A bad lender can ruin your life. Even life in Hawaii.

A friend of mine recently told me a very sad story. When they purchase their first home in Makakilo last year, she said the lender they worked with "screwed us over."

My friend should have easily qualified for a VA loan, but instead this lender used a conventional loan and lied about their income without telling them. In the end, the result was they owned a nice condo in Oahu, but they had a mortgage payment they couldn't afford with a prepayment penalty.

I wish this was the only story I had heard like this, but it's just one of dozens. Another client of mine had found a lender online that promised them great rates on the house he was buying in Kamehame ridge, which is a nice upscale community in the back of Hawaii Kai. But then the lender changed all the terms on the day of closing, when it was too late for him to find a new loan.

Sometimes buying a house in Hawaii can be a little too dreamy for people, and they can lose sight of the fact that it's still a huge financial move. You still have to shop for a loan, find a good reputable lender, and make sure you don't get screwed over.

How can you find a good lender in Oahu? For one thing, if the lender you're working with is new in the business, run for the hills. It takes at least 2-3 years for a loan officer to learn the business. In Hawaii the laws are very specific to this state, which means there's more to learn than in other states.

Also, you should check your lender's references. Find a few of his past clients and see if they did a good job and delivered the loan that fit the quote given at the time of application. You might also want to check and see if there are any complaints filed in the state he is licensed in. In Hawaii, mortgage brokers and lenders can be checked out with RICO, the regulated industries complaint office.

How can you tell if you're getting a good loan? The only way really is to have another lender look at it. I tell people to send their good faith estimate to a competitor. Also if you don't end up getting the deal you were quoted, walk away. Even if it's the last day of closing, don't let your lender make a move like that. It could stick with you for a long time.

The worst case scenario is that you have a payment you can't make, so you end up missing payments, and in a few years you could be facing foreclosure.

Need a good lender in Oahu? Thinking about buying a home in Hawaii? I've got several I can confidently recommend. Email me!