Whether you plan on moving to one of the modern urban centers in the Seattle–Tacoma Metropolitan Area or into the envelope of mystical beauty throughout Washington’s hills and forests, relocating into a home that you can call your own offers a greater opportunity for personal and financial growth. If you are looking closer at the Evergreen State as a place to spread your roots, you’ll want to read the Movoto analysis of Washington mortgage rates before you close the deal.
What Does the Washington Mortgage Market Look Like?
Mortgage hunters who have a good to excellent credit score in the 700 or higher range may qualify for rates as low as 3.4% on a 30 year, fixed interest loan. The average home seeker can expect an APR closer to 3.9% with a down payment of 20% of the list price. The market is not showing much mercy to those with a poor credit score or those looking to dodge a down payment, but that is to be expected after the role that subprime lending played in the process. If you want a loan type other than a 30 year fixed, you may have to shop around for a bit longer to find one.
You’ll also need to glance over at the real estate market. The median housing values in the heart of Seattle and its more affluent suburbs is around $450,000. That number has been creeping steadily upwards throughout the Puget Sound, but you can still find single family units at $200,000 or lower if you’re willing to hunt around the denser population zones with higher property values.
To help you see how the rates play out in different areas with buyers and properties from around the state, here are a couple of examples based on theoretical home shoppers seeking a mortgage.
- Mr. and Mrs. Manning have a respectable yet somewhat below optimal credit score of 675. Mrs. Manning has always loved the smell of the air around the Puget Sound, so they opt for a three bedroom, single family home in the West End of Tacoma near Orchard Street, valued at $265,500. With a 20% down payment of $53,100, the Mannings have access to a range of APR’s from 3.846% to 4.375% and monthly payments  that wander from $984 to $1,096. For the same number of rooms in the middle of Brooklyn, their down payment would almost double to $98,000 while their monthly installments would jump from 84.5% to 256.2%. They’d also lose out on the glorious view of Commencement Bay.
- Mrs. Schuster is rarely home during her busy work schedule, but she would still like to have an accessible refuge that sits respectably close to her storefront in the Pike Place Market. She knows that property values in Seattle are high, but no pets and no family let her scale down to a single bedroom condominium at $289,300. Thanks to a phenomenal credit score of 820, she can grab rates down to 3.782% with most falling under 4%. Her $1,185 to $1,252 in monthly payments make the condo more expensive per square foot than the Manning home, but she was also able to drive down her upfront payment to just 14% of the market value. For the same size of condo in New York City, Mrs. Schuster would have a better variety of mortgage options, including 5/1 ARM’s and 15 year fixed, but her down payment and monthly payments would be roughly the same.
How Has It Behaved in the Past, and What Can I Expect It to Do in the Future?
Since the financial crisis of 2008, mortgage rates in Washington have been settled at a relatively low level even when extending the comparison back to decades before the crash. The Fed increased the benchmark rate for mortgage loans by what might seem like an insignificant amount (25 basis points or 0.25%), but the change is having a more minimal impact than originally anticipated. Daily fluctuations can rise or fall with variations typically under 0.1%.
In addition to the influence of local events, national shifts in the mortgage market also play a role in the swaying of the needle. Papers like USA Today and the Washington Post report that these increases in loan interest benchmark rates will be pushed further upwards over the next few years barring a substantial turn in the projected economic outlook, especially after several years of steadily increasing employment, job creation and availability, and a tentatively hopeful market population.
Median home values are also rising in response to the market upswing, so those considering a move to Washington should do so as quickly as possible. Locking in a fixed rate on a lower value now can set you up for a healthy return on your investment whether you make the property the foundation of your dynasty or pass it on to the next owners in a few years.
Where Can I Learn More about the Mortgage Rates?
Figuring out how much your mortgage will be requires knowing your credit score and the information about the intended property, including sale price and location. After you have both, you can use the Movoto mortgage search tool to look for loans specifically tailored to the property and your available credit. If the numbers sound good and you would like to tread further on the path to ownership, contact a Movoto agent by phone or on the website.
2 Point Highlight
The average home seeker can expect an APR closer to 3.9% with a down payment of 20% of the list price.
Median home values are also rising in response to the market upswing, so those considering a move to Washington should do so as quickly as possible
