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How much is the typical down payment amount for a home purchase in Seattle? We’ve crunched the numbers to help you determine how much you need to secure a mortgage in 2021.
Unless you are qualified to take out a VA loan, a down payment will be required to secure a mortgage to buy a home in Seattle. The question is, how much of a down payment do you need to make for an average-price home in the city?
This is one of the most common questions among home buyers, especially in relatively high-priced housing markets like Seattle.
A down payment is required when you take out a mortgage to buy a home. It goes towards the purchase price of your home. The amount you must put down will depend on a variety of factors, including what you pay for the home and the type of mortgage you are taking out.
The higher your down payment amount, the less you will have to borrow. This places less risk on the lender, who may be willing to give you a lower interest rate as a result. In turn, this can save you a lot of money over the life of your loan.
But that doesn’t mean you have to sink in a lot of money on a down payment. Today, we’ll run some numbers to figure out what the typical down payment would be in Seattle, Washington for different loan types.
According to a recent analysis by ATTOM Data Solutions, the median down payment among home buyers in the U.S. is somewhere around 6.6% of the purchase price.
It’s possible to put down less than that. Some mortgage programs allow for down payments in the 3% range. For instance, the Conventional 97 program available from Fannie Mae and Freddie Mac allows for a 3% down payment. For many buyers, that’s even less expensive than the FHA loan option, which allows for a 3.5% down payment for those who qualify.
And for military folks, the VA allows for a zero down payment option, That means no down payment is required to take out a home loan to buy a home in Seattle or anywhere else in the US.
But we’re trying to determine the typical or average down payment in Seattle, so the 6.6% median figure is a good place to start.
Related: Low down payment mortgage loans
Down payment percentages are based on the home price. So, a more expensive property will result in a larger upfront investment, with all other things being equal. But for the sake of this analysis, let’s stick with the “median” theme for house values. At the end of the day, down payment mortgages Seattle can come in many amounts, depending on what you’re most comfortable with.
Clearly, there are a lot of variables that go into the mix. So, the closest we can come to an average down payment for a typical home purchase in Seattle is somewhere around $56,961 as of mid-2021. But some borrowers put down much less than that by using a mortgage program with a lower investment requirement.
Did you know it’s possible to use gift money from a family member or close friend to help cover your down payment expense? It’s true. Most of the major mortgage loan products available today allow borrowers to use funds gifted from an approved third party.
This kind of strategy is especially helpful in higher-priced real estate markets like Seattle, where a lot of buyers need down payment help to make a purchase.
In order to use gifted funds for a down payment, The lender will want to know some details before they let you use gifted funds for a down payment. You will likely need to prove that you have a relationship to the person giving you the money.
The lender may also require a paper trail to verify that the money is actually a gift and not coming from a nefarious source.
Another common question among Seattle home buyers is: Should I buy now or wait a while? What’s the best time to make a purchase?
As we’ve reported in the past, the latest forecasts for the Seattle-area real estate market predict that home prices will continue to rise over the coming months. And mortgage rates could inch upward as well, due to economic growth and policy adjustments made by the Federal Reserve (among other factors).
So those home buyers who postpone their purchases might end up encountering higher housing costs. If you get in the market early enough, you will be able to ride the wave of appreciation and take advantage of an increase in home equity. This is a great way to build wealth over time, and has long been a tried and true investment tactic.
Median and average down payment data are useful from a market analysis perspective. But they’re not as helpful for individual borrowers. At Sammamish Mortgage, can help you secure a mortgage program, as we have been doing since 1992 in Washington, Colorado, Idaho, and Oregon. We currently lend in all of Washington, Oregon, Idaho, and Colorado. Please contact us if you’d like to know what your down payment might be when buying a house.
If you’re thinking of buying a home in Colorado but aren’t sure about how much to put down, this blog post will help you make that decision.
Are you buying a home in the near future and require a mortgage to help finance it? If so, you’ll likely require a down payment in order to secure a home loan. The question is, what’s the average down payment for a house?