Home Purchase Loans In Sammamish

Homebuyers in Sammamish may anticipate a robustly competitive real estate market. According to Redfin, selling a home in Sammamish takes about five days after receiving four offers on average.

Purchase Loan Programs in Sammamish

• Conventional – Conforming Loan

A conventional conforming loan in Sammamish, King County, Washington, is a mortgage that adheres to the Federal Housing Finance Agency’s (FHFA) and Fannie Mae’s and Freddie Mac’s guidelines. In 2023, these limits for single-family residences in King County have been set at $977,500, reflecting an increase in home prices and adjustments based on median home values. The limits for multiple-unit properties can reach $1,879,850 for four units. Contrast conforming loans with jumbo loans, which exceed these limits.

Conventional conforming loans generally have lower interest rates and more flexible terms than non-conforming jumbo loans. A minimum credit score (usually 620 or higher), stable employment, a low debt-to-income ratio, and a down payment are typical eligibility requirements. Specific requirements, such as the exact down payment percentage or credit score, may differ from lender to lender, but they typically center on these critical factors. 

• FHA Home Loan

An FHA (Federal Housing Administration) home loan in Sammamish, King County, Washington, is a government-backed mortgage designed to aid homebuyers, especially those with lower incomes and credit issues. The loan limit for FHA loans on single-family residences in King County is $977,500 in 2023, reflecting the region’s rising home prices. This type of loan typically attracts first-time homebuyers and those with more lenient credit requirements, as it allows for lesser down payments, such as 3.5%, for those with credit scores of 580 or higher.

FHA mortgages are available to borrowers with marginal credit, require smaller down payments, and may be insured by the federal government. Additionally, there is the option to include co-borrowers and the ability to accommodate various property types. Eligibility requirements include a credit score (580 for 3.5% down, 500-579 for 10% down), a Debt-to-Income (DTI) ratio of less than 45%, primary residence occupancy, a 2-year employment history, and income documentation. In addition, the property must satisfy FHA appraisal requirements. 

• VA Home Loan

The VA home loan is a mortgage initiative supported by the Department of Veterans Affairs (VA) accessible to qualifying veterans, active-duty military members, and surviving spouses1. Private financial institutions, like banks and mortgage firms, offer VA home loans, with the VA assuming a certain level of responsibility for the loan. This assurance from the VA allows the lender to offer more advantageous conditions to borrowers.

The benefits associated with a VA home loan encompass several key aspects. Firstly, there is no mandatory down payment requirement, although it is worth noting that certain lenders may still request down payments from specific borrowers. Secondly, these loans typically offer highly competitive interest rates, giving borrowers a favorable financial advantage. Additionally, the associated closing costs generally are limited in scope, further enhancing the appeal of VA home loans. Another significant advantage is the absence of private mortgage insurance (PMI), which can result in substantial savings for borrowers. Lastly, the VA loan program allows borrowers to utilize the guaranty multiple times, increasing flexibility and accessibility. To meet the requirements for a VA house loan, individuals must possess a credit history deemed satisfactory, an income level deemed sufficient, and a valid Certificate of Eligibility (COE) based on their service history and duty status.

• One-Time Close Construction Loan

A one-time close construction loan is a mortgage that includes both the building and permanent financing of a new home in a single loan and closing. Two separate closings and a re-qualification were once typical for construction loans.

One-time close construction loans offer several benefits, including consolidating closing fees into a single payment, delaying payments, and securing a fixed permanent interest rate. The eligibility criteria for a one-time close construction loan may differ among lenders but typically encompass many key factors. These factors commonly entail a robust credit history, a substantial down payment, comprehensive construction plans, cost estimates, income substantiation, and other pertinent financial details.

• Jumbo Loan

A jumbo home loan is a mortgage that exceeds the Federal Housing Finance Agency’s (FHFA) conforming loan limits for Fannie Mae and Freddie Mac. King County, Washington’s conforming loan limit in 2023 is $977,500. Any mortgage amount exceeding this threshold would be classified as a jumbo loan.

The benefits of a jumbo loan include larger loan limits and the ability to finance a property with a high value with a single loan. However, jumbo loans have stricter eligibility requirements than conventional loans. A jumbo loan requires a higher credit score than a conventional loan, typically above 700 points. Lenders will also consider your debt-to-income ratio (DTI) and liquid assets. You should demonstrate that your savings can cover at least six to twelve months of mortgage payments.

• Non-Qualified Mortgage Loan

A non-qualified mortgage (non-QM) is a loan designed to assist homebuyers who do not satisfy the stringent requirements for a qualifying mortgage. For instance, if you are self-employed or lack the required documentation for a conventional mortgage, you may need to consider non-qualified mortgages.

The benefits of a non-QM loan include greater underwriting flexibility, no personal income calculations required, no employment history required (in some cases), as little as 10% down, no reserves required (in some cases), credit scores as low as 620, and a low debt-service-coverage ratio (DSCR) on investment properties. Retirees, self-employed individuals, real estate investors, business owners, foreign nationals, buyers who live off investments or have high assets and low income, buyers with a high debt-to-income ratio, and buyers with less-than-perfect credit may benefit from a non-QM loan.

Apply for a Sammamish Home Purchase Loan

When considering the purchase of a residential property in Sammamish, prospective buyers are presented with a wide array of mortgage options to select from. Each type of loan possesses distinct advantages. For example, FHA and VA loans provide borrowers with the flexibility of credit score criteria, low down payment options, and the assurance of fixed-rate loans that guarantee predictable monthly payments.

Call (425) 324-9505 to speak with our Sammamish Home Loan Specialists about your home purchase loan options.