Today's Rates In Washington
The state of Washington is known for coffee shops and grunge rock, for apple orchards and volcanoes, for Boeing and Microsoft. And while the climate may vary from the temperate rain forest of the Olympic Peninsula to the near-deserts of the Columbia Plateau, finding the best Washington mortgage rates is going to be pretty much the same wherever you go.
Of course, the Seattle real estate market is going to be markedly different from what you find in Yakima or Spokane. But the fundamentals of shopping for a mortgage remain the same. You want to find the right type of loan, with the best combination of mortgage rate and fees, for you.
If you're new to the world of mortgages, locating and evaluating low-rate home loans and refinances might be challenging. You may already know that the lowest mortgage rate may not be the best deal. Or that a loan with low monthly payments could cost you more over the long run. Or that the annual percentage rate (APR) offers a shortcut to comparing loan offers with different rates and fees.
These are only some of the things for Washington residents to consider when shopping for a home loan. That's why we've assembled here a broad collection of consumer resources to assist you. Check the links at the top and bottom of this page for articles on refinancing, getting approved for a mortgage, credit scores, home equity loans, jumbo mortgages and more. Or use the search option to find an article on the topic you're interested.
Use our rate request form at the top of the page to get personalized mortgage rate quotes from multiple Washington state lenders, at no cost or obligation. Then use one or more of our many financial and mortgage calculators to run the numbers to find the best loan for you.
Washington FHA Loans
If you're a first-time homebuyer, you'll probably want to at least check into FHA loans. Washington FHA loan requirements are fairly lenient on borrower credit scores, making these loans available to borrowers who don't have a long credit history. They also allow down payments of as little as 3.5 percent of the loan amount, so you don't need to have a lot of cash on hand to get one.
FHA mortgage rates are often lower for borrowers with lower credit scores and smaller down payments than rates on conventional mortgages as well. Borrowers looking at inexpensive properties also have the option of an FHA 203(k) mortgage, a "fixer-upper" loan that allows you to borrow money for repairs or home improvements as part of the purchase mortgage.
On the downside, Washington FHA loan requirements include a substantial upfront fee for mortgage insurance that is not charged on Fannie Mae/Freddie Mac mortgages, though that can usually be included as part of the loan itself. Borrowers making less than a 10 percent down payment must also pay monthly mortgage insurance premiums for the life of the loan, though this can be eliminated by refinancing once you reach 20 percent equity.
Also called conforming loans, these are residential mortgages backed by Fannie Mae or Freddie Mac. These are the most common type of U.S. home mortgage and offer their best rates and terms to borrowers with good credit scores who can put up a substantial down payment. Credit scores as low as 620 and down payments as little as 3 percent are allowed, but expect to pay higher rates with lower credit scores and/or down payments.
Conforming mortgages allow higher lending limits than FHA loans, particularly in areas with high real estate values such as Seattle. Borrowers putting down less than a 20 percent down payment must pay monthly premiums for private mortgage insurance (PMI), though that is automatically canceled once you have reached 22 percent equity through regular amortization of the loan.
VA loans are available to eligible borrowers with a military background, including honorably discharged veterans as well as current service members and members of the National Guard and Reserve who have met certain service requirements.
One of the big attractions of VA loans is that borrowers can obtain a mortgage with no down payment or mortgage insurance premiums up to fairly generous lending limits. (Repeat borrowers may need to make a down payment if they have exhausted their VA entitlement, however).
Mortgage rates for VA loans are competitive with other types of Washington home loans, although VA loans do charge a funding fee that can range from 1.25 -3.3 percent of the loan amount, with higher fees charged to repeat borrowers and those who make no down payment.
Most Washington borrowers who purchase home or refinance a mortgage opt for fixed-rate mortgages, where the interest rate never changes over the life of the loan. However, for some an adjustable-rate mortgage (ARM) may be a more attractive choice.
With an ARM, the rate varies over time, reflecting changes in underlying market rates. This means the rate may move up or down. It also allows for a lower initial rate than on a fixed-rate mortgage, as there is less uncertainty for the lender.
Most ARMs used for home purchases or refinancing start out with a fixed rate for several years, then readjust periodically from then on. These loans are usually described with terms like 5/1, 7/3, 5/5 and the like, with the first number being the number of years the rate is fixed, and the second how frequently the rate changes after that.
ARMs are often a good choice for borrowers who expect to move or refinance in a few years, so they don't need to lock in a rate for three decades, as you would with a 30-year fixed-rate loan. They're also common on high-value mortgages for borrowers who want to minimize their loan payments.
Home Equity Loans
A home equity loan is a fully amortizing second mortgage, usually with a fixed interest rate. The amount you are able to borrow is based on the value of equity you have in the home. You generally want to have at least 20 percent equity remaining after you take out the loan, although you may be able to go as low as 10 percent and even lower, if you're willing to pay a higher rate or fees.
Home equity loans often have low closing costs and, depending on the amount borrowed, can be paid off more rapidly than first mortgage debt. Relative to home purchase or refinance mortgages, home equity loans generally have higher interest rates.
Another type of home equity loan is the home equity line of credit, or HELOC. This is like a credit card secured by your home equity that you can borrow against as you wish, up to a certain limit. HELOCs have adjustable rates during the draw period when you can borrow against them, but sometimes can be converted to a fixed-rate when it comes time to repay the loan principle.