What’s the average down payment on a house in Washington State? The answer depends on what you mean by “average.” Some buyers are asking what borrowers typically put down, while others want to know the minimum a loan program allows.
Those are not always the same thing. In Washington State, the amount buyers put down can vary based on the type of home loan they use, their finances, and whether they want to lower monthly costs or qualify with less cash upfront.
If you’re planning to buy a home in Washington State, it helps to separate average borrower behavior from lender-required minimums. This guide explains that difference and then walks through how down payments work for common loan types, along with when mortgage insurance may apply.
An average down payment reflects what borrowers commonly choose to put down. A minimum down payment reflects the lowest amount some borrowers may be allowed to put down for a specific loan program.
That distinction matters because a low program minimum does not always mean every borrower will qualify with the least amount down. Actual cash needed can still vary based on credit, lender overlays, reserves, home price, and overall financial profile. In other words, the average tells you what buyers often do, while the minimum tells you what may be possible in some situations.
A down payment is needed if you plan to finance a home purchase. Your down payment will go towards the purchase price of your home and is required by your lender, unless you qualify for a VA loan which does not require a down payment for those who are eligible.
The amount of your down payment will depend on a few things, including the price of your home, the type of mortgage you’re applying for, your credit score, and your financial profile.
In some cases, your credit score can affect the down payment options available to you. Certain government-backed loans may allow a 3.5% down payment with a credit score over 580, but require a 10% down payment with a credit score below that number.
A higher down payment can sometimes help offset a lower credit score, while stronger credit may improve access to lower-down-payment options. However, the exact requirement depends on the kind of home loan you get.
Generally speaking, putting more money down is better because it will improve your chances of getting approved for a mortgage and can help qualify you for a lower interest rate. In turn, this can help you save a lot of money in the long run.
A higher down payment amount will mean a lower loan amount that you will need to pay back. This can reduce your monthly mortgage payments and significantly lower the amount you’d have to pay in interest over the life of the loan.
Shelling out for a larger down payment could mean that you may be able to avoid paying Private Mortgage Insurance (PMI), which is required on mortgages with less than 20% down. If you can come up with at least a 20% down payment, you can avoid having to pay PMI, which can further reduce what you owe.
Your down payment will be required when you first take out your mortgage, so you’ll need to make sure that you’ve saved enough before you start your search for a home in Washington State.
The question is, how much down payment might you need for a home purchase in Washington State?
Your down payment amount will usually depend on the loan program you choose, along with your credit profile, lender requirements, and home price.
Borrowers using the VA mortgage program may be able to avoid having to make a down payment at all thanks to the zero down payment option for eligible active duty service members, military veterans, and surviving spouses.
You may also be able to qualify for a down payment assistance program in your state or city. Consult with your mortgage lender to see if any of these are an option. Alternatively, you may be able to get down payment assistance in the form of a cash gift from a family member.
The OIR also reports average loan-to-value (LTV) ratios for loans that have closed. In simple terms, LTV reflects the portion of the purchase price that isn’t covered by your down payment.
For instance, if a borrower obtains a loan for 80% of the home purchase price, they’ll have to make a down payment of 20%. The LTV is 80% — the down payment is 20%.
Your LTV tells the lender how much of a risk you will be as a borrower. Generally, high LTV ratios are considered higher-risk mortgages. As such, if you are approved for a home loan with a high LTV, you may likely be given a higher interest rate to offset this risk. In contrast, a lower LTV will ensure a lower interest rate.
In addition, a loan with a high LTV may require you to buy mortgage insurance to offset the lender’s risk, which will make your home loan more expensive. This insurance is called Private Mortgage Insurance (PMI).
More specifically, PMI will be required if you make a down payment of less than 20% of the purchase price of the house. If you can muster up at least 20%, you can avoid paying PMI.
A recent Origination Insight Report gives us some insight into average loan-to-value ratios for home purchases.
Confused yet? Don’t worry. We’ll cover more about LTV, PMI further down.
Conventional loan down payments can vary widely from one borrower to the next in Washington State. “Conventional” means the loan is not backed by the government, which distinguishes it from FHA and VA.
