Are you a first time homebuyer in Washington State? Before moving forward with your mortgage process, it’s important to understand the variety of mortgage types and programs available to you from the best mortgage companies. Let’s get started.
- 9 Best Mortgage Lenders in Washington for First Time Buyers
- 1. Best for Bank Statement Loans: Angel Oak Mortgage Solutions
- 2. Best for Online Loans: Rocket Mortgage®
- 3. CrossCountry Mortgage: Best for Self-Employed
- 4. Best for FHA Loans: guaranteed Rate
- 5. Best for Mortgage Programs: Caliber Home Loans
- 6. Best for In-Bank Support: Wells Fargo
- 7. Veterans United: Best for VA Loans
- 1. Best for Bank Statement Loans: Angel Oak Mortgage Solutions
- The Housing Market in Washington: An Overview
- Preparing for a Mortgage
- Mortgage Options
- First Time Home Buyer Programs in Washington
- Current Mortgage Rates in Washington
- Closing a Mortgage
- Next Steps
- Frequently Asked Questions
9 Best Mortgage Lenders in Washington for First Time Buyers
Washington State has plenty of mortgage lenders to choose from. Here are our picks of mortgage lenders for first time buyers:
1. Best for Bank Statement Loans: Angel Oak Mortgage Solutions
Angel Oak Mortgage Solutions is a full-service mortgage lender offering traditional and portfolio mortgage loans. Among their many customized loan solutions is their Bank Statement product for self-employed borrowers in Washington. This loan does not require tax returns and includes a 1099 Income option for 1099 earners.
- Loan amounts up to $3 million
- 12 or 24 months personal or business bank statements
- Two years out of bankruptcy, short sale, foreclosure, or deed-in-lieu
- Owner occupied, non-owner occupied, second homes physically in Washington
- 1099 option available
- 40-year fixed interest only
- Delayed financing available
- Non-warrantable condos allowed
Angel Oak Mortgage Solutions offers a wide range of loan options allowing you to obtain any mortgage as long as qualification requirements are met. Washington residents can also refinance into any of these loans after their initial purchase. The customer service team is easy to reach via email, phone or the online contact form, and you can begin your journey by searching for a local advisor right on the website.
Angel Oak is headquartered in Atlanta, Georgia and is licensed in AL, AZ #0927070, licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act, CO, CT, DE, DC, FL, GA #32379, ID, IL, IN, IA, KS, KY, LA, ME, MD, MI, MN, MS, NV, NH, licensed by the N.J. Department of Banking and Insurance, NM, NC, OH, OK, OR, PA, Rhode Island Licensed Lender, SC, TN, TX, UT, VT, VA, WA dba AOHL LLC, WI.
2. Best for Online Loans: Rocket Mortgage®
Rocket Mortgage is great for first time buyers, It offers an intuitive and easy online application process for quick preapprovals.
The Quicken Loans® website also offers resources such as mortgage loan calculators to help you sort through mortgage options.
If you have questions, Quicken Loans® has a highly reputated customer support team to assist you.
3. CrossCountry Mortgage: Best for Self-Employed
CrossCountry Mortgage makes it easy for all types of home buyers to get approved for a mortgage. Their flexible requirements can help you get financing, with no employment or income verification and no minimum DTI. CrossCountry Mortgage offers traditional loan terms, as well as more flexible home payment plans with their 40-year loan program.
It's also easier to get approved if you're self-employed. Tax returns are not required and you'll only need one year of self-employment income history and a minimum credit score of 580. CrossCountry Mortgage can also help you get approved on assets alone, like your bank statements, stocks and bonds, or retirement accounts.
4. Best for FHA Loans: guaranteed Rate
guaranteed Rate also offers intuitive online tools for you to use as you navigate the mortgage process.
If you’re looking at lenders for an FHA loan, we highly recommend getting a purchase quote from guaranteed Rate.
Its low rates combined with a minimum down payment of 3.5% makes this a great lender for first time buyers looking to save.
5. Best for Mortgage Programs: Caliber Home Loans
Caliber Home Loans offers loan programs to lessen the financial burden on buyers.
These programs can offer down payments as low as 3% and temporary buydowns to reduce your mortgage rate for the first 1–2 years.
