What Mortgage Program Is Right for Me? A Plain-English Guide to Your Options
If you’ve been asking yourself “what mortgage program is right for me?” — you’re asking exactly the right question. The loan type you choose affects your down payment, your monthly payment, your interest rate, and how easy it is to qualify. And the options are more varied than most people realize.
This guide breaks down every major mortgage program in simple terms: who each one is designed for, what the key requirements are, and how to think about your own situation. If you’ve ever been told you don’t qualify — or you’re not sure where to start — keep reading. [Read more…]
First-Time Home Buyer Programs: Your Guide to Buying a Home in Washington State
Earlier this month, USDA updated the maps that determine if homes are eligible for USDA financing. USDA allows eligible home buyers to purchase a home with no down payment. In order the qualify, the borrowers must meet the income limit requirements and the property needs to be in a designated rural area.
. USDA does not have loan limits, the program is limited by household income and if the property is in a USDA designated location.<!--more--> This is a government backed program that allows 100% USDA financing (no down payment) on homes that are in a designated rural community for families earning less than a certain income. A majority of Washington State single family residences (homes and condos) qualify...of course if you live in metropolitan areas like Seattle or Bellevue, odds are your home will not. However, if you're considering areas like Duvall, parts of Maple Valley, Vashon or Bainbridge Island, it may qualify for USDA 100% financing. To qualify, families must be without "adequate housing" (may not own a home or adequate home), must have reasonable credit history and be able to afford the mortgage (29/41 is the debt to income ratio guidelines). Income limits vary by county and the entire household income is considered (not just the primary borrowers or those borrowers on the mortgage) for determining if the income meets the guidelines. This is separate from income considered for "debt-to-income" ratios. Income limits vary on household size from 1-4 person or 5-8 person. As of the publishing of this article, in Washington, the income limits by county are: <ul> <li>King and Snohomish Counties: 1-4 Person $102,150 | 5-8 Person $134,850</li> <li>Pierce County: 1-4 Person $83,150 | 5-8 Person $109,750</li> <li>Benton County: 1-4 Person $80,850| 5-8 Person$106,700</li> <li>Clark County: 1-4 Person $84,550 | 5-8 Person $111,600</li> <li>Franklin County: 1-4 Person $80,850| 5-8 Person $106,700</li> <li>Garfield County: 1-4 Person $78,050 | 5-8 Person $103,050</li> <li>Island County: 1-4 Person $89,550 | 5-8 Person $118,200</li> <li>Kitsap County: 1-4 Person $86,950 | 5-8 Person $114,750</li> <li>Kittitas County: 1-4 Person $75,700 | 5-8 Person $99,900</li> <li>San Juan County: 1-4 Person $78,050 | 5-8 Person $103,050</li> <li>Skagit: 1-4 Person: 1-4 Person $78,400 | 5-8 Person $103,500</li> <li>Skamania Counties: 1-4 Person $84,550 | 5-8 Person $111,600</li> <li>Thurston County: 1-4 Person $88,900 | 5-8 Person $117,350</li> <li>Whatcom County: 1-4 Person $80,350 | 5-8 Person $106,050</li> <li>Whitman County: 1-4 Person $77,750 | 5-8 Person $102,650</li> <li>All other Counties*: 1-4 Person $75,650 | 5-8 Person $99,850</li> </ul> *All other counties includes: Adams, Asotin, Chelan, Clallam, Columbia, Cowlitz, Douglas, Ferry, Grant, Grays Harbor, Jefferson, Klickitat, Lewis, Lincoln, Mason, Okanogan, Pacific, Pend O'Reille, Spokane, Stevens, Wahkiakum, Walla Walla, and Yakima. You can check<a href="https://eligibility.sc.egov.usda.gov/eligibility/incomeEligibilityAction.do?pageAction=state" target="_blank" rel="noopener noreferrer"> current USDA income limits by visiting the USDA site (clicking here)</a>. Please be sure to click the "guaranteed" option. Income limits can and do change. You can also use <a href="http://eligibility.sc.egov.usda.gov/eligibility/incomeEligibilityAction.do?pageAction=state&NavKey=income@11" target="_blank" rel="noopener noreferrer">USDA's income eligibility calculator</a> which will factor in deductions to income, select the "guaranteed" results (not "direct"). Income used to determine if a family is under the household income limits includes all those (18 years and older) who will be living in the home regardless of whether or not they're on the mortgage. Incomes of children over 18 who working AND who are full time students are not factored. Here is more information of <a href="http://eligibility.sc.egov.usda.gov/eligibility/IncomeEligibilityHelp_SFH.jsp#1">how USDA loans calculate household income</a>. Once you've determined that you meet the household income limits, the next step is to see to see what communities in your area are eligible for USDA financing. You don't have to go too far from Seattle or Bellevue to find homes that do qualify for this type of mortgage. <a href="http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?pageAction=sfp&NavKey=property@11" target="_blank" rel="noopener noreferrer"> Using the USDA site, under "Property Eligibility" click "Single Family Dwelling".</a> From there you can either enter a specific address or click on the map to narrow down your search. <img class="wp-image-12773 alignleft" src="https://mortgageporter.com/images/2017/05/2017-05-usda-173x300.jpg" alt="" width="300" height="519" /> <strong>Sellers and real estate agents who are working in neighborhoods that qualify should be sure to include this program as an option they'll consider for financing on their offers. </strong>USDA often offers a more attractive payment than FHA because of FHA's higher mortgage insurance and funding fees. <span style="color: #1c1c1c;">This map is as of the publishing of this post. Areas that are outside of the peachy orange shade are eligible for USDA 100% financing (no down payment) mortgages.</span> I'm pleased to offer USDA financing as an option for borrowers who meet the criteria. If you have any questions regarding USDA or other mortgage programs for financing homes located anywhere in Washington State, please contact me, I'm happy to help! <a href="https://mortgageporter.com/apply">Click here for a mortgage rate quote for homes located anywhere in Washington.</a>){kind=link}