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Home buyers in the state of Washington have a lot of options when it comes to mortgage financing. We have covered many of those options in previous blog posts.
Today, we will focus on the most popular type of mortgage loan for Washington home buyers: the conventional 30-year fixed-rate mortgage.
As a home buyer, you have a lot of choices to make when it comes to the type of loan you want to use. You also have “choices within choices,” since all of the major mortgage programs offer different versions and varieties.
For example, you could choose a government-backed FHA loan with a 15-year repayment term, a 5-year adjustable-rate mortgage (ARM), or a conventional loan with a 30-year term. And that only scratches the surface. The point is, there are many different ways to structure your mortgage financing when buying a home.
But there’s one specific type of mortgage loan that rises to the top, in terms of popularity. Most home buyers in the state of Washington end up choosing the conventional 30-year fixed-rate mortgage loan when buying a house. So let’s explore the reasons why.
According to an analysis conducted by the National Association of Homebuilders (NAHB), conventional loans “financed 77.8% of new home sales in the fourth quarter” of last year. The FHA loan program came in at a distant second with 8.9% of market share, followed by VA loans at 6.3%. All-cash purchases made up the remainder of home sales during that quarter.
In addition to deciding between conventional or government-backed mortgage loans, you can also choose the length of the repayment term. And here again, there’s one option that stands out as being the most popular among Washington home buyers. That’s the 30-year mortgage.
According to the industry journal Mortgage Professional America: “About 90% of home buyers choose a 30-year fixed-rate loan, making it the most popular mortgage type in the country.”
Put these two components together and you have the conventional 30-year fixed rate mortgage loan, the most popular type of home loan in the state of Washington. Now, let’s take a closer look at the individual components and benefits they provide.
Conventional mortgage loans are home loans that are not insured or guaranteed by a government agency, such as the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA). These loans are typically offered by private lenders and follow guidelines set by Fannie Mae and Freddie Mac.
FHA and VA loans certainly have their benefits as well, including the ability to put little or no money down. But the truth is that most home buyers in Washington choose conventional mortgage financing when buying a house.
In terms of the length and interest rate structure, the 30-year fixed rate mortgage is the most popular type of home loan among home buyers in Washington. With this option, the borrower’s interest rate remains constant for the entire 30-year term. Many borrowers find this appealing.
There are two important points to take away from this article: (1) You have a lot of different choices to consider when it comes to your mortgage financing, and (2) they all have pros and cons associated with them.
The 30-year fixed-rate conventional home loan is clearly the most popular choice among home buyers in the state of Washington. But it might not be the best product for you. It depends on your budget, your down payment, and your long-term plans regarding the home you’re purchasing. Every borrowing scenario is different, because every borrower is different.
This underscores the importance of speaking to a knowledgeable mortgage professional, before making any final decisions. Our loan experts have a wealth of experience and knowledge and can help you choose the right type of mortgage for your particular situation!
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.