With Caliber Home Loans, you may also be eligible for a secondary loan that is either Washington State or county specific.
6. Best for In-Bank Support: Wells Fargo
Wells Fargo offers the best of both worlds when it comes to mortgage lending. Like its competitors, Wells Fargo offers an online preapproval process and resources to help you throughout the mortgage process.
Wells Fargo also offers the benefit of being a brick-and-mortar bank. If you’re a customer, you will already be familiar with its customer service.
If not, you will still have the opportunity to visit one of its many locations across the state to speak to someone in person about your mortgage options.
7. Veterans United: Best for VA Loans
If you’ve logged some time in the military, Veterans United’s loans will likely be the best deal. Unlike other veteran-marketed loan programs, Veterans United only accepts active duty and veteran military members.
In addition to no-down-payment loans, you’ll also eliminate the private mortgage insurance you’ll have to pay with other mortgages.
Veterans United is also more forgiving of lower credit scores. Interest rates are lower than average.
The Housing Market in Washington: An Overview
The housing market in Washington overall is hot, meaning home values are on the rise. Here’s a look at some of the 2019 data:
Total households: 2,271,398
Median list price: $340,000
3 most expensive cities in Washington to buy a house:
- Clyde Hill
- Mercer Island
3 most affordable cities in Washington to buy a house:
Preparing for a Mortgage
Purchasing a home is one of the biggest financial decisions you can make. Before you take the leap, be sure to prepare as much as possible for the mortgage process.
First, you’ll want to get a purchase quote. These quotes use basic information about where you are planning to buy a home to put together a quote for you. You’ll input the estimated cost of the home you want to purchase, how much you plan to spend on a down payment and your estimated credit ranking. You can also get a refinance quote if you’re curious about that process.
Your credit score is a crucial factor in the mortgage process. Lenders pull credit reports on all potential borrowers to ensure that their borrowers are financially responsible. They want to see that you make payments on time and have a positive credit history.
Your credit score is used by lenders to determine your mortgage rate and approval. If you have a higher credit score, lenders may offer you a lower mortgage rate. This could save you thousands of dollars over the lifetime of your loan.
Once you’ve received your quotes, you are ready to be preapproved for a mortgage. A preapproval letter from a lender shows sellers that you are serious about making a purchase decision. It also helps you, the seller and your real estate agent understand what you can afford. Most lenders offer quick online preapprovals.
When applying for a mortgage, you’ll need to supply several documents. It’s a good idea to get these documents together now so you’re ready when it’s time to submit them:
- Proof of assets: Your assets can be anything from your checking and savings accounts to your owned vehicles. This information helps lenders get a better idea of your financial situation. They will want to know that you have assets that can be used if you lose your income and need help paying off your mortgage in the future.
- Tax documents: To prove your income, you should expect to provide at least 2 years of tax documents, including your pay stubs, copies of your W-2 forms and completed tax returns. If you owe any other debts, you should also expect to provide information about them. Lenders use this information to understand your debt-to-income ratio.
- Other financial agreements: There are situations where other documents may be required. If you pay or receive alimony or child support, you will need to provide the court order stating this. If there is any judgement made for or against you that affects your money, expect to provide information about it.
There are several mortgage types available to you. Loan officers can help you walk through the options to select the best mortgage type for you.
Conventional: A conventional mortgage is most often the standard mortgage type. These mortgages are offered directly from lenders and usually have fewer eligibility requirements. The loan terms of conventional loans vary, but the most common repayment periods are 15 and 30 years.
FHA: FHA loans are offered by the Federal Housing Administration. This mortgage type might be a good option for you if you would like to make a down payment of less than 20%. Because these mortgages are backed by the federal government, they do have certain eligibility requirements.
USDA: If you are buying a home in a rural area, a USDA mortgage may work for you. These loans are offered by the U.S. Department of Agriculture for use on properties bought as primary residences only. The eligibility requirements for USDA mortgages include a household income threshold and a qualifying rural location.
VA: VA mortgages are offered by the U.S. Department of Veterans Affairs to help military members achieve homeownership. The benefit of VA loans includes the ability to finance 100% of your home purchase instead of making a down payment. To qualify for a VA loan, you must have served as an active military member or for the National Guard or Reserves for a qualifying period of time.
