Homeowners beware: Efforts to save money could cost you big time
A hefty fine was recently levied against a business owner for illegal construction activity on Oʻahu.
Honolulu's Department of Planning and Permitting reduces permitting backlog
The City and County of Honolulu said it is seeing an uptick in illegal construction activity that included a recent case where someone forged a professional engineer's stamp on building plans. They were fined $10,000 and ordered to stop work.
'And it can be anywhere within that project. It could be even during it where things start to go wrong and you start to notice it as a homeowner,' said Building Industry Association of Hawaiʻi CEO Roseann Freitas.The Building Industry Association of Hawaiʻi said contracting a company without a permit may seem appealing, but it almost always costs more in the long run.
'And unfortunately, you hear of those who get the money and then leave the site. But even further down the road, the project's done. It's not permitted appropriately. So, now if you go to sell a home, if you haven't permitted the work, you're going to have problems,' Freitas said.
Experts said homeowners often think they are getting a good deal by going through an unlicensed contractor, but once the job is done or even when construction starts and gets underway, problems start building up.
Honolulu's DPP to use artificial intelligence software to speed up permit process
'If there is an issue, you can go to RICO, the regulatory agency, for some remedies and see if they can help you,' said Freitas.
The Regulated Industries Complaints Office can only help with remedies regarding licensed contractors. Tips for spotting unlicensed companies include not letting anyone pressure you into quick repairs or fast fixes.
'How straightforward are they with you? Or do they say, 'Oh, you really don't need a license.' Because here in the state, you really do need a license to do that type of work, and especially projects over $1,500,' Freitas said.
The Department of Planning and Permitting said the recent violation was discovered during a review of building plans, and the business owner who aided and abetted the unlicensed contractor will have to foot the bill for a $10,000 fine.
Download the free KHON2 app for iOS or Android to stay informed on the latest news
'That doesn't mean the state can't go after them. But for you as a homeowner, there's not a lot of recourse,' Freitas said.
Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CBS News
3 hours ago
- CBS News
How will interest rate cuts impact my HELOC payments?
With inflation showing recent upticks and interest rates remaining elevated, borrowers are facing higher loan costs and stretched household budgets. Federal Reserve rate cuts in the coming months may provide much-needed relief, though. Millions of homeowners with home equity lines of credit (HELOCs) stand to benefit, given that these variable-rate loans currently average 8.13% nationally. Unlike fixed mortgages that stay locked regardless of Fed policy, HELOC rates can and often do move with wider rate changes. And, even a modest rate reduction could translate to meaningful monthly savings. But if rates drop, what happens to your HELOC payments, and how soon could you see a difference? Here's what mortgage professionals say about timing, savings potential and strategies for managing HELOC debt in a fluctuating rate environment. Find out how affordable your home equity borrowing options could be today. "HELOC interest rates are generally structured as prime plus a margin," Debbie Calixto, sales manager at mortgage lender loanDepot, says. The federal funds rate influences the prime rate, while the margin reflects an additional percentage based on your credit score and loan details. "When the Fed cuts the federal funds rate (let's say by 0.25%), the prime rate usually drops by the same amount almost immediately, since banks follow the Fed's lead," says Steven Glick, director of mortgage sales at HomeAbroad, a real estate investment fintech company. "That lowers your HELOC rate, which directly cuts the interest charged on your outstanding balance." If you have a $50,000 balance at 8.5%, Glick says a 0.25% drop could shave about $10 to $15 off your monthly interest-only payment. While HELOC rates move with Fed cuts, the reality is that not every borrower will see lower payments immediately. These factors can affect when you'll see relief: Compare your home equity borrowing options and lock in a great rate now. Before assuming how Fed cuts will affect your HELOC, experts encourage getting clarity on your loan terms by asking three questions: Besides asking your lender about rate adjustments, there are a few proactive steps you can take to stay prepared for rate movements: "Calculate what your monthly payment would look like with a 0.5% shift up or down using an online calculator, so you're not caught off guard," advises Glick. Simeone suggests testing an even wider range. "Look at the existing rate and increase it by as much as 2% or to the maximum interest rate permitted on the HELOC," he says. Karen Mayfield, national head of originations at mortgage-as-a-benefit provider Multiply Mortgage, recommends maintaining your current payment amount even if rates drop. This way, the difference goes toward your principal, reducing your interest exposure when rates rise again. "If [your] HELOC's outstanding balance is high, consider refinancing for a blended rate," says Mayfield. "Even if [you] lose [your] 3% first mortgage interest rate, having a 7% interest rate that includes both [your] first loan and pays down/off [your] HELOC at 10% may make sense." "Proactive planning can [help] you adapt to rising or falling rates while minimizing financial stress," Calixto says. If you're unsure how rate changes might affect your situation, start by reviewing your HELOC terms. You might also consult home lenders about refinancing options or converting to a fixed-rate loan if rate volatility becomes a concern.
