The 5 Most Common Loans for First Time Home Buyers in Washington State
Heritage Home Loans
Heritage Home Loans Spokane, WA
Published on October 28, 2022
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The 5 Most Common Loans for First Time Home Buyers in Washington State

5 Most Common Loans for First Time Home Buyers in Washington State

Buying your first house is an exciting and life-changing experience, but it can also be overwhelming. Review your options before making your choice. Below are the 5 most common loans for first time home buyers in Washington State.

You may be eligible for a loan that can help you buy your first home. Each loan has its own requirements and qualifications. You should consider your budget and the type of home you want to buy when deciding which mortgage program is best for you.

If you are buying a home in Washington State, consider:

FHA loans

FHA loans are a great option for first-time home buyers in Washington state who have might have lower credit scores. They allow you to buy a home with as little as 3.5% down payment (the minimum required by the FHA), although you’ll need to pay mortgage insurance on all loans regardless of your down payment amount. This means that your monthly mortgage payments will be higher than they would be if you had a larger down payment or used conventional financing, but it can help you secure a loan when other lenders won’t take the risk because of your credit score.

VA loans

The VA Loan is a home loan program that’s available to veterans, service members, and surviving spouses. A VA loan allows a borrower to purchase a home with no down payment. This benefit extends to veterans who were dishonorably discharged and can be used for both new construction and existing homes.

VA loans also have no monthly mortgage insurance payments associated with them. In addition, the VA guarantees up to 100% of the total amount of your mortgage including principal and interest as long as you meet eligibility requirements.

The VA loan is a great option for veterans who want to buy a home but don’t have enough money for a down payment. It’s especially helpful for those who are still on active duty, as the VA does not require that you be discharged in order to qualify for this benefit.

USDA loans

USDA loans are government-backed home loans that are available to people who live in rural areas. They’re often called Rural Housing Loans, but they’re also known as Guaranteed USDA Loans or Direct Rural Housing Loans.

USDA loans have a zero down payment requirement and an easy credit qualification process.

The downside? The USDA loan program has a set of income limits that determine whether you can qualify for a mortgage. These limits apply to your household’s total annual income, not just your own earnings. The USDA sets these limits on a state-by-state basis, so be sure to check with your lender or realtor for details on what those figures are in your area.

Conventional loans

Conventional loans are just like any other loan, except that they’re issued by Fannie Mae and Freddie Mac and not insured by the government, like an FHA or VA loan. That means that you can get approved for a larger purchase price than you could with some of the government-backed options

Conventional loans also require borrowers to pay PMI (private mortgage insurance) until they reach 20% equity in the home. This means that if your down payment is less than 20%, you’ll have to pay for private mortgage insurance until you’ve built up enough equity in your home.

The minimum down payment for a first-time home buyer can be as low as 3 percent on a conventional loan.

The average first-time home buyer has about $40,000 saved for their down payment and closing costs. The minimum income requirement is $50,000 per year.

Down Payment Assistance Programs in Washington State

Down payment assistance programs are one of the most popular options, especially for first-time homebuyers. The state offers assistance with down payments as part of the Washington State Housing Finance Commission (WSHFC) program. The WSHFC provides assistance in the form of grants and loans that can be used for down payments and closing costs. To qualify, you must meet income limits and other requirements.

There are also private resources such as Local non-profit organizations and several lenders with options that may work better for you and your home-buying goals.

Conclusion

Hopefully, this article has helped you understand the different loan options available to first-time homebuyers in Washington State. The most important thing is that you do your research and find the best one for your needs. You can learn more about each type of loan by calling us directly at (509)991-3493

Heritage Home Loans
Heritage Home Loans Spokane, WA
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