Jumbo: This loan is an option to look into if you’re buying in a very competitive market. They may only be used on homes that are priced above the limit set by the Federal Finance Housing Agency. You can expect lenders of jumbo loans to require higher incomes and credit scores from you to get approved.
First Time Home Buyer Programs in Washington
Luckily, first time buyers are eligible for certain programs in Washington State. These programs may help you save money on your mortgage, receive down payment assistance and more.
Home Advantage first mortgage program: If you’re looking to finance the bulk of your home’s price, this program could help you. With this program, you may be able to finance up to 97% of your home’s appraised value or purchase price. To qualify, you will need to meet a 45% debt-to-income ratio as well as an income limit set by the Washington State Housing Finance Commission.
House Key Opportunity first mortgage program: This unique program creates below-market-rate mortgage loans for first time buyers. Flexible underwriting standards for this program can help you qualify for a larger mortgage than you would otherwise. To qualify for the program, you must be a first time buyer and meet the income limits set by Washington State Housing Finance Commission.
Current Mortgage Rates in Washington
Before selecting your mortgage term and type, it’s important to understand mortgage rates. Mortgage rates fluctuate on a regular basis depending on the economy and housing market. Some people prefer to stick with fixed-rate mortgages because they do not have to worry about mortgage rate fluctuations during their repayment period.
If the economy is doing well, people are more likely to buy homes. If more people are buying homes, there is more competition for mortgages. In this situation, you can expect mortgage rates to be higher. If the housing market is slow, there is less competition for mortgages and you may be able to find a lower mortgage rate.
The information in this chart is updated regularly by Benzinga to reflect the most recent data.
Closing a Mortgage
Once you’ve selected your new home, you will need to go through the closing process. After your offer is accepted, you and the seller will enter a negotiation phase. This is when you will confirm the condition of the home and finalize your financing. You will also need to arrange a home inspection and appraisal during this time.
Finally, you will decide on a closing date. Before the closing date, perform a final walk-through of the home to ensure that it is in the agreed-upon condition. On your closing date, the house officially becomes yours and you can move in!
With this information, you should be better prepared to buy your first home in Washington. Here are a few questions to ask yourself next before moving forward:
- What is important to me in a lender?
- What are the most important factors to consider? Most weigh the location, school district and number of bedrooms of a home.
- How much home can I really afford? Take a hard look at your finances and be sure you can commit to your mortgage payment for years to come.
Answering these questions can help you narrow down your options and focus on finding the right home for you. Happy house hunting!
Frequently Asked Questions
1) Q: How do I get pre-approved?
First, you need to fill out an application and submit it to the lender of your choice. For the application you need 2 previous years of tax returns including your W-2’s, your pay stub for past month, 2 months worth of bank statements and the lender will run your credit report. Once the application is submitted and processed it takes anywhere from 2-7 days to be approved or denied. Check out our top lenders and lock in your rate today!
2) Q: How much interest will I pay?
Interest that you will pay is based on the interest rate that you received at the time of loan origination, how much you borrowed and the term of the loan. If you borrow $208,800 at 3.62% then over the course of a 30-year loan you will pay $133,793.14 in interest, assuming you make the monthly payment of $951.65. For a purchase mortgage rate get a quote here. If you are looking to refinance you can get started quickly here.
3) Q: How much should I save for a down payment?
Most lenders will recommend that you save at least 20% of the cost of the home for a down payment. It is wise to save at least 20% because the more you put down, the lower your monthly payment will be and ultimately you will save on interest costs as well. In the event that you are unable to save 20% there are several home buyer programs and assistance, especially for first time buyers. Check out the lenders that specialize in making the home buying experience a breeze.
Get Ready for Take Off
Rocket Mortgage® is an online mortgage experience developed by the firm formerly known as Quicken Loans®, America’s largest mortgage lender. Rocket Mortgage® makes it easy to get a mortgage — you just tell the company about yourself, your home, your finances and Rocket Mortgage® gives you real interest rates and numbers. You can use Rocket Mortgage® to get approved, ask questions about your mortgage, manage your payments and more.
You can work at your own pace and someone is always there to answer your questions — 24 hours a day, 7 days a week. Want a fast, convenient way to get a mortgage? Give Rocket Mortgage® a try.