Forbes
3 hours ago
- Forbes
Current HELOC & Home Equity Loan Rates: August 20, 2025
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. Home equity loans and home equity lines of credit (HELOCs) allow homeowners to tap into the value of their homes. A home equity loan is a fixed-rate, lump-sum loan that allows homeowners to borrow up to 85% of their home's value and pay that amount back in monthly installments. A home equity line of credit is a variable-rate second mortgage that draws on your home's value as a revolving line of credit. Both options use your property as collateral for your payments, which means your lender can seize your property if you can't repay what you borrow. Ideal for Medium-Sized Projects A $100K HELOC is suitable for more extensive renovation projects or other significant financial needs. Compare the rates and terms to find the best fit for your situation. Access More Funds for Major Investments For larger projects or investments, a $250K HELOC provides the necessary funds with various LTV options. Explore these rates to determine the right balance between borrowing capacity and risk. Maximize Your Borrowing Power If you have substantial equity in your home and need significant financing, a $500K HELOC offers a great deal of borrowing power. Evaluate these options to find the optimal rate and term for your goals. A 5-year term offers a shorter repayment period with typically higher monthly payments. These products are suitable for borrowers looking for a quicker payoff. With a 10-year term, borrowers can enjoy a balanced monthly payment while still building equity quickly. 10-year home equity loans are ideal for medium-sized projects or financial needs. A 15-year term provides lower monthly payments compared to shorter terms, offering more affordability while still progressing toward your financial goals. Offering longer repayment and lower monthly payments, 20-year home equity loans are suitable for larger investments and long-term financial planning. The 30-year term maximizes affordability with the lowest monthly payments. These options are best for substantial borrowing needs and long-term investments. The more home equity you have, the higher your net worth rises. Building wealth is vital to having long-term financial health, and home equity is one way to build wealth. Every time you make a mortgage payment, you increase your home equity, or how much you own of your home. The more equity you have, the more wealth you amass. You earn home equity every month when you make your mortgage payments. The more payments you make, the more your equity increases. A home equity loan is a lump-sum loan based on how much of your home you own outright. So if your loan-to-value ratio (LTV) is 50%, you can borrow, say, 80% of that LTV. Most lenders won't let you access 100% of your home's equity, but even getting a portion of it through a home equity loan could be a game-changer for your big financial needs. You'll calculate your home equity by taking your home's current value - based on its most recent appraisal - and subtracting it from your current mortgage balance. For example, say your home is valued at $500,000 and your mortgage's outstanding balance is $250,000. This would mean you have $250,000 in home equity, and your loan-to-value ratio (LTV) would be 50%. If you're looking for a home equity loan or line of credit, lenders usually only approve up to a certain LTV ratio. For example, some lenders require 80% LTV or less.
