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Laupahoehoe, Hawaii
Amid the lush green cliffs of the Big Island's Hamakua Coast, little Laupahoehoe is a secluded, rural place. Once a thriving harbor port and sugar plantation hub, it was devastated by a tsunami in 1946. The town later moved to higher ground and today earns its keep by growing and selling eucalyptus trees.
A post office, a gas station/convenience store, a Catholic church, a charter school and the popular Laupahoehoe Train Museum are here. The Papa'aloa Country Store and Cafe is just outside of town. More services and shopping venues are in Honokaa, 15 miles away, or in Hilo, about 20 miles away.
Laupahoehoe Point Beach Park boasts a sprawling lawn, tall trees and jaw-dropping ocean vistas. White waves crash against reddish brown lava rocks along the shore. The small cove has a boat launch, and the fishing is excellent. Swimming, though, is discouraged.
Neighborhoods are overgrown and have no sidewalks. Homes are "off the grid," utilizing water tanks and septic tanks. Many have water views.
Cost of Living
Laupahoehoe has an overall cost of living that is 29% higher than the national average.
The median household income is $71,750.
Real Estate
The median home price is $510,000. This is a 12% increase over the previous year. For comparison, the national median home price is currently $363,000 (Realtor).
Estimates are that Laupahoehoe real estate prices will increase by 3% over the next year.
Laupahoehoe has some vacation rentals but no apartments. . Notes Laupahoehoe has 530 residents. The population has grown by 9% within the last decade.
The median age is 45. For comparison, the median age of the U.S. population is 38. There is no local hospital, but Hale Ho'ola Hamakua is in Honokaa, 15 miles away.
The crime rate meets the national average.
A memorial in town commemorates the 24 people (21 schoolchildren and three teachers) who died in the 1946 tsunami tragedy. The foundation of the school where they perished is still visible.
Taxes
The combined sales tax rate for Laupahoehoe is 4.5%.
Hawaii does not tax Social Security benefits or public pension income. It does tax income from private pensions, 401(k), IRAs and all other forms of retirement income. The tax rate for that income is between 1.4% and 11%, depending on the amount.
People age 65 and better may receive a homestead exemption up to $140,000.
The average effective property tax rate (the annual tax payment as a percentage of median home value) in Laupahoehoe is .28%. The annual taxes on a $510,000 home are approximately $1,428, without a homestead exemption.
Mortgages for Retirees
As people live longer and mortgage rates are at historic lows, more and more retired folks are considering obtaining a mortgage rather than paying cash for a new home. You are never "too old" to get a mortgage, thanks to the Equal Opportunity Credit Act, as long as you have the means to do so.
Having said that, retirees face some unique challenges when it comes to qualifying for a mortgage. Most mortgage lenders will look at the same criteria as they would for a young first time homebuyer, including your credit history, debt to income ratio and monthly income. The good news is that Social Security benefits and distributions from 401(k)s, IRAs, and other retirement accounts count as income.
However, because retirement accounts become depleted over time they have a defined expiration date. As a result, a mortgage lender will want to know that the distribution income will continue for at least three years after the date of the mortgage application.
It is also important to keep in mind that if your retirement accounts consist of stocks, bonds, or mutual funds or other "volitle" investments, mortgage lenders will only use 70% of the value in the retirement accounts to determine your mortgage qualifcation.
And while Social Security counts as income, if you are drawing on a family member’s record, such as survivor benefits or spousal benefits, then the income must be documented as payable for at least three years from the mortgage application date.
If you cannot qualify for a traditional mortgage, then a reverse mortgage might be an option. Fannie Mae and Freddie Mac also have programs that can make home buying easier. Check with a reverse mortgage lender or these goverment agencies to see loans and programs available to you.
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