There are compelling reasons to choose short-term mortgages and long-term loans. Nevertheless, the best way to decide is to consult with a WA State home finance and real estate professional.
Summary: Pierce County usually sees VA loan limit increases every year in response to rising home prices. This is no longer the case.
Pierce County, Washington is often one of the top ten counties in the U.S. for VA loan volume. That means there are a lot of folks in the area who are using this particular mortgage program to buy a house. So, we thought it would be helpful to share some VA loan information that is specific to Pierce County.
VA Loan Limits for Pierce County: Done Away With
Technically speaking, the VA does not put a cap or limit on how much you can borrow for a mortgage loan. That’s generally left up to the mortgage lender. But they do limit the “amount a qualified Veteran with full entitlement may be able to borrow without making a down payment,” according to the department’s website.
Translation: If you wanted to use a VA loan to finance 100% of a home purchase (with no down payment), you would probably have to stay within the loan limits for the county where you are buying.
But with a new law recently passed, VA loan limits are no longer applicable to veterans0. More specifically, the Blue Water Navy Vietnam Veterans Act of 2019 that became law states that some restrictions on VA home limits will be removed, including loan limits for those who are eligible.
That means that qualified veterans now have no cap on the loan amount they wish to take out without having to put forth a down payment. This gives borrowers more purchasing power because it allows them to buy homes that are more expensive than what previous loan limits allowed with no down payment. Veterans who are looking to buy a home in a pricier market will have more flexibility.
VA loan limits for Pierce County, Washington applied to the entire Seattle metro area, including King and Snohomish counties as well. The amount is based on limits that the FHA sets every year.
Veterans were always able to borrow more than the loan limit set for their location each year. But these “jumbo” loans meant that a down payment was required. Thanks to the elimination of these loan limits for VA loans, veterans who qualify are able to exceed these limits while still taking advantage of a zero down payment option.
The idea of buying a home in Pierce County with no money down is what attracts most borrowers to the VA loan program in the first place. And with the repeal of VA loan limits, the typical home buyer can buy a more expensive home and still avoid having to make a down payment.
Important note: While veterans who qualify for VA loans may no longer be subject to loan limits in 2021, those who have more than one active VA home loan or who have previously defaulted on a VA loan may still be subject to loan limits in terms of whether or not a down payment is required.
Home Price Update for Winter 2020/2021
Prices in Pierce County tend to be lower than in neighboring King County. This means that home buyers who want to buy in Pierce County will find much lower home prices.
As of December 2020, the median home value in Pierce County was around $422,400 (source: Zillow). That’s quite a bit lower than the prices in King County, which currently $688,500.
In theory, using a VA loan in Pierce County should give a buyer plenty of options. But the current reality of the local real estate market is that there’s a shortage of available inventory. This is true for most cities across the state of Washington. It’s a trend that has defined these markets over recent years.
Overview of the Mortgage & Buying Process
The process for buying a home with a VA loan is similar to any other mortgage program. There’s some additional paperwork needed on the front end, such as the Certificate of Eligibility (COE). But the rest of the process if fairly straightforward.
We’ve covered the VA home buying process in a separate blog post. Here’s a quick overview of the steps:
- Determine that you meet the basic eligibility requirements.
- Obtain your Certificate of Eligibility from the VA.
- Get pre-approved for a certain mortgage amount.
- Begin searching for a home that meets your needs.
- Make an offer to buy the property.
- Go back to your loan officer with a signed purchase agreement.
After that, the home will be appraised to ensure that the market value reflects the loan amount. Then you would move through the underwriting process and on to the closing.
Interested in a Home Loan in Pierce County?
If you’re looking to apply for a home loan in Pierce County, Sammamish Mortgage everything you need to make your dreams of homeownership happen. We are a family-run mortgage company that has worked with borrowers in Washington, Oregon, Colorado, and Idaho since 1992. We offer different mortgage programs to borrowers all across the Pacific Northwest region. Contact us today if you have questions about applying for a mortgage.