Wanted to get shift in a new house? Are you married and planning to get yourself your own house? Is financial crisis is the root cause that you haven’t bought a house until now? If your answer is yes and you are planning to get yourself a house in the best economical way then you have landed on right page. You will be getting a complete idea about buying a house in Seattle with mortgage company as source of finance.
It is advisable to have basic knowledge prior buying house in Washington State in 2019 which includes knowing the minimum down payment requirement, credit score, closing cost, and home appraisal. Without further ado, let’s discuss each of these –
- Down Payment
Minimum down payment means least amount of cash that a borrower should pay from his own fund when he/she purchase house and it is one of the basic requirement for buying house in Washington state. The actual amount that is required might vary by loan programs. Your down payment may range from 3% to 20% of the purchase price depending upon the home loan program you have opted.
Federal Housing Administration Loan (FHA loan) has a down payment of 3.5% which makes it people’s choice for first time buyers.
- Credit score
Credit score is a numeric expression of the risk a lender will take when you borrow money. It is influenced by numerous factors and helps in ascertaining whether you are eligible to borrow money at defined terms and conditions or not. FICO score is a method widely used by credit agencies in determining risk of borrower. The national average FICO score as on September 2018 was 704. Credit score ranging from 300 to 579 is a poor credit score. However, you can improve your credit score by making payments of your bills in full on time consistently.
- Home Appraisal
Apart from minimum amount of down payment and good credit score, one must focus on an exact home appraisal. Home appraisal in simple words refers to value of home in the opinion of professionals. It basically safeguards the interest of lender as over –borrowing for the property kept as collateral will cause loss to the lender. So this appraisal protects him from lending amount which he might not be able to recover in the worst situation. To make sure that home appraisal depict factual information, licensed home appraiser is hired who assists in verifying the actual worth of the house you are going to purchase. If the appraisal report shows value equivalent or above the contract price, you can proceed further but if the appraisal is low, you have to negotiate with the seller to make things go as per your planning.
- Closing Cost
These are the expenses that you have to bear to complete the real estate transactions. These may include appraisal fees, title insurance, loan originations fees etc. Though the amount you have to pay as closing cost is influenced by various factors however, it ranges from 2% to 5% of the purchase price on an average.
Above mentioned are the basic requirements one should keep in mind while planning for buying a new house. You might encounter an additional requirement which you have to fulfill depending upon the kind of loan you choose.