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Living in paradise comes with risks

Posted by The Aramco Group on Tue, May 22, 2018 @ 14:05 PM

The Kilauea volcano continues to spew lava, prompting Hawaii's governor to declare a state of emergency and the evacuation of thousands of residents. Several residential communities remain at risk of damage. This is just the latest crisis in the state. Last January a false alert of an incoming ballistic missile attack from North Korea sent residents and tourists into a panic.

Living in the Hawaiian Islands with its tropical weather and world renewed beaches is worth a little risk according to many of the Aloha State's residents. Purchasing a home in a subdivision near a volcano can often come with steep discounts. Although median single-family home prices in April were near or above $750,000 in Oahu and Maui, a 1-acre lot at Leilani Estates near Kilauea volcano goes for around $20,000.

While insurance companies do not provide lava coverage, many homeowners can utilize their homes fire insurance policy should any damage occur.

Today, conforming no-point 30-year fixed mortgage rates are averaging 4.625 percent, 15-year rates are near 4.0 percent and the 5-year ARM is averaging 4.25 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.