Are you a first-time home buyer in Washington State? If so, you probably have a lot of questions about which mortgage option is best for first-time buyers like yourself.
The loan you choose when buying a home should match your financial priorities and your long-term plans. Those are the two most important factors to consider when deciding which type of loan is right for you.
Let’s take a look at some of the best mortgage options for first-time home buyers in Washington State:
Best Mortgage Options for First-Time Buyers in Washington
You might want to start by reading our guide to the different types of mortgage loans available to Washington State home buyers. That in-depth tutorial explains the pros and cons of different financing options.
To decide which mortgage is best for you, you’ll need to identify your top priorities. For instance, if your number-one goal is to minimize your monthly payments, you might consider using a 30-year mortgage loan. This will spread your payments out over a longer period of time, thereby reducing their size. That’s just one example of choosing the right mortgage option for your particular situation and objectives.
There is no one mortgage loan that’s best for all first-time home buyers in Washington State. But there are some popular options you should know about. Here are five home loan options to consider:
5/1 ARM — This type of home loan starts off with a fixed interest rate for the first five years, after which the rate will adjust every year. That’s what the “5/1” signifies. The 5/1 ARM is a “hybrid” adjustable-rate mortgage that combines qualities of a fixed and adjustable loan. It’s a popular choice for first-time home buyers in Washington State who are trying to minimize their monthly payments for the first few years (maybe because they plan to move again or refinance in a few years). ARM loans typically start off with lower rates than their traditional fixed-rate counterparts.
30-Year Fixed — This is the go-to mortgage option for a lot of first-time buyers in Washington. In fact, it’s the most commonly used of all the home loan options. As its name suggests, the 30-year fixed-rate mortgage carries the same interest rate for the entire 30-year repayment term. This makes it a good choice for first-time home buyers who are planning a long stay and want their payments to stay the same over the long term.
FHA Loans — The Federal Housing Administration (FHA) loan program has been helping home buyers purchase houses since the 1930s. It can be a good option for first-time buyers in Washington State, and for a couple of reasons. It offers a relatively low down payment of 3.5%, and those funds can be gifted from a family member, friend, or other approved donor. Secondly, the qualification requirements for FHA loans can be a bit more “forgiving” than conventional financing, because the federal government insures them.
VA Loans — If you’re a member of the military, or a veteran, you should take a close look at the VA loan program. This is one of the best options for borrowers who currently serve, or have previously served, in the U.S. military. Through this program, first-time home buyers in Washington State can buy a house with no down payment whatsoever. Here’s an overview of VA eligibility requirements.
These are certainly not the only mortgage options for first-time buyers. But they’re a good starting point for your continued research. Consider the pros and cons of the different loan options that are available, and choose one that meets your individual needs.