Yahoo
6 hours ago
- Yahoo
12 Reverse Mortgage Pros and Cons To Help Retirees Avoid Financial Disaster
For many retirees, rising living costs and limited income can make financial stability feel out of reach. A reverse mortgage, also known as a home equity conversion mortgage (HECM), may offer a solution — allowing homeowners aged 62 and older to turn their home equity into cash without selling or making monthly payments. But while this option can provide much-needed relief, it also comes with risks that could impact your long-term financial health. Read Next: Find Out: In this guide, we break down 12 key pros and cons of reverse mortgages to help you make an informed decision — and avoid costly surprises down the road. Reverse Mortgage Qualifications In order to apply for a reverse mortgage, you must meet the following qualifications: You must be 62 years of age or older. You must live in the home you own. Your home must be paid off or have a low enough mortgage balance for you to pay it off with funds from the reverse mortgage transaction. You must have the financial means to pay your property taxes and insurance. You must receive consumer information, which is typically free or very inexpensive, from an HECM counselor before obtaining the loan. For You: The Upsides Seniors can use the payments from these specially structured loans to supplement their incomes, pay for healthcare and cover their expenses. Even better, the money is usually tax-free, even though it's used as income. You keep the title to your primary residence, and your Social Security benefits and Medicare benefits aren't affected. Perhaps most importantly to seniors concerned with security, you don't have to pay the money back for as long as you live in your home. Additional pros include: No mortgage payments: You don't have to make mortgage payments, like you would with a traditional mortgage. Thus, a reverse mortgage is an affordable option for seniors on a fixed income. Receive payments: Getting money through a reverse mortgage helps with cash flow. No taxes on proceeds: Money you receive from a reverse mortgage is not subject to taxes, which also helps if your income from other sources is inadequate. No need to sell your home: A reverse mortgage allows you to tap into the increase in your home's value without having to sell the home. Can delay using retirement savings: Using the money from a reverse mortgage to pay expenses keeps you from having to drum up cash by selling stocks and other investments. This gives such investments more time to grow. The Drawbacks If you do sell your home, or even if you just move out, you have to pay the money back. If you die first, your spouse or your estate picks up the tab for you, although in some cases, a non-borrowing spouse can remain in the home. Even in those cases, however, the surviving spouse will no longer receive payments since they weren't on the loan. In a lot of cases, the home must be sold to pay back the reverse mortgage loan. That's bad news for any heirs who were expecting a windfall of inheritance. Other cons include: You lose tax breaks: Interest paid on reverse mortgage loans is not tax-deductible, even in part, the way interest on a traditional mortgage is. The bill grows with time: With every reverse mortgage payment you accept, interest is added to your growing balance and the cumulative effect never ceases for the life of the loan. Expensive in the long run: Monthly servicing or origination fees, insurance premiums and mortgage interest are added to the amount you initially borrowed, and interest is then recalculated periodically on that amount. That means over time, the amount you owe grows. Involvement of all homeowners required: Everyone listed on the title for the property must also be named on the reverse mortgage, and at least one of you must be age 62 or older. Homeownership costs: A reverse mortgage requires you to stay up to date on property taxes, utilities and insurance premiums. The terms can be complicated for many homeowners to understand. Residence required: You cannot have a reverse mortgage on a property unless you live in the home. So if you move — to a nursing home, for example — the reverse mortgage will come due. Possible impact on Medicaid payments: Reverse mortgage loans might impact your payments from Medicaid or other public assistance programs. Final Take To GO: Now, the Lender Pays You If you go with this financial plan, you'll be able to stay in your home for many years, and if you're confident you'll be able to afford the ongoing homeownership costs, it could be a good deal for you. Simply put, reverse mortgages are just another way for homeowners to tap their equity. Like home equity loans, home equity lines of credit (HELOC) and cash-out refinances, reverse mortgages are loans borrowed against equity — but they're structured differently than the rest. With regular mortgages, borrowers increase their home equity with each monthly payment they make to their lenders. Just as the name would have you believe, reverse mortgages do the opposite — the lender takes part of the equity in the home and converts it into payments made to the borrower. So, if you're wondering if it is a good idea for you, here are some key questions to consider: Are you willing to pay the up-front and long-term costs of a reverse mortgage? Upfront costs include lender fees, your initial mortgage insurance payment and closing costs. Loan interest and recurring mortgage insurance payments represent long-term costs. A lower interest rate from a mortgage company like SecurityNational Mortgage Company — an HUD-approved lender for reverse mortgages — can save you hundreds or thousands of dollars over the life of the loan. Locate the best reverse mortgage interest rates by shopping a wide range of reverse mortgage lenders. Do you plan on staying in your home? If you don't plan on staying in your house for the long haul, the upfront costs won't be worth it. Do you live on a fixed income with few financial resources? If you're approved for a reverse mortgage and can't pay your property taxes or insurance, you'll risk the possibility of a foreclosure. Will your partner or spouse who lives with you be a co-borrower? Your significant other must be a co-borrower or they'll have to vacate the home. The co-borrower must repay the loan if you die. Is it important to leave your home to your children or other heirs? If this is important to you, a reverse mortgage might not be a good choice because you could have to sell your home to repay the loan. Andrew Lisa and Cynthia Measom contributed to the reporting for this article. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 7 Ways To Tell If You're Rich or Middle Class -- It's More Than Your Paycheck 9 Downsizing Tips for the Middle Class To Save on Monthly Expenses This article originally appeared on 12 Reverse Mortgage Pros and Cons To Help Retirees Avoid Financial Disaster Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
