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Are you planning to buy a house in Washington State in 2023? Will you be using a mortgage loan to finance your purchase?
If so, there are a few general requirements you should know about, before you start shopping for a home.
Buying a house is a big investment that typically requires the help of a mortgage to finance such a large purchase. But in order to secure a home loan, you will need to get approved for one and meet specific requirements.
So, what are these requirements? Let’s find out.
Depending on the type of home loan you are using to buy a house, your down payment might range from 3% to 20% of the purchase price, but don’t worry, usually it’s not the whole amount thanks to government loan programs and down payment assistance.
Borrowers who are eligible for a VA-guaranteed home loan can qualify for 100% financing, which means they don’t have to make a down payment at all. The FHA home loan program, which is popular among first-time buyers, requires a minimum down payment of 3.5%.
These days, many loan programs allow down payment assistance in the form of gifts from family, friends, employers, and other approved donors. So it’s possible to buy a home with some of the funds provided by a third party. This is a great option for borrowers who don’t have a lot of money saved for a down payment.
There are also plenty of great down payment assistance programs in Washington, many geared for first-time homebuyers. Payment assistance programs typically require a certain maximum income level, and a certain minimum credit score. You may only be able to get payment assistance for homes within a certain geographical area, or below a certain market value.
The down payment is one of the key requirements to buying a home in Washington State, so we have covered it in depth in a separate article.
Related: Average Down Payment on a House
Credit scores are another key requirement when using a mortgage loan to buy a home in Washington State. Your credit score is a three-digit number that’s computed from the information within your credit reports.
If you’re the kind of person who pays bills on time and uses credit responsibly, you’ll probably have a relatively high score. Consumers with a history of late payments and delinquencies tend to have lower credit scores.
Credit score requirements to buy a home in Washington state vary from one lender to the next. Generally speaking, a credit score in the low 600s will enable you to qualify for a home, but credit scores over 700 usually get you better terms.
The higher your score, the better your chances of getting approved for a loan. A higher score also increases your chances of qualifying for a low mortgage rate.
The home appraisal is another important requirement to buy a house in Washington State, when a mortgage loan is being used. Your mortgage lender will want to make sure the house you are purchasing is worth the amount you have agreed to pay for it.
They will call in a licensed home appraiser to determine the current market value of the property. If the appraiser determines the house is worth at least as much as the purchase price, you shouldn’t have any problems.
But if the appraisal “comes in low” — meaning the home appraised for less than the agreed-upon purchase price — you might have to renegotiate with the seller so that your financing can go through.
Most home buyers in Washington State have to pay closing costs, though the amount paid can vary depending on several factors. “Closing costs” is a collective term that describes the various fees and charges you will encounter during the mortgage and home buying process.
On average, closing costs range from 2% to 5% of the purchase price. We have options that help limit the closing costs you pay at closing.
Closing costs are another important requirement when buying a house in Washington State. So we have created a separate article to cover this subject in detail.
Related: Average Closing Costs for Home Buyers
These are not the only requirements to buy a home in Washington State. But they are some of the most important. Depending on the type of home loan you are using, you might encounter additional requirements that are not mentioned above.
For example, if you make a down payment below 20%, thereby putting your loan-to-value ratio above 80%, you’ll probably be required to pay mortgage insurance. But that’s a subject for another day.
Do you need a mortgage loan to buy a house in Washington State? If so, we can help. Sammamish Mortgage has been serving home buyers across the Pacific Northwest since 1992, including those in Washington state, Idaho, Colorado, and Oregon. We offer a wide variety of loan programs and products with flexible criteria and competitive rates. We can help you get pre-approved for a mortgage loan before you start shopping for a house, which will improve your chance for success. Get in touch with us today!
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.