The biggest issue with buying a home today in Seattle

UPDATED: This original post from 2013 was updated in March 2026.

Yesterday I met for coffee with one of my clients who is hoping to buy a home in a Seattle area neighborhood for around $600,000. They have already taken one of the most important steps in the home buying process by getting preapproved for a mortgage.

The preapproval process required they complete a loan application and provide me with documentation that supports the information provided on the loan application (such as W2s, paystubs and bank statements). After having a complete application, I am able to run their credit reports and run the scenario through automated underwriting, which provides us with an approval and conditions to that approval.

Here’s a bit from our conversation with a few of their questions.

Is it challenging to qualify for a home in Seattle?

It’s really not that hard to qualify. Presently our underwriting guidelines will allow:

• a low-mid credit score of 580 for FHA (possibly lower or no score)
• a minimum down payment of 3% for first time home buyers with conforming or 3.5% for FHA and zero down for VA.
• Home buyers need a two year employment history (sometimes your college education may count as an employment history)
• Income must be documented and consistent. NOTE: if your self-employed, paid commission or hourly (vs. salary), you may need a two-year history and income will be averaged. There are many alternative document programs available for self-employed borrowers.
• Down payment and funds for closing must be documented with complete asset account statements.

What are the biggest “hiccups” in a transaction?

• borrowers need to continue providing paystubs and bank statements. Do not toss or shred anything that has to do with your assets or income.
• large deposits need to be documented…so if your Great Aunt Nelly is giving a wad a cash or a check for a birthday present at the time you’re getting ready to buy a home, keep documentation or proof of where the cash came from.
• days prior to closing, employment is re-verified. If there are changes to employment or the employer is difficult to reach, this may cause a delay.
• a “soft” credit pull is done prior to closing as well to make sure no new debts have been acquired by the buyer. If there are new debts, the buyer will need to be re-approved factoring in the debt payments.
• If the credit report is getting ready to expire prior to closing, a new credit report will be obtained. This may have additional impacts to the transaction if there are changes to debts or credit scores.

What is the BIGGEST issue with buying a home today in Seattle?  INVENTORY!  

If you have been considering selling your home, NOW could be an excellent time to consult with a real estate agent…and I’m happy to recommend one to you!

As always, if you’re looking to buy a home or refinance your mortgage on a home located anywhere in Washington state, please contact me. I have been originating mortgages since April 2000 and I’m happy to help you!