It’s important to note, however, that a 20% down payment is not required for conventional loans. Home buyers in Washington State can qualify for conventional financing with a down payment as low as 3% of the purchase price.
However, just remember that PMI will be required for conventional loans with down payments less than 20%. That said, the minimum down payment that borrowers may put down with a conventional loan is 3%, which is available through the conventional 97 loan program.
Borrowers are generally required to put down at least 3.5% when using FHA loan programs to buy a house.
These loans are attractive to borrowers who may be unable to put together a large down payment or who have a credit score that’s on the lower end, as FHA loans have less stringent requirements for approval. However, there are some drawbacks to FHA loans, as you’ll may more in the end.
The Veterans Administration (VA) home loan program offers 100% financing for eligible borrowers in Washington State. This allows borrowers to buy a home with no down payment whatsoever and often without mortgage insurance. The loan is backed by the United States Department of Veterans Affairs.
Despite the 100% financing that’s available through this program, some borrowers choose to make down payments to reduce their mortgage amounts.
Back to LTV and PMI: as noted, when a mortgage loan accounts for more than 80% of the home value, the borrower is usually required to pay private mortgage insurance (PMI).
Almost all borrowers who use the FHA loan program end up paying mortgage insurance premiums, which can increase the monthly payment. The FHA mortgage insurance premium (MIP) is a fee that is added to your monthly mortgage payments. The policy is designed to protect the lender in the event that you default on your FHA mortgage.
In fact, borrowers who take out an FHA loan must pay two mortgage insurance premiums: one that is due in a lump sum at the time of closing, and another every year for as long as you are repaying the mortgage, in the majority of cases.
Most conventional home loans with an LTV above 80% also require Private Mortgage Insurance (PMI). The VA program is unique in this regard. Home buyers who use a VA loan to buy a house could qualify for 100% financing without having to pay mortgage insurance.
In other words, if your down payment on a Washington State home is under 20%, you’ll often be required to carry mortgage insurance. The upside is that this insurance allows you to qualify for a loan with a smaller down payment, which might not be possible otherwise.
As you can see, the down payment on a house in Washington State can vary depending on the type of mortgage you take out, as well as how much you pay for a home.
Sammamish Mortgage can help. We serve clients across Washington, Idaho, Colorado, Oregon, and California. Since 1992, we’ve been providing several mortgage programs and products with flexible qualification criteria to borrowers across the Pacific Northwest. Visit our website to get an instant rate quote or to use our online mortgage calculator. Or, reach out to us if you are ready to get pre-approved for a mortgage.
It depends on the loan type, the home price, your credit profile, and your lender’s requirements. Some borrowers may qualify for low-down-payment options, while eligible VA borrowers may be able to buy with no down payment.
No. Washington State home buyers can qualify for conventional financing with a down payment as low as 3%, though PMI is typically required with less than 20% down.
FHA borrowers are generally required to put down at least 3.5% when using FHA loan programs to buy a house.
Yes, eligible borrowers may be able to use the VA home loan program, which can offer 100% financing with no down payment.
In some cases, your credit score can affect the down payment options available to you. Certain government-backed loans may allow 3.5% down with a credit score above 580, while lower scores may require 10% down. The exact requirement depends on the loan type and lender guidelines.
PMI is generally required when the down payment is less than 20% on a conventional loan, meaning the loan amount is more than 80% of the home value.
A higher down payment can improve approval odds, potentially help you qualify for a lower interest rate, reduce the loan amount and monthly payments, and may help you avoid PMI.
You may be able to qualify for a down payment assistance program through your state or city. Some buyers may also use an eligible cash gift from a family member to help with upfront costs, depending on the loan program and lender guidelines.
Eligible borrowers may be able to use a VA home loan with no down payment. Some borrowers still choose to make a down payment to reduce their loan amount.
An average down payment reflects what borrowers commonly choose to put down, while a minimum down payment reflects the lowest amount some borrowers may be allowed to put down for a specific loan program. The average shows typical borrower behavior, while the minimum shows what may be possible in some situations.
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