Getting on Track to Buy Your First Home in Washington State

They were doing a lot of things right. But they were also missing a few pieces that lenders look for: established credit history, a longer employment track record, and some savings set aside. Rather than push them into a loan they weren’t fully ready for, we put together a plan. A year or so later, they were in a much better position.

That kind of conversation happens more often than you might think. And it’s one of my favorite parts of this job — helping people get their financial house in order before they buy a home, so they can do it with confidence and on the best possible terms.

If you’re not quite ready to buy yet but want to be, here’s what I typically recommend.

Step 1: Understand Where You Stand Financially

Before anything else, get a clear picture of your current finances. Pull your credit reports from AnnualCreditReport.com — you’re entitled to a free report from each of the three bureaus. Look for any errors, collection accounts, or late payments that could be holding your score down.

You don’t need a perfect credit score to buy a home in Washington State, but your score does affect your loan options and the rate you’ll qualify for. Conventional loans generally want to see a 620 or higher; FHA goes down to 580 with 3.5% down. Programs like HomeReady and Home Possible can work with scores as low as 620 and offer reduced mortgage insurance for qualifying buyers.

Step 2: Build and Protect Your Credit

Credit history is one of the most important factors in mortgage qualification — and one that takes time to develop. Here’s what I recommend:

• Maintain 3 open credit accounts. Ideally a mix of revolving (credit cards) and installment (auto loan, student loan). You don’t need to carry a balance — use a card for a tank of gas or a grocery run, then pay it off.
• Keep utilization below 20%. Credit utilization — how much of your available credit you’re using — has a significant impact on your score. If you have a $5,000 limit, try to keep the balance under $1,000. Also be sure not to go over your credit limit – even if it’s just $1 over your credit limit, it’s damaging to your scores.
• Pay on time, every time. Payment history is the single biggest factor in your credit score. Set up autopay for at least the minimum on every account.
• Don’t close old accounts. Older accounts with good history help your score. Leave them open even if you’re not using them.
• Avoid opening new accounts right before applying. New inquiries and accounts can temporarily lower your score. Hold off on any new credit in the 6–12 months before you plan to apply for a mortgage.

Step 3: Don’t Make Any Big Financial Moves

This is the one that catches a lot of people off guard. When you’re preparing to buy a home, stability is everything. A few things to avoid:

• Don’t buy a new car. Not only does a new car payment reduce the mortgage payment you’ll qualify for — a large new debt will also ding your credit score. Wait until after you close on your home.
• Don’t co-sign for anyone. If a friend or family member asks you to co-sign on a loan, think carefully. That debt goes on your credit, and the payment counts against your qualifying income — whether or not you’re the one making it. One late payment by the other borrower can also hurt your score.
• Don’t change jobs right before applying. Lenders ideally want to see a two-year employment history. Changing employers isn’t automatically a problem — especially if you’re staying in the same field or getting a raise — but timing matters. Talk to a mortgage advisor before making a move.
• Don’t make large unexplained deposits. Every large deposit in your bank account will need to be documented and sourced. Gift funds are fine if they’re documented properly, but random cash deposits or transfers can complicate underwriting.

Step 4: Practice Making a Mortgage Payment

This is one of the most practical exercises I give clients who are getting ready to buy. Once we’ve reviewed what a realistic mortgage payment would look like for you, I encourage you to start “practicing” that payment now.

If your current rent is $1,800 and a mortgage would run $2,400, start putting that $600 difference into a savings account every month — and don’t touch it. You accomplish two things at once: you build up your down payment savings, and you find out whether that payment feels manageable before you’re locked into it.

How comfortable is the payment? What are you giving up to make it? Is the tradeoff worth it to you? These are important questions to answer before you’re sitting at a closing table.

Step 5: Save With a Target in Mind

You don’t need a 20% down payment to buy a home in Washington State — far from it. Here’s a quick look at minimum down payment requirements by loan type:

Beyond the down payment, plan for closing costs (typically 2–3% of the loan amount) and a reserve cushion of at least 2–3 months of mortgage payments after closing. Having reserves — even when the lender doesn’t require them — gives you a buffer if something unexpected comes up after you move in.

Down payment assistance programs may also be available depending on your income, the property location, and the loan type. Ask me about what’s currently available in King, Pierce, and Snohomish County.

Step 6: Understand Your Employment and Income Picture

Lenders want to see stable, documentable income. Here’s how different employment types are typically handled:

• W-2 employees: Two years of employment history is ideal. Gaps can sometimes be explained (college, health, caregiving), but consistency helps. A recent job change is usually fine if you’re in the same field or your pay went up.
• Salaried vs. variable pay: Base salary is the easiest to qualify with. Commissions, bonuses, and overtime are typically averaged over 24 months — and only counted if there’s a history of receiving them.
• Self-employed borrowers: Lenders will use your tax returns (two years) and average your net income. The first couple of years can be tough if write-offs are high. Plan ahead if you’re building a business and want to buy a home in the near future.
• New grads: If you just finished school and started a job in your field of study, that can work — college can sometimes count toward your employment history if it’s directly relevant.

Step 7: Set Realistic Expectations About the Home

One of the most important mindset shifts for first-time buyers is letting go of the idea that your first home has to be your forever home. Starter homes are how most people build equity — and that equity becomes the down payment for the next home.

In the Seattle metro area, a starter home might mean a condo in a walkable neighborhood, a townhouse in a first-ring suburb, or a single-family home a bit farther out than you originally planned. As long as you take care of it, there will always be another buyer behind you who needs to start somewhere too.

It’s also worth thinking about what you can realistically afford on a monthly basis — not just what a lender says you’re approved for. Lenders qualify you based on ratios. I help you think through what feels sustainable in your actual life.

Step 8: Consider Taking a Homebuyer Class

One of the best things you can do while you’re in the preparation phase is take a homebuyer education class. It covers the mortgage process, what to expect at closing, how to evaluate a home, and how to build long-term financial stability as a homeowner — all in one place.

I offer free classes and workshops designed specifically for Washington State buyers. Whether you’re six months out or two years out, it’s a great way to get your questions answered and walk away with a clear picture of what’s ahead.

How Long Does It Take to Get Ready?

It depends on where you’re starting from. For some people, three to six months of focused effort is enough. For others — especially if there are credit issues to resolve or savings to build — a year or two is more realistic. And that’s okay.

The worst thing you can do is rush into a home purchase before you’re ready. The best thing you can do is start the conversation now, find out exactly where you stand, and build a plan with someone who can tell you honestly what needs to happen next.

Frequently Asked Questions

Rhonda Porter · Licensed Mortgage Advisor · NMLS #121324 · Washington State
Loan programs, income limits, and guidelines are subject to change. Always verify current program details directly with your mortgage advisor.