help you estimate your home price range based on the down payment and monthly payments you can afford.

However, for a more accurate assessment of how much home you can afford, consult an experienced Loan Officer. A good Loan Officer can often show you how you can in fact afford a more expensive home than you might have anticipated.

Why should I “lock in” an interest rate?

When interest rates are volatile, borrowers may want to "lock in" a rate in the event that rates should happen to rise in the near future. Most lenders will lock in an interest rate and set a limit on the amount of time that guaranteed rate is in effect, usually 30, 45, or 60 days.

What are points?

One point is equivalent to one percent of the loan amount. Some borrowers prefer to pay one or two points up front in exchange for a lower mortgage rate, potentially saving the borrower money over the life of the loan.

Mortgage points are considered by the IRS to be a form of pre-paid interest. Therefore, mortgage points can be deducted from taxable income.

What is Private Mortgage Insurance (PMI)?

Private Mortgage Insurance (PMI) is insurance against a loss by a lender in the event of the borrower defaulting on a mortgage. It is usually required for loans in which the down payment is less than 20 percent of the sales price or, in a refinancing, when the amount financed is greater than 80 percent of the appraised value. The premium is paid by the borrower and is included in the mortgage payment.

PMI is similar to insurance by governmental agencies such as FHA or VA, except that a private insurance company issues it.

What is the difference between interest rate and annual percentage rate (APR)?

The Annual Percentage Rate (APR) differs from interest in that it is a yearly rate that takes into account not only interest on the loan, but also mortgage insurance, and certain closing costs — including points paid at closing. Consequently, APR is likely to be higher than a loan's interest rate.

The APR is important because it allows homebuyers to more accurately compare different types of mortgages based on the annual cost for each loan.

What is Loan To Value (LTV)?

A ratio determined by dividing the sales price or appraised value into the loan amount, expressed as a percentage. For example, with a sales price of $100,000 and a mortgage loan of $80,000, your loan to value ratio would be 80%. Loans with an LTV over 80% may require Private Mortgage Insurance.

What is a Home Equity Line of Credit?

A Home Equity Line of Credit (HELOC) is a unique kind of second mortgage, with an adjustable interest rate (typically monthly). There is a draw period during which the HELOC behaves like a credit card, using your home as and the security for the note. You can pay the HELOC off, pull more money out, or make partial use of the total available money at any point. Once the draw period ends, the mortgage behaves like an adjustable rate mortgage that amortizes over a certain number of years.

A HELOC can be used for home improvements, debt consolidation and other major purchases and expenses. Interest paid on the loan is generally tax deductible (consult a tax adviser to be sure). In most cases, the borrower can tap into the credit line by writing line of credit checks or getting a cash advance.