Home Loans In Tacoma, Washington

A port city and third largest city in Washington, Tacoma serves as the center of business activity for the South Sound region, with a population of about 1 million. Tacoma’s real estate market continues to be a seller’s market, with home prices rising 18% from 2021 to 2022.

A mortgage is an agreement between you, the borrower, and a mortgage lender to purchase or refinance a home without having all of the cash up front. This agreement gives lenders the legal right to repossess a property if the borrower fails to meet the loan terms or fails to pay back the money borrowed plus interest.

Different Types Of Mortgages

There are several types of home loans, each with its own set of requirements, interest rates, and benefits.

Mortgages are classified into two types: conforming loans and non-conforming loans. Conforming loans include most conventional mortgages, while government-backed mortgages and jumbo loans are non-conforming.

Let us discuss some of the most common types of loans you may encounter when applying for a mortgage.

• Conventional Loans

Any loan that is not backed or guaranteed by the federal government is referred to as a “conventional loan.” Conforming loans are frequently used in conjunction with conventional loans. The term “conventional” refers to a private lender’s willingness to make the loan without government assistance, whereas “conforming” refers to the mortgage meeting a set of requirements defined by Fannie Mae and Freddie Mac.

Conventional loans are an excellent option for many homebuyers and only require a down payment as low as 3 – 5% of the home’s purchase price. However, if you put less than 20% down on a conventional loan, you will be required to carry private mortgage insurance, which protects your lender if you default on your loan. It increases your monthly expenses but allows you to move into a new home sooner and with less money required upfront.

• Jumbo Loans

If you want to buy a home that costs more than the conforming loan limit in the United States ($647,200 in most areas and $970,800 in high-cost areas), you’ll need to apply for a jumbo loan.

Jumbo loans are classified as non-conforming conventional loans. Because jumbo mortgages exceed conforming loan limits and are provided by private lenders without government incentives, obtaining a jumbo loan will require at least a 20% down payment and loads of paperwork.

• Government-Insured Mortgages

Most private lenders offer government-backed mortgages in addition to conventional loans. These mortgages are designed to assist first-time homebuyers, low- to median-wage earners, and those with a history of credit problems in purchasing a home. Lenders may refuse to make these loans to high-risk borrowers without government insurance.

• FHA Loans

Under the Housing and Urban Development (HUD) jurisdiction, the Federal Housing Administration guarantees FHA loans. They are popular among average-income households and individuals because they require a lower down payment and a good credit score. Most lenders will approve an FHA loan with a down payment as low as 3.5 percent and a credit score as low as 580.

• VA Loans

VA loans are provided as a benefit of service to United States armed forces members and are backed by the Department of Veterans Affairs. They are available to veterans, active-duty military personnel, qualified reservists, eligible National Guard members, and surviving spouses.

VA loans are an excellent option because they allow you to purchase a home with no money down and an upfront fee that you can build into the loan.

• USDA Loans

USDA loans are only available for homes in eligible rural areas, though many houses near the suburban peripheries qualify as “rural” under the USDA’s definition. To qualify for a USDA loan, your household income cannot exceed 115% of the area’s median income. 

USDA loans are an excellent option for qualified borrowers because they allow you to purchase a home with no money down. For some, the USDA program’s guarantee fees are less expensive than the mortgage insurance premium required for FHA loans.

Tacoma, WA Mortgage Lender

Are you looking to buy a new home in Tacoma, Washington? You owe it to yourself to consult with one of the home loan specialists at Capital Home Mortgage. 

Home loans are not a one-size-fits-all product. This is why we conduct a needs-based analysis of your situation to recommend and offer the best possible home loan for your specific needs.

At Capital Home Mortgage, we strive to make home-buying an enjoyable experience for our clients and make a concerted effort to facilitate a smooth and more affordable home buying experience.

Find A Mortgage That Meets Your Needs

Capital Home Mortgage caters to all types of home buyers. Whether you are a first-timer looking for your dream home or an existing homeowner looking for investment properties, we have home loan products that will accommodate your needs, budget, and personal preferences.

You can count on our experienced and knowledgeable loan officers to provide you with sound advice, guidance, and insight so that you can feel more confident about your decisions. 

Call us at (253) 528-4417 and get started on the path of homeownership!