Home Loans In Lacey, Washington

Lacey is a city in Thurston County, a suburb of Olympia. It is called “an urban oasis surrounded by outdoor paradise” due to its vast nature preserve near the state capital.

The real estate market in Lacey is very competitive, with an average median price of $464k and a median price per square footage of $289.

There are several home loan programs in Lacey, a conventional-conforming loan is the most prevalent mortgage loan, followed by an FHA loan.

Home Loan Programs in Lacey

• Conventional – Conforming Loan

Conforming loans follow the loan limit set by the Federal Housing Finance Agency )FHFA) and the lending guidelines of the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. They are not part of a federal program, making them more challenging to qualify for than government-backed mortgages.

About 72% of home buyers in Washington state used a conventional-conforming loan to finance the purchase of a property in Washington last year. Considering more than half of these purchases were made by first-time homebuyers, it is worth noting that people preferred conventional-conforming loans over government-insured or guaranteed loans.

A borrower needs a minimum credit score of 620 to qualify for a conventional-conforming loan. Their debt-to-income (DTI) ratio must be less than 43% and have adequate reserves. The minimum down payment required for a conventional loan is 3 – 5% of the sales price, depending upon the borrower’s credit score. If a borrower cannot come up with a 20% down payment, the loan must carry Private Mortgage Insurance (PMI). The PMI can only be canceled once the loan balance reaches 78% of the original purchase price.

• FHA Loan

An FHA loan is a mortgage insured by the Federal Housing Administration. They work under the jurisdiction of the United States Department of Housing and Urban Development (HUD). FHA insures the loan against default, hence, the Mortgage Insurance Premium or MIP. If the borrower cannot make their mortgage obligations, the lender has no risk in the event of foreclosure. The FHA’s MIP is for the life of the loan and can only be canceled by either paying off the loan entirely or refinancing to a conventional loan.

FHA loan is the easiest of all mortgages to qualify for, along with a low down payment requirement. The minimum credit score requirement is 580 to qualify for a 3.5% down payment. However, if your scores are between 500 – 579, you may still qualify if you put in a minimum 10% down payment. 

• VA Loan

VA loans are mortgages guaranteed by the US Department of Veterans Affairs and extended to eligible service members and their spouses. To qualify for a VA home loan, you must meet specific eligibility requirements related to your military service, credit, income, and a valid Certificate of Eligibility (COE).

• Jumbo Loan

Jumbo loans are mortgages used to finance properties that are too expensive for a conventional-conforming loan. They are called “jumbo” because they exceed the loan limits set by the Federal Housing Finance Agency and the guidelines of the government-sponsored enterprises Fannie Mae and Freddie Mac.

You must have a high credit score to qualify for a jumbo loan. Lenders typically require a credit score of 700; some require a score of 720 and up. Your debt-to-income (DTI) ratio must be below 43%. Also, adequate cash reserves will demonstrate your ability to handle unforeseen expenses and mortgage payments; thus, a 6 – 12 months’ worth of reserve is expected from the borrower.

Apply for a Home Loan in Lacey

Capital Home Mortgage is a direct Washington mortgage lender and servicer that offers a wide range of mortgage products to meet all of its customers’ mortgage-related needs. Whether you have lived in Lacey your entire life or have recently moved here, our highly experienced Capital Home Mortgage Team will work to find the best loan program to suit your budget and individual needs. 

Call us at (360) 474-5656 to get started on your home ownership journey.