The Numbers

DOWN PAYMENT

  • Down payments can range from zero down to 99% down
  • Certain government loans like VA or USDA can be obtained with zero down
  • FHA loans require as little as 3.5% down, but incur private mortgage insurance (PMI)
  • Conventional loans can be had for 5% down or more
  • Buyers putting down 20% or more on a conventional loan do not pay PMI
  • Every borrower’s situation and circumstances are different and the lender will advise the best loan option

LOAN AMOUNTS BY TYPE

FHA Loan Limits – 2017

Each year, HUD reviews the FHA loan limits for counties across the country, and compares them to median home prices. Sometimes the limits are kept the same from one year to the next. But when home prices rise considerably over the course of a year, the FHA loan caps can be increased to keep up with appreciation.
One-Family Two-Family Three-Family Four-Family
King County $592,250 $758,200 $916,450 $1,138,950
Pierce County $592,250 $758,200 $916,450 $1,138,950
Snohomish County $592,250 $758,200 $916,450 $1,138,950

VA Loan Limits – 2017

Loan limits for a single family home – $0 down and up to:
King County Pierce County Snohomish County
$592,250 $592,250 $592,250

Jumbo Loan Minimum- 2017

Anything in excess of the below is considered a jumbo loan
King County Pierce County Snohomish County
$592,250 $592,250 $592,250

MONTHLY PAYMENT

  • A monthly payment typically includes principal, interest, insurance, and taxes
  • Qualification limit is based on your debt to income ratio (DTI)
  • Annual income, debt/monthly payments, down payment, taxes, interest rate, homeowner’s insurance, HOA dues, and mortgage insurance (when required) are all used to calculate what you can afford
  • A standard rule of thumb is that your monthly payment (principal, interest, taxes, and insurance) should not exceed 28% of your monthly gross income.
  • The lower your debt to income ratio the happier the lender as it shows you have a good balance between income and debt.
  • Your combined debts (housing + other debt) should not exceed 36% of your gross income and can be as high as 43% or so if obtaining an FHA loan

CLOSING COSTS

  • These are the costs of transferring property ownership
  • They include lender fees, escrow company fees, recording fees, and title fees
  • This is in addition to your down payment and any other prepaid items like property taxes and homeowner’s which you pay ahead to pad your reserves
  • Assume about 3% above and beyond your down payment minus earnest money

See Guide to Closing Costs for more details and an itemized list of what the buyer and seller each pay