Question: How much should someone have saved before they look into buying a $500,000 home in Hawaii?

Answer: This is a tricky question because it depends on the person’s willingness to spend money upfront or pay a higher monthly payment. Of course, the gold standard of down payment is 20 percent down, but many people don’t have $100,000 ($500,000 x 20 percent) lying around or simply don’t want to spend that amount of money if possible. If you plan to occupy the home as your principal residence, the down payment scenarios outside of 20 percent are typically 0 percent, 3 percent, 5 percent or 10 percent.

I would say aim to save for a 10 percent down payment and another $10,000 for closing costs and other costs that pop up with the transaction. So, $60,000 is an amount that gives you options. You could always put less down if you qualify for a low-down-payment program or decide to take on more debt and a higher payment.

Q: What advice do you give people looking to buy a home in Hawaii with a modest income?

A: I would recommend sitting down with your significant other or yourself to determine what kind of monthly payment you would be able to afford and how much you would like to put as a down payment, if any. Do you want to eat saimin for lunch every day or be able to afford a nice dinner once in a while? If figuring out your financials is overwhelming to you, there are many financial advisers that can help guide you in this process. After you have an idea of a monthly payment and a down payment, schedule an appointment with a mortgage lender and see how much you can afford. Once you apply, he or she will advise you on the next steps.

Q: What are some programs available for first-time homeowners?

A: Two programs we’ve been promoting is Freddie Mac’s HomePossible program and the USDA program.

HomePossible — The biggest advantages of this program is that you can put 3 percent down, and the income limitation is $147,700 for Honolulu County, which is high compared with other first-time homeowner programs. This program is not limited to a certain area. In general, this program is pretty straightforward to qualify for making it a very attractive option.

USDA — This is the only 0 percent option for civilian homebuyers. I say civilian because the VA program allows 0 percent down but is limited to veterans. The most important thing to know about this program is that it’s limited to certain areas of the island. Parts of Ewa Beach, Waikele and Kapolei are all eligible. However, if you are looking to live anywhere close to town, this is not your program.