Washington State VA home loans offer many benefits for military members, veterans, and other eligible borrowers. We’ve covered the virtues of this program in the past. Today, we’ll look at the different ways a Washington VA loan could lower your upfront, out-of-pocket buying costs.
The biggest advantage of using a VA home loan to buy a house in Washington is the down payment – or lack thereof. The program offers 100% financing, for no down payment. But there are other cost-reducing advantages of VA loans as well. Depending on the details of your transaction, you could also avoid mortgage insurance and reduce your out-of-pocket closing costs.
1. You could eliminate the need for a down payment.
This is probably the most well-known feature of the Washington State VA home loan program. Borrowers can finance 100% of the purchase price, in most cases.
For many home buyers, the down payment is the biggest obstacle to purchase. Some people have trouble saving up enough money for a down payment, even though they could easily manage their monthly payments. That’s the advantage of using a Washington VA loan to buy a house. It eliminates what is arguably the biggest hurdle for buyers — the down payment.
2. You could avoid having to pay mortgage insurance.
Borrowers who use FHA or conventional loans combined with a low down payment usually have to pay for mortgage insurance protection. These insurance policies protect lenders from losses resulting from borrower default. Home buyers who use the VA loan program can usually avoid this added expense.
In Washington State, VA home loans tend to have a lower rate of default and foreclosure, when compared to conventional mortgages. Additionally, these loans are partially guaranteed by the federal government. Because of this government backing, and the lower risk of foreclosure, Washington VA home loans usually do not require mortgage insurance. Chalk up another money-saving benefit.
3. You could potentially lower your closing costs.
Depending on the details of your transaction, a Washington VA loan could also reduce the amount you have to pay in closing costs. The Department of Veterans Affairs allows the seller to contribute money toward the buyer’s closing costs. This is known as a seller concession.
Additionally, you could agree to take on a slightly higher interest rate in exchange for a lender credit paid toward your closing costs. This could greatly reduce your out-of-pocket expense when buying a home in Washington with a VA loan.
Mortgage Rates Are Relatively High, as of Early 2024
Mortgage rates have been increasing over the past couple of years and reached as high as 7.79% in October 2023. But since then, rates have been slowly declining. For this reason, now might be a great time to buy a house in Washington with a VA loan.
At the beginning of 2024, the average rate for a 30-year fixed mortgage was 6.62%. That’s based on the weekly industry survey conducted by Freddie Mac.
Meanwhile, home prices across Washington State are expected to continue rising steadily into 2024. This is largely the result of strong demand and inventory shortages. With rates continuing to decrease, along with the prospect of rising home prices in the future, now could be a great time to make a home purchase.
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Sammamish Mortgage offers VA home loans to borrowers across Washington State. We are passionate about this program because it rewards our brave men and women in uniform. We also offer a variety of other mortgage programs to borrowers across WA, ID, OR, and CO, since 1992. Please contact us if you have questions about applying for a VA loan in Washington, or if you would like to receive a rate quote.