Are you looking to buy a home in Yakima, Washington? With so many options for home loans and lenders, it can be overwhelming to know where to start. This comprehensive guide will walk you through everything you need to know about getting a home loan in Yakima, from types of loans and rates to lenders, the home buying process, and frequently asked questions.
Types of Home Loans Available in Yakima
When applying for a home loan, you’ll first need to decide what type of loan is right for your situation. Here are some of the most common types of mortgages available in Yakima and throughout Washington State:
Conventional Loans – These loans are not backed by the government and meet the underwriting guidelines set by Fannie Mae and Freddie Mac. You’ll need a good credit score, a stable income, and a down payment of at least 3-20%.
FHA Loans – Insured by the Federal Housing Administration, FHA loans require lower down payments and credit scores than conventional loans. Down payments can be as low as 3.5%. These are a great option for first-time home buyers.
VA Loans – Offered by private lenders and insured by the Department of Veterans Affairs, these require no down payment or mortgage insurance for qualified veterans, active duty military, and surviving spouses.
USDA Loans – Provided by the U.S. Department of Agriculture for low to moderate-income home buyers in rural areas. These offer low-interest rates and require no down payment.
Jumbo Loans – For luxury home purchases over $647,200 (as of 2020). Jumbo loans have higher down payment requirements but may have lower rates.
ARMs – Adjustable-rate mortgages have interest rates that change over time. This can mean lower rates at first that later increase.
Fixed Rate – A fixed interest rate means your monthly payment won’t change. These provide stability but usually have higher rates.
Consider your financial situation, loan amount, and plans for the home to decide which type of mortgage fits you best.
Mortgage Rates in Yakima, WA
Interest rates on home loans in Yakima vary by lender, borrower qualifications, loan type, economic conditions, and the property itself. Here are some examples of average mortgage rates in Yakima as of August 2023:
- Conventional 30-year fixed: 5.5%
- FHA 30-year fixed: 4.5%
- VA 30-year fixed: 4.25%
- USDA 30-year fixed: 3.25%
- Jumbo 30-year fixed: 5.0%
- 5/1 ARM: 4.0%
Rates and terms will depend on your specific loan amount, credit score, debt-to-income ratio, down payment amount, and other qualifications. Be sure to shop around with multiple lenders to find the best rate available for your situation.
Top Mortgage Lenders in Yakima
There are many national banks, credit unions, and online lenders that offer mortgages in Yakima. Here are some of the top local mortgage lenders to consider:
Solarity Credit Union – This Yakima-based credit union offers competitive rates and a variety of loan programs. They have branches throughout the city for personalized service.
Gesa Credit Union – With branches across Central Washington, Gesa offers fixed and adjustable mortgages with low down payments. First-time buyer programs are available.
Academy Mortgage – This national lender with a local Yakima office provides VA, FHA, USDA, jumbo, and conventional loans with personalized guidance.
Guild Mortgage – A national lender with customized loan options, Guild has been serving Washington for over 50 years.
Noel Palmer Young Professionals Program – State Farm insurance agent Noel Palmer offers specialized mortgages for young professionals in Yakima.
KPG Lending – A mortgage broker with access to loans from various lenders can help you find competitive Yakima rates.
Be sure to get rate quotes from multiple lenders and compare all costs and fees. Ask about any home buyer assistance programs or grants they may offer.
The Yakima Home Buying Process
Now that you know about loans, here is an overview of the typical steps to buy a home in Yakima:
Get pre-approved – Most experts recommend getting pre-approved for a mortgage before you start looking at homes. This shows sellers you’re serious.
Connect with a real estate agent – A knowledgeable local realtor will help you find homes, negotiate, and navigate the buying process.
Tour homes – Once you find homes you like, schedule showings and bring your agent to view the properties and point out any issues.
Make an offer – Your agent will help determine an appropriate offer based on the home’s value and conditions. Submit your bid along with an earnest money deposit.
Negotiate terms – The seller may accept your initial offer or come back with a counteroffer. Work with your agent to negotiate terms like price, closing date, repairs, and contingencies.
Complete inspections – After an accepted offer, thoroughly inspect the property or have professionals do so. Request repairs based on inspection findings.
Secure financing – Provide all needed documents to your lender for underwriting and approval. Ensure your loan is on track to close on time.
Close on the home – Finally, sign all your closing documents and pay closing costs and down payments. Get the keys and move into your new Yakima home!
Having a trusted real estate agent and mortgage lender on your side makes buying a home in Yakima much smoother.
Yakima Home Loans: FAQ
Here are answers to some frequently asked questions about getting a home loan in the Yakima area:
How much house can I afford in Yakima?
This depends on your income, debts, and down payment amount. A general rule is your monthly mortgage payment (including taxes and insurance) shouldn’t exceed 28% of your gross monthly income. Mortgage calculators can estimate your price range.
What credit score do I need for a Yakima home loan?
The minimum credit scores for conventional loans are usually around 620. FHA loans can be secured with scores as low as 580. The higher your credit score, the better mortgage rates you’ll qualify for.
How big of a down payment do I need in Yakima?
Conventional loans typically require at least 3-20% down. FHA loans allow down payments as low as 3.5%. VA and USDA loans require no down payment for those who qualify. The more you put down, the better the rates.
What are the closing costs on a Yakima home purchase?
Closing costs range from 2-5% of the total loan amount. They include origination fees, appraisal fees, title insurance, taxes, and other costs. Your lender will provide a full estimate of closing costs.
Should I use a mortgage broker or go directly to a lender?
Brokers have access to wholesale lenders and can help find you the lowest rates. But they charge fees, so compare costs vs. going directly to a major bank or credit union.
What documents do I need to apply for a mortgage in Yakima?
Standard documents include W-2s, pay stubs, tax returns, bank statements, IDs, and letters verifying any additional income like bonuses or gifts. Provide all required paperwork upfront for faster processing.
How long does it take to close on a home loan in Yakima?
Once your offer is accepted, it usually takes 30-60 days to close, though it can be longer. Communicate closely with your lender to avoid delays.
Finding the right loan for your home purchase in Yakima doesn’t have to be difficult, especially when you understand the basics. Just be sure to work with reputable lenders, get pre-approved, and ask plenty of questions so you can make informed mortgage decisions.