Home Purchase Loans In Lacey

The Lacey, Washington, real estate market is competitive and a seller’s market. Single-family detached homes are Lacey’s most prevalent housing variety, comprising 62.72 percent of the city’s dwellings. Three- and four-bedroom single-family detached residences predominate in Lacey in terms of building size and composition. 

Purchase Loan Programs in Lacey

Home buyers in Lacey have various home loan programs to choose from. The most prevalent among them are the following:

• Conventional Loans

A conventional mortgage in Lacey, Washington, is not insured or guaranteed by the federal government. This distinguishes it from government-backed mortgages such as FHA and VA. Conventional loans are the most common mortgage type among borrowers when measured by market share.

A conventional conforming loan in Lacey, Washington, is a type of mortgage that satisfies the Federal Housing Finance Agency’s (FHFA) loan limits and Fannie Mae and Freddie Mac’s guidelines. The 2023 conforming loan limits in Lacey, Thurston County, are $726,200 for a single-family home, $929,850 for a duplex, $1,123,900 for a triplex, and $1,396,800 for a quadplex.

To qualify for a conventional conforming loan in Lacey, Washington, borrowers must satisfy specific criteria. These may include a decent credit score, a stable employment history, and sufficient monthly income to cover the mortgage payment. Generally, a FICO credit score of 620 or higher is required for conventional loan approval. The precise requirements will differ based on the funder and loan program.

• FHA Loans

An FHA home loan is a mortgage insured by the Federal Housing Administration (FHA), a division of the United States Department of Housing and Urban Development (HUD). FHA loans in Lacey, Washington, are specifically designed to assist borrowers who may not qualify for a conventional mortgage. They provide reasonable interest rates and more flexible qualification requirements. One distinguishing characteristic is the low down payment, which can be as little as 3.5% of the purchase price, making it an appealing alternative for first-time homebuyers or those with limited financial resources.

One of the benefits of an FHA loan is the possibility of qualifying with a credit score as low as 580. In addition, FHA loans typically have lower interest rates, and applicants may use family gifts, grants, or employer assistance programs to cover the down payment.

A minimum credit score of 580 is typically required to qualify for an FHA loan in Lacey, Washington, although some lenders may require a higher score. An FHA-approved appraiser must appraise the property, and borrowers must provide evidence of two years of consistent income and employment. Notably, mortgage insurance premiums (both initial and annual) are required, increasing the loan’s long-term cost but allowing for more flexible eligibility requirements.

The 2023 FHA loan limits for Lacey, Thurston County, are $546,250 for a 1-unit home, $699,300 for a duplex, $845,300 for a triplex, and $1,050,500 for a quadplex.

• VA Loans

A VA home loan in Lacey, Washington, is a mortgage program guaranteed by the U.S. Department of Veterans Affairs and designed to help eligible veterans, active-duty service members, and certain National Guard and Reserves members purchase a home. The VA guarantees a portion of the loan, allowing lenders to offer more advantageous terms, such as no down payment and no private mortgage insurance (PMI). Conventional mortgages typically have higher interest rates and stricter credit requirements than VA loans.

The absence of a down payment requirement and the absence of the need for private mortgage insurance (PMI) are key features and advantages of a VA home loan, which can substantially reduce monthly mortgage payments. In addition, VA loans typically have lower interest rates and closing costs, making them one of the most affordable mortgage options for qualified applicants. Additionally, there is no prepayment penalty, allowing you to refinance or pay off the loan early without incurring additional fees.

To qualify for a VA home loan, you must fulfill specific service requirements, such as 181 days of active duty during peacetime, 90 days during wartime, or six years in the Reserves or National Guard. Also eligible are spouses of service members who died in the line of duty or due to a service-related disability. The minimum credit score varies by issuer but is typically lower than conventional loans. In addition, you’ll need a Certificate of Eligibility (COE) to demonstrate your service record and terms.

• USDA Loans

The United States Department of Agriculture guarantees a USDA mortgage loan in Lacey, Washington. USDA loans are designed to encourage homeownership in rural and suburban areas and offer options with no down payment and competitive interest rates. The USDA Guaranteed Home Loan, one of the more popular varieties of USDA loans, allows lenders to offer more favorable loan terms to low- to moderate-income families, as the USDA guarantees a portion of the loan, thereby reducing the lender’s risk.

Key features and benefits of a USDA Guaranteed Home Loan include no down payment, no private mortgage insurance (PMI), and typically reduced interest rates compared to other mortgage types. Additionally, USDA loans usually allow for 100 percent financing so that you can purchase a property without a down payment.

To qualify for a USDA-guaranteed home loan in Lacey, Washington, you must satisfy income requirements that vary based on location and household size. The property you’re interested in must be located in a USDA-designated rural or suburban area. In addition, applicants must possess a minimum credit score that varies from lender to lender but is typically around 640. Lastly, you must have a stable job and demonstrate that you can afford the monthly mortgage payments.

• Jumbo Loans

A jumbo loan in Lacey, Thurston County, Washington, is a mortgage that exceeds the Federal Housing Finance Agency’s (FHFA) conforming loan limits. In Lacey, Thurston County, a jumbo loan is any mortgage that exceeds $726,200. Federal agencies like FHA, VA, or USDA loans do not guarantee these loans, so qualification standards are typically stricter. Jumbo loans are ideal for buyers of high-priced properties that exceed the limits of conventional mortgages.

One of the primary benefits of a jumbo loan is the ability to finance a luxury or expensive property without requiring multiple mortgages. The interest rates on jumbo loans are typically competitive, and some programs offer adjustable-rate mortgage options. This can be advantageous for borrowers with the financial resources to manage more significant loan amounts and search for properties in high-cost areas where conventional loan limits are inadequate.

To qualify for a jumbo loan in Lacey, Washington, borrowers typically need a solid credit history. Typically, this consists of a credit score of 700 or higher, a low debt-to-income ratio, and substantial cash reserves. Additionally, a larger down payment of 20% or more of the home’s purchase price is typically required. In addition to requiring extensive documentation of income, assets, and employment history due to the higher loan amounts and associated risks, lenders usually require comprehensive documentation of income, assets, and work history.

Apply for a Lacey Home Purchase Loan

Capital Home Mortgage offers competitive interest rates, various mortgage options, including FHA, USDA, VA, and jumbo loans, and personalized, local assistance to guide you through the home buying process in Lacey, Washington. Capital Home Mortgage simplifies the complexities of mortgage financing by providing quick approvals and flexible terms tailored to your specific financial requirements, making the path to homeownership smooth and uncomplicated.

Call (360) 474-5656 to speak with our Lacey Home Loan Specialists about your home purchase loan options.