Washington Mortgage Rates

Living in Washington

The state of Washington boasts soaring mountain ranges, miles of coastline and too many state parks and nature reserves to count. This combination of natural amenities makes the state perfect for those who love the outdoors and activities like fishing, hiking, boating and whale watching. The state’s natural beauty could be part of the reason Washington’s population continues to climb, growing by more than 811,000 from April 2010 to July of 2018.

Housing prices in Washington are also on the move, according to the Washington Office of Financial Management. For example, the median housing price in the state rose from $246,300 in 2010 to $362,100 in 2018, representing a gain of more $100,000 during that time. Newer numbers show that the median housing price in the first quarter of 2019 is now at $374,700.

However, home sales in Washington are actually on the decline, according to a report from the Washington Center for Real Estate Research at the University of Washington. During the first quarter of 2019, existing home sales fell by 4% and building permit activity also fell 12% when compared with the prior year. This activity may reflect a slowing market, although housing prices don’t seem to be going down any time soon.

The rules and costs of buying a home in Washington

Like other states, Washington has some rules that govern real estate transactions, foreclosures and the division of property during divorce. Read on to learn about the rules that impact the Washington real estate market:

Home seller and buyer laws

Property disclosure

In the state of Washington, sellers are required to fill out a property disclosure form unless the buyer waives their right to disclosure in writing. The seller is required to disclose information regarding the following:

  • Encroachments and easements
  • Potential zoning issues or assessments
  • Water availability and quality
  • Availability of sewers or on-site sewage systems
  • Any structural issues
  • Any potential problems with household systems or fixtures
  • Any environmental issues
  • All information regarding any homeowners association tied to the property

Judicial and nonjudicial foreclosure

The state of Washington allows both judicial and nonjudicial foreclosures. While judicial foreclosure requires the process to take place in the courts, nonjudicial foreclosure is handled outside the court system by the mortgage lender or their representatives.

In the state of Washington, lenders cannot pursue homeowners for a deficiency after a nonjudicial foreclosure if their home sells for a price that is less than the amount owed. With a judicial foreclosure in Washington, on the other hand, lenders can go after homeowners for a deficiency.

Equitable distribution state

Washington is an equitable distribution state, meaning that property is to be divided “equitably” upon divorce. The division of assets does not have to be 50/50. Factors considered by Washington courts during equitable distribution can include the nature and extent of community property, any separate property acquired before and during the marriage, the duration of the union, the economic situation of both parties and where any children may reside after the divorce.

Escrow state

Washington state law does not require an attorney to be present for real estate transactions to move forward. Instead, buyers and sellers can work with their real estate agents, a title company and an escrow agent who can handle the paperwork involved in the closing of their home as well as any issues regarding the transfer of ownership. However, escrow agents are not attorneys, so they cannot offer legal advice throughout the homebuying process. Buyers and sellers are also legally able to work with any title company and escrow company of their choosing.


The state of Washington levies a real estate transfer tax whenever property is sold. This tax works out to .0128% of the total sales price, although cities and counties can charge additional real estate transfer taxes that vary by area.

In Washington, the median property tax in 2019 is $2,631 on a home worth the median value of $287,200, or 0.92% of a home’s value, according to Tax-Rates.org. This makes Washington the 11th most expensive state in terms of property taxes when you consider median income. Property taxes vary throughout the state though. King County, which includes Seattle, reported an average of $3,572 in taxes on homes in its jurisdiction. Meanwhile, Ferry County, which has the lowest property tax rate in the state, collects an average tax of $941.

The state of Washington has several programs that allow individuals to reduce their property taxes. For example, grants are available to disabled veterans and widows who meet certain conditions, provided they have a disposable income of $40,000 or less. Senior citizens and disabled persons may also receive a reduction in property taxes owed if they own and occupy their home and have a disposable income of $40,000 or less.

Conforming loan limits

In Washington in 2019, the conforming loan limit for single-family properties is generally $484,350. However, some areas with a high cost of living are granted higher conforming limits. King County, Pierce County and Snohomish County have a conforming loan limit of $726,525.

Conforming loan limits are the maximum limits that mortgages must adhere to in order to be purchased by government-sponsored enterprises Fannie Mae and Freddie Mac. Mortgages that fall under conforming limits are advantageous because they tend to come with lower interest rates that can help you save money over the life of the loan. Loans that don’t meet conforming limits are known as “jumbo loans.”

