Summary: We all know that buying a home costs a lot of money. But exactly how much can you expect to pay? If you’re thinking of buying a home in Washington State in 2020, this article will provide you with the details you’re looking for in terms of cost of a home purchase.
As of February 2020, the median price for a home in Washington State was $412,900. With a 10% down payment (the average amount paid), that would result in a loan amount of $371,610 and a monthly payment $1,657 at the current interest rate of 3.47% for a 30-year fixed-rate mortgage. Closing costs in this scenario could range from $8,258 to $20,645 based on the average closing cost amount of between 2% to 5% of the purchase price of a home.
Cost of Buying a Home in Washington State: 2020
What’s the current cost of buying a home in Washington State, in 2020? That largely depends on where you live. Home prices vary widely throughout the state, and are highest in and around Seattle. For this overview, we will be using median and average figures for the state as a whole.
1. Median home price is around $412,900
According to the real estate data company Zillow, the median home price for the state of Washington was $412,900 in February 2020. That was 4.3% higher than a year earlier. Of course, prices are higher in the Seattle metro area. But for the purposes of determining home buying costs statewide, we’ll use $412,900 as our starting figure.
2. An average down payment is around 10%
The minimum down payment for a mortgage loan in Washington State can vary based on the type of loan being used and other factors. Conventional home loans offer down payments as low as 3% these days. The FHA program allows borrowers to put 3.5% down. And military members can use a VA loan to finance 100% of their purchases.
But the average down payment in Washington is higher than these minimum requirements. On average, home buyers across the state make down payments of around 10%. Ten percent of the $412,900 median home price mentioned earlier is $41,290.
But don’t be too concerned if you can’t afford a down payment of that size. As mentioned earlier, there are low-down-payment options available as well.
The down payment is an out-of-pocket cost of buying a home in Washington. It’s an investment that must be paid at closing. But the money doesn’t necessarily have to come from your own pocket. Many mortgage programs today allow borrowers to use down payment gifts from family, close friends, and other approved donors.
3. Mortgage rates are currently hovering just below the 4% mark
As of the third week of February 2020, the average rate for a 30-year fixed-rate mortgage loan was 3.47%. That’s based on the weekly survey conducted by Freddie Mac. Borrowers with excellent credit, and/or those who use an adjustable-rate mortgage loan, can often qualify for better-than-average rates.
But the 30-year fixed is by far the most commonly used mortgage loan product in Washington, so that’s what we’ll use to continue our cost analysis.
4. The average monthly payment in this scenario would be around $1,657
Using a loan amount of $371,610 and a mortgage rate of 3.47%, the monthly payments would come to around $1,657. That’s if they were spread over 30 years, as would be the case when using a standard 30-year fixed mortgage loan.
5. Average closing costs when buying a home in Washington: between $8,000 to $20,000
Closing costs typically average around 2% to 5% of the loan amount (though they can fall outside this range in some cases). In this scenario, our base loan amount was $371,610. That would put the closing costs somewhere between $8,258 to $20,645, most likely. But there are many variables that can affect closing costs. This is just an estimate.
This is a theoretical look at the cost of buying a home in Washington State in 2020. As you can see from this exercise, there are many variables that can influence the actual costs you pay when buying a house in Washington — and we didn’t even talk about discount points or mortgage insurance.
Get an estimate: Please contact us if you’d like to get a more precise estimate of your prospective housing costs. We can give you a fairly accurate estimate of your monthly payments and closing costs, based on the amount you want to borrow and other factors. That’s the best way to determine the cost of buying a home in Washington State.
In Need of a Loan in Washington?
If you are considering buying a home in 2020 in Washington State, you’ll need a mortgage to finance the purchase, and Sammamish Mortgage can help. We have been helping countless borrowers secure the home loan they need to buy a home in Washington, Idaho, Colorado, and Oregon for over 28 years, and we’d love to help you too. Get in touch with us today to discuss all our mortgage programs and to have all your loan-related questions answered!