Home Purchase Loans In Lakewood

The housing market in Lakewood, Washington, is highly competitive. Homebuyers should anticipate competition and be prepared to act swiftly to secure the property of their choice. 

Purchase Loan Programs in Lakewood

• Conventional Loans

Conventional mortgages in Lakewood, Washington, are mortgages from private lenders with variable or fixed interest rates. The government does not back them and offers wide availability, higher limits, and low down payments. Typical eligibility requirements include a credit score of 620 or higher, a low debt-to-income (DTI) ratio, a 3 – 5% down payment, and evidence of stable income and employment. Private Mortgage Insurance (PMI) is cancellable when 20% equity is attained, regardless of the property type or down payment. The loan may also require property evaluations.

Advantages of conventional mortgages include program flexibility, benefits for excellent credit, and reduced down payments. They permit quicker processing and are suitable for stable-income consumers, including self-employed individuals. Conforming and nonconforming loans are two categories of conventional loans, with conforming loans following Fannie Mae and Freddie Mac’s guidelines. This type of loan provides flexible repayment options, various properties, and competitive interest rates.

• FHA Loans

The Federal Housing Administration (FHA), a United States Department of Housing and Urban Development (HUD) division, insures FHA mortgages. The purpose of these loans is to make homeownership more accessible to individuals who may have difficulty qualifying for conventional loans.

One of the primary advantages of an FHA loan is the reduced required down payment. In contrast to conventional loans, which typically require a 20% down payment, FHA loans can be obtained with as little as a 3.5% down payment. This reduced down payment makes it possible for more people to enter the housing market and realize their homeownership aspirations sooner rather than later. In addition, FHA loans have more accommodating credit requirements, allowing consumers with credit scores as low as 580 to qualify for financing. Additionally, these loans offer competitive interest rates comparable to conventional ones, making homeownership more affordable over the long term.

• VA Loans

A VA home loan is a unique financing program in the United States that offers favorable mortgage terms to eligible veterans, National Guard members, Reserve members, and other categories of service members. As in other locations, VA home loans in Lakewood, Washington, include advantageous features such as no down payment, low interest rates, limited closing costs, and no requirement for private mortgage insurance (PMI). These loans also feature lifetime benefits and multiple uses, with programs such as Purchase, Cash-Out Refinance, IRRRL for reduced interest rates, NADL for Native American Veterans, and Adapted Housing Grants for the housing of disabled veterans.

Eligibility for VA home loans is based on service length, duty status, and character, with National Guard and Reserve members meeting distinct eligibility requirements. There are also different service lengths for officers, wartime and post-WWII periods, and options for entitlement restoration. Generally, a Certificate of Eligibility (COE) is required to confirm qualification, with eligibility based on documents such as DD214 for veterans, statements of service for active-duty members, and other specific requirements for non-activated members and surviving spouses. In addition to credit, income, and property standards, eligibility requirements also include provisions regarding eligibility.

• Construction Loans

A construction loan in Lakewood, Washington, is a short-term loan used to finance the construction of a new property or renovating an existing one. These loans typically have a term of 12 to 18 months and are converted into a mortgage when the construction is complete. Some lenders offer interest-only payments during the construction phase, low down payment options, competitive interest rates, and flexible terms. In most cases, eligibility requirements include a minimum credit score of 680, proof of income, and a larger down payment.

One-time close construction loans, also known as Construction-to-Permanent loans, streamline the process by incorporating construction and mortgage financing into a single loan. This method eliminates multiple stages and fees and locks the interest rate in advance, providing security. It also guarantees a smooth transition from construction to permanent financing with fixed interest rates and guidance throughout the process. This differs from stand-alone construction loans, which necessitate separate construction and mortgage loans and may incur additional costs and requalification. The Construction-to-Permanent loan offers convenience and efficiency, whereas the stand-alone loan may be more suitable for those with small down payments or resale-oriented architects.

• Jumbo Loans

A jumbo loan is a mortgage used to finance properties too costly to qualify for a conforming loan. In Lakewood, Pierce County, the conforming loan limit is $977,500, so a jumbo loan is a mortgage that exceeds this amount.

The ability to finance high-value properties is one of the significant benefits of a jumbo loan. These loans can be used to purchase or refinance a primary residence, secondary residence, vacation home, or investment property. The interest rates on jumbo loans are competitive, and the terms are flexible, including fixed or variable rates. The eligibility requirements for a jumbo loan vary by lender but typically include a high credit score, stable income, employment history, and a substantial down payment or property equity.

• Native American Home Loans

The Section 184 Indian Home Loan Guarantee Program is a mortgage loan product explicitly designed for American Indian and Alaska Native families, Alaska villages, tribes, and tribally designated housing entities. Congress established this program in 1992 to increase access to capital and facilitate homeownership in Native American communities. Section 184 financing enables borrowers to purchase a property with a small down payment and flexible underwriting. Section 184 loans may be used for new construction, rehabilitation, buying an existing property, or refinancing on and off native lands.

Section 184 home mortgage loans made to Native borrowers are backed by the Office of Loan Guarantee within HUD’s Office of Native American Programs. The loan guarantee guarantees the complete repayment of the lender’s investment in the event of foreclosure. American Indians and Alaska Natives who are members of a federally recognized tribe, federally recognized Indian tribes, tribally designated housing entities, and Indian Housing Authorities are eligible borrowers. Borrowers must apply with a Section 184 lender approved by HUD.

• Non-Qualified Mortgage Loans

Non-qualified mortgage (non-QM) loans are mortgages that do not adhere to the Consumer Financial Protection Bureau’s (CFPB) lending guidelines. These loans are intended for homebuyers who may need to meet the stringent criteria for a conventional mortgage.

The flexibility of qualification requirements is one of the main advantages of a non-QM loan. Alternative income verification methods, such as bank statements or assets as income, can be used to obtain these loans. Non-QM loans are attractive for self-employed borrowers, business proprietors, high-net-worth individuals, and foreign real estate investors. Non-QM loans also feature competitive interest rates and adaptable terms, such as fixed or variable rates. Non-QM loan eligibility requirements differ by lender but typically include a high credit score, stable income and employment history, and a sizable down payment or property equity.

Apply for a Lakewood Home Purchase Loan

Capital Home Mortgage is a mortgage corporation that provides comprehensive services to homeowners throughout Washington state, including Seattle. We provide Native Americans with various mortgage options, including FHA, VA, Conventional, USDA, Jumbo, and HUD 184 loans.

We are a direct mortgage lender offering competitive rates and fees while providing high-standard customer service. Our mortgage professionals are available to answer any queries and expedite the mortgage application process for your convenience. 

Call (253) 528-4417 to speak with our Lakewood Home Loan Specialists about your home purchase loan options.