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Best Washington Mortgage Lenders for First-Time Homebuyers

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.

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The Best Mortgage Lenders in Washington are:

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
  • Medina
  • Mercer Island

3 most affordable cities in Washington to buy a house:

  • Hoquiam
  • Connell
  • Ephrata

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.
LenderMinimum Credit Score Required
Quicken Loans620
Keller Mortgage600
Guaranteed Rate620
Caliber Home Loans620
Wells Fargo620

Mortgage Options

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.

Loan TypeCurrent Mortgage Rate
30-year fixed3.70%
15-year fixed3.21%
5/1 ARM (adjustable rate)4.11%

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!

LenderAverage Days to Close Loan
Quicken Loans30
Keller Mortgage30
Guaranteed Rate30
Caliber Home Loans45
Wells Fargo90

6 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 Overall: Quicken Loans

Quicken Loans 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.

2. Best for Low Credit Score: Keller Mortgage

Compared to other mortgage lenders, Keller Mortgage has one of the most reasonable minimum credit score requirements.

We recommend working with a Keller Mortgage agent so you can participate in its ZeroPlus program.

This program offers no origination or lender fees, low mortgage rates and $1,000 to go toward your 3rd party costs at closing. 

3. 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.

4. 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. 

5. 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. 

6. Luxury Mortgage: Best for Self-Employed

Luxury 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. Luxury 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. Luxury Mortgage can also help you get approved on assets alone, like your bank statements, stocks and bonds, or retirement accounts.

Next Steps

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?

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1) Q: How do I get pre-approved?
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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!

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2) Q: How much interest will I pay?

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2) Q: How much interest will I pay?
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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.

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3) Q: How much should I save for a down payment?

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3) Q: How much should I save for a down payment?
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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.

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