Programs for homebuyers in Washington

The Washington State Housing Finance Commission oversees a handful of programs that can help Washington homebuyers purchase a property or receive down payment assistance. Eligibility requirements vary by program.

In addition to programs offered statewide, some cities and counties in Washington have their own down payment assistance programs. There are programs available in Seattle, Bellingham and Tacoma, as well as in East King County and Pierce County.

Home Advantage Program

This program helps Washington residents purchase a home using a 30-year, fixed rate mortgage with a reduced interest rate. Homebuyers may also qualify for up to 4% of the first mortgage loan amount in down payment assistance. A need-based down payment assistance program is also available in amounts up to $10,000, although separate income limits apply.

Eligibility requirements:

  • First-time and repeat homebuyers are eligible
  • Single-family homes, townhomes, condominiums and manufactured homes qualify
  • Annual maximum income limit of $145,000 applies
  • Must be willing to work with a participating lender
  • Must take a 5-hour homeowner education course

Learn more

House Key Opportunity Program

This program is for low- and moderate-income Washington residents who want to purchase a first home, although it can also be used by families purchasing a home in a targeted area of the state.

Participants can use this program to qualify for a larger mortgage using flexible underwriting criteria. Down payment assistance in the form of a second mortgage is also offered, although you must meet separate income requirements based on county of residence and household size.

Eligibility requirements:

  • Must attend a homeowner education seminar
  • Must not have owned a home in the last 3 years, or must be purchasing in a targeted area of the state
  • You must be purchasing a new or never occupied property, or qualify for several down payment assistance programs including HomeChoice
  • You must meet income requirements that vary by county and household size
  • Properties must cost less than limits that vary by county and whether an area is targeted, between $265,000 and $500,000

Learn more

HomeChoice Downpayment Assistance Loan Program

This Washington-based program provides up to $15,000 in down payment assistance to individuals with disabilities or households with a disabled person. HomeChoice provides assistance as a second mortgage that must be repaid, and it is meant to be paired with the House Key and Home Advantage programs. Individual counseling is a requirement to qualify.

A 1% interest rate applies on the second mortgage for first-time homebuyers or those who haven’t owned a home in three years. However, you don’t have to be a first-time homebuyer if you are buying in a targeted area of the state.

Eligibility requirements:

  • Must be a disabled buyer or have a disabled person in your household
  • Income limits of $108,600 in King and Snohomish counties applies; $86,300 limit applies in all other counties
  • You must work with a participating lender

Learn more

EnergySpark Home Loan

This program is intended to help homeowners purchase energy-efficient properties or older homes that can be upgraded for energy efficiency. It is meant to be paired with the Home Advantage loan as well as down payment assistance.

Eligibility requirements:

  • Household income must be under $145,000
  • Minimum credit score requirement of 620
  • Must purchase a new home that exceeds Washington energy efficiency standards by 15%, or an older home that can be upgraded to increase its energy efficiency by at least 10%

Learn more

Rate shopping tips

If your goal is saving money on a home in Washington this year, you’ll want to look for ways to score your best rate possible. Consider these tips as you begin your search for a new home and mortgage loan.

Check your credit score

Since credit scores play such a huge role in qualifying for a mortgage — and the rate you’ll pay — it makes sense to check your credit score before you begin shopping around for a new mortgage. Fortunately, it’s easy to check your credit score online and from the comfort of your home.

Compare rates with at least 3 lenders

You don’t want to go with the first lender you come across. Take time to compare interest rates and mortgage terms with at least three lenders, and be sure you give them all the same information so you’re able to make a fair comparison. It’s also important to contact all three lenders on the same day, as rates can fluctuate from day to day. When you spend time comparing offers, you ensure you’re not paying a higher interest rate than you have to.

See how lender fees stack up

Also, make sure to ask about lender fees, such as underwriting fees or discount points. These fees can vary from lender to lender, and they can make a big difference in the total cost of your loan.

Consider programs for Washington residents

If your income is low enough and you want help with your down payment, make sure to consider some of the programs for first-time homebuyers in Washington. These programs can help you purchase a home with lower out-of-pocket costs if you meet specific income requirements.

Know when to lock in your rate

Finally, don’t forget to ask your lender about locking your rate. Doing so will ensure you have a guaranteed interest rate that won’t rise with the whims of the market. Keep in mind, however, that rate locks don’t last forever. A rate lock typically only lasts for up to 120 days, although 30 to 60 days is most common.

The information in this article is accurate as of the date of publishing.