Need a mortgage loan to buy a house in Camas, Washougal, Vancouver, or any other area in SW Washington? There are a few mortgage options you may qualify for. Although home sellers often prefer cash offers or conventional loan financing, FHA, VA, USDA, 203K rehab, or Washington bond loans may also be accepted. A lot of people put off buying their first home, thinking they can never save enough for a large downpayment. While conventional mortgage loans require a large downpayment, there are other financing options in Washington, some of which don’t require a downpayment at all. Since pre-approval is one of the first steps in buying a house, lets look at some of the mortgage options available in SW Washington.
If you can afford to put at least 20 percent down on a home purchase, you may be able to get a conventional loan with no mortgage insurance. The minimum credit score required for a conventional loan is around 650. If you can’t save enough for 20 percent down you can apply for a loan with 10 percent or more downpayment, although this requires paying for private mortgage insurance. Private mortage insurance, or PMI, is insurance to protect the lender in the case of a default on the loan. It can be removed from the loan by paying down the mortgage until you only owe 80 percent of the purchase price or the appraisal price, whichever is lower. There are other ways to remove PMI before you have more of the mortgage paid down, but depending on the interest rate when you close on your house you might not save on your monthly mortgage payments.
If you already own a home you likely have some equity built up that can help with your downpayment. You can write an offer with a contingency to sell your house, or you can sell your house with a longer than normal closing time and write an offer on your new home with a contingency on your house sale closing. The second is more likely to be accepted by the seller of your new home, as it means you already have an offer accepted on your house sale and the deal is more likely to close on time. There are some tricks and negotiation techniques a good local realtor can use to help you get an offer accepted, even in a seller’s market.
Conventional loans have less strict requirements than other types of mortgages when it comes to the condition of the house. As far as home sellers are concerned, cash offers and conventional offers are usually more desireable. With some other loans there are requirements for brush being cut back from the foundation of the house, or bushes being cut back from the siding of the house, among other requirements. What might seem like minor things to most people may cause issues with getting an appraisal for some types of loans. The more expensive houses become in an area, the harder it is for many locals to save enough to be able to get a conventional loan. Thankfully, there are other mortgage options available.
FHA loans only require a 3.5 percent downpayment, and have a minimum credit score requirement of 580. Don’t have enough of a downpayment saved for a conventional loan, and less than stellar credit? An FHA loan might be the best option for you. FHA loans require mortgage insurance for the life of the loan, although you may be able to refinance into a conventional loan down the road to get rid of the mortgage insurance. In addition to requiring mortgage insurance, FHA loans have more strict guidelines for the conidition of the home being purchased. If there are too many issues for an FHA appraisal, you might consider a rehab loan.
Rehab loan, FHA 203(K):
Although it is a form of an FHA loan, an FHA 203K rehab loan is designed to allow remodeling to be financed into the same loan as the house purchase. It requires an approved contractor, inspector, or architect to provide quotes to determine the home value before and after the repairs. There is a limited 203K option that has a cap of $35,000 for renovations, but can’t include a major remodel, structural repairs, or additions. There is also a full 203K option that doesn’t have the same cap, but the interest rates are a little higher. If you are pre-approved for an FHA but find a home that needs some updating an FHA 203K rehab loan might be the answer you are looking for.
If you have served in any branch of the military you may be eligible for a VA loan. The Department of Veterans Affairs sets requirements and you will need a certificate of eligibility before closing, although you can apply through a VA approved lender. The mortgage loan doesn’t require any money down or mortgage insurance, unlike an FHA loan. VA loans do have stricter requirements for the condition of the home than conventional loans, as they don’t want any unexpected repairs after the house closes. VA loans for single family homes have no maximum income requirements, and you can use one to buy a house in Camas, Washougal, Vancouver, or anywhere else in SW Washington.
Need a zero down mortgage loan in SW Washington? You may qualify for a USDA loan, also referred to as a USDA rural development loan. Although the guidelines are set by the United States Department of Agriculture, these loans are actually meant for purchasing a single family home in rural areas. The maps are periodically updated, but as of 2018 Washougal and some other areas near Vancouver, WA are regions that qualify for USDA loans. There are maximum income requirements, based on percentage of the median income for the region. It’s one of the few loans available to buyers who don’t have enough money saved for other types of mortgage loans.
Washington Bond Loan:
Washington Bond loans offer downpayment assistance of up to 4 percent of the mortgage. Similar to an FHA loan, but Washington state pays for your downpayment. Washington Bond loans require a 5 hour home buyers class, and have maximum income requirements. Although USDA loans only work in certain areas deemed rural, Washington Bond loans don’t have the same restriction. You can get a mortgage loan to buy a house in Camas, Washougal, Vancouver, or any other area in SW Washington.
How much home can you afford to buy? I can refer you to some great mortgage lenders in my area to help you purchase a home in Camas, Washougal, Vancouver, or anywhere else in SW Washington. Why not get pre-approved this week to start seeing houses near you?
Call, text, or email your local Camas Washougal realtor to start looking at real estate now! If you’re not quite ready to buy a house, I recommend bookmarking this website or or copying my information for future use. Help me help you!