Best Mortgage Lenders for First Time Home Buyers in Washington

Did you know most of our readers prefer Rocket Mortgage for their mortgage needs?

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.

Quick Look: Best Mortgage Lenders for First Time Home Buyers in WA

• Best for Online Loans: Rocket Mortgage®
• Best for Self-Employed: CrossCountry Mortgage
• Best for Comparing Rates: Credible Mortgage
• Best for Comparing Lenders: loanDepot
• Best for VA Loans: Veterans United

5 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:

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.

• Loan types offered: Conventional, FHA, USDA and VA
• Credit score requirement: 620
• Average days to close a loan: 30-45 days

2. Best for Self-Employed: CrossCountry Mortgage

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.

• Loan types offered: Conventional, FHA, USDA and VA
• Credit score requirement: 580
• Average days to close a loan: 21

3. Best for Comparing Rates: Credible Mortgage

Unlike individual mortgage lenders, Credible is a lender marketplace that allows you to compare multiple lenders. You'll enter basic financial information and get quotes from several lenders on standard home mortgage products. Credible offers a free, fully online mortgage broker service that lets you get quotes from online lenders. It offers straightforward, convenient service with the possibility of finding the lowest interest rates.

• Loan types offered: Conventional, FHA, VA USDA and Jumbo
• Credit score requirement: 620 (depends on the lender)
• Average days to close a loan: 30 - 45 (depends on the lender)

4. Best for Comparing Lenders: loanDepot

loanDepot is a non-bank lender that gives you convenience and efficiency online with the option to visit one or over 200 branches across the country. loanDepot offers fixed-rate and adjustable-rate conventional mortgages. You could also secure jumbo, FHA or VA loans, although conventional loans made up most of LoanDepot’s mortgage originations last year. LoanDepot also offers 10-, 15-, 20- and 30-year mortgage terms. 

In addition to mortgages and home refinancing, LoanDepot offers free credit score monitoring to help you prepare to apply for a mortgage. You'll need at least 5% downpayment. 

• Loan types offered: Conventional, FHA, VA, and Jumbo
• Credit score requirement: 620 (depends on the lender)
• Average days to close a loan: 30 days (depends on the lender)

5. Best for VA Loans: Veterans United

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.

• Loan types offered: VA, USDA, FHA and Jumbo
• Minimum credit score: 620
• Average days to close a loan: 30

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 data: 

Total households: 3,202,241

Median list price: $625,000

3 most expensive cities in Washington to buy a house:

• Hunts Point: $7,063,648
• Medina: $4,167,873
• Yarrow Point: $3,977,997

3 most affordable cities in Washington to buy a house:

• Yakima: $346,500
• Spokane: $385,000 
• Pasko: $400,000 

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.

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 Loans

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 Loans

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 Loans

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 Loans

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 Loans

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!

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