A Look at Washington State Mortgage Requirements in 2017

Do you have questions about mortgage loan qualification requirements in Washington State? You’ve come to the right place. Below, you can learn about some of the basic requirements for getting a home loan in Washington State. This information has been updated to include current lending trends and standards for 2017.

Note: This is an overview of Washington mortgage requirements, and as such it doesn’t cover everything. If you have a question that is not answered below, please contact us.

Basic Mortgage Requirements in Washington State, 2017

“Am I qualified to get a mortgage loan in Washington in 2017?”

This is one of the most frequently asked questions among home buyers and mortgage shoppers in Washington State (at least those who need financing). It’s also a highly individualized question that can’t really be answered in a blog post.

With that being said, we can offer some generalized mortgage qualification requirements for Washington home buyers and borrowers.

At a glance: If you have a decent credit score (ideally 600 or higher), a manageable level of monthly debt, and a steady income stream that will enable you to repay your loan obligation, you might be qualified for a mortgage in Washington State.

Current mortgage requirements and regulations place a lot of emphasis on a borrower’s ability to repay the loan — and rightfully so. A prudent mortgage lender in Washington State will look at your recurring monthly debts in relation to your income, to make sure you’re not taking on too much debt.

Credit Scores and Home Loans

Consumer credit scores are another important mortgage requirement. They can affect your ability to qualify for financing, and they can also influence the interest rate you receive on your loan.

A credit score is a three-digit number that’s computed from information found within your credit reports. Mortgage lenders use these scores to gain insight into how you have borrowed and repaid money in the past. So they’re a fairly important mortgage requirement for Washington State mortgage shoppers and home buyers.

Generally speaking, a higher score will increase your chances of qualifying for a mortgage loan. A low score could potentially hurt your chances of being approved for financing. But you shouldn’t be discouraged if your score is less than perfect. Some Washington State mortgage loan programs, including the FHA program, offer flexible qualification criteria.

FICO scores (which are widely used in the lending industry) range from 300 to 850. A score of 600 or above will put you in a pretty good position to qualify for a home loan, if you’re eligible in other areas as well. A 700 or higher will make it even easier to get approved, and could help you qualify for a lower mortgage rate. If you’re in the “800-and-up” club, you should have no trouble qualifying for a mortgage loan in Washington State.

But bear in mind these are just general guidelines.

Debt and Income Requirements for Borrowers

Debt-to-income ratios are another commonly used mortgage requirement in Washington State. These ratios help lenders ensure that you’re not taking on too much debt, and that you have the financial capacity to repay your loan. In short, your monthly income must be sufficient to cover all of your recurring debts — including your estimated mortgage payments.

As you might have guessed, the debt-to-income (DTI) ratio compares a borrower’s debts and income. Example: A person who grosses $4,000 per month, and spends $1,500 on total monthly debts, would have a DTI ratio of 37.5% (because 1500 / 4000 = .375, or 37.5%).

This mortgage requirement tends to vary. Banks and lenders have different standards. Generally speaking, a total or “back-end” DTI ratio in the mid 40% range or lower will put you in a pretty good position to qualify for a mortgage loan in Washington State. If your debt ratio is much higher than this, it could present a problem.

But again, these numbers are not set in stone. Exceptions can be made for borrowers with significant cash reserves, strong credit histories, and other compensating factors. The mortgage lending process is highly individualized. Every financing scenario is different, because every borrower is different.

Have questions? Sammamish Mortgage offers a variety of loan products for home buyers and homeowners in Washington State, including FHA, VA and conventional. We can answer any questions you have about qualifying for a mortgage. We can also give you a rate quote based on the type of loan you need. Just call (800) 304-6803, or send an email to loan@sammtg.com.