Summary: How much do you need to come up with in the form of a down payment to secure a mortgage for a home purchase in Seattle? Read on to find out more.
The average down payment in Seattle fluctuates based largely on the median sale prices of homes. As of the fourth quarter of 2019, the median down payment in Seattle Washington is 13.6% of the purchase price of a home. Based on the fact that homes in Seattle are now valued at $714,100, according to Zillow, that would equate to a down payment of $97,117.
But don’t be discouraged by that figure. It’s possible to buy a house or condo with less of an upfront investment.
Median Down Payment Among Seattle Home Buyers
Overall, the prices of homes in Seattle seem to be on their way down. Over the past year, median home values in Seattle decreased 4.3%, according to Zillow, and the real estate database expects further declines in home values by another 3.6% over the next year.
That means that not only does now make a potentially good time to buy, it also means you may be able to put a smaller down payment towards your home purchase.
Median and average down payments are directly related to home prices. So it’s natural to see a comparatively higher figure for the Seattle metro area, where house values are generally higher than the rest of the state.
As of August 2019, the median home value in the Seattle area was around $714,100. It’s much lower in most other major cities across the state. That said, prices are already on their way down, which means down payment amounts may decrease right along with them.
How to Minimize Your Upfront Investment
Home buyers who can’t afford these average or median down payment amounts should not despair. These figures might be useful for comparing housing costs from one area to the next. But they do not represent the minimum down payment required for different mortgage programs. Those minimums tend to be lower than the median.
- The FHA loan program allows eligible borrowers (with credit scores of 580 or higher) to make a down payment as low as 3.5% of the purchase price or appraised value.
- Similarly, some conventional home loans allow borrowers to put down as little as 3% when buying a house.
- And then there’s the VA program, which lets home buyers finance 100% of the purchase price.
There are also some common misconceptions regarding the 20% down payment. Surveys over the last couple of years have shown that many renters and prospective buyers believe they have to put down at least 20% to buy a home.
But, as we’ve just shown, that’s not always the case. There are many financing options available with a lower upfront investment for eligible borrowers.
Related: Buyers are putting less money down
The 20% figure usually relates to mortgage insurance. It’s true that a lot of home buyers choose to put down 20% or more, but they usually do it in order to avoid paying mortgage insurance. This insurance is typically required whenever the loan-to-value ratio rises above 80%.
Disclaimer: This article uses down payment data provided by third-party sources not associated with our company. We have presented it here as an educational service to our blog readers.