Financing Options You Need to Know About as a First-Time Home Buyer in Seattle
March 3, 2023
The headlines we see about Seattle real estate can really make buying a house look scary and stressful. Or downright impossible. And these things are *especially* true if you’ve never bought a home before.
If you don’t read the rest of this blog, this should be your #1 takeaway:
Many people don’t realize that they CAN buy a home in this market. There are so many loan options out there, especially if you’re a first-time buyer. You don’t need a 20% down payment. In fact, the National Association of Realtors (NAR) recently reported that on average, the typical down payment for first-time home buyers is 6%. This report also shared that the typical down payment for repeat buyers is 17%.
If you’re someone who wants a closer look at the details, then keep reading!
There are MANY different types of loan options out there. You don’t have to put 20% down, and in fact, some people put 0% down.
Everyone’s situation is unique and there is no “one size fits all” loan. Before you start getting serious about searching for your first home, you will want to gain an understanding of how much you can afford. You can do this by connecting with a lender (and I am happy to connect you with a few great lender options!). In the meantime, take a moment to browse a few potential loan options:
0% Down (Wait, That’s a Real Thing?)
What type of home you buy will affect the type of loan you can get. If you want to buy a condo, for example, getting a loan through the WSHFC (Washington State Housing Finance Commission) could be an option. They give you a second loan (in addition to your mortgage) that will cover your down payment. This is a high interest, government-assisted conventional loan. This provides you with a great opportunity to enter the real estate market and start building equity. If you want to go this route, it’s best to talk to a lender to see if this is feasible for you. We’re not saying it’s easy to get a 0% down loan, but it is possible!
3.5% Down Payment
This type of FHA (U.S. Federal Housing Administration) loan is great for those with a lower credit score and maybe a lower income. It’s ideal for those who may qualify for a larger loan, but maybe don’t have the ability to save up for a down payment. However, keep in mind that many condo associations are not FHA approved. An FHA loan could work for a townhouse or single-family home, though!
Regular Conventional Loan
These types of loans start with a 5% down payment and go up from there. Homebuyers putting down anywhere from 5-20% is extremely common. There’s this popular assumption out there that everyone has to put down 20%, but that’s just not the case!
If you are a first-time home buyer, I’m here to answer any questions you might have.