The luxury home market in Washington, especially Seattle has always been competitive as it is varied. Home prices in Seattle have risen just over 11% in the last year, for a median home price of $927,000. On average, homes are selling in 30 days, and above the listing price.
From the modern condominium to the historic buildings downtown, Seattle is second to none when it comes to such structures. Yet financing a luxury home whether a single-family residence or a condo can sometimes be a challenge especially if the buyer has a limited down payment.
Until recently the down payment requirements were 20% with most lenders and banks offering Jumbo programs. For loan amounts exceeding $1 mil, down payment requirements can be even greater, sometimes 25% or more. All of that has recently changed with the new 10% and 5% options available today.
Let’s look at the latest Jumbo loan guidelines, buyers that have questions can reach us by calling Ph: 800-962-0677 or just submit the Quick Contact Form on this page (mobile users will find this at the bottom)
First, let’s identify what is considered a Jumbo loan in Washington state. For most of the WA, the conforming loan limit is $726,200. The exceptions are King, Pierce and Snohomish County, these are considered “high cost” counties and the limit is $891,250 for a regular 1 unit home. Please reference the complete 2023 Conforming loan limit list.
Any mortgage beyond the conforming limits would be classified as Jumbo.
95% and 90% Jumbo Financing:
- 5% down – loan amount limit is $1,500,0000
- 10% down – loan amount limit is $3,000,000
- 15%-20% down – higher loan limits exceeding $3.5m
- All programs apply to primary homes.
- All 95% and 90% LTV applicants are required to have a min 700 credit score with no serious financial hardships in the previous 5 years.
- All Jumbo programs require full income and asset documentation.
- The program applies to single-family, townhomes, and select condos.
- Single loan options and piggyback loans are available.
- Both fix rate and ARM options available. No private mortgage insurance.
Luxury home financing will most often come in the form of a fix rate or adjustable-rate (ARM) type loan. ARM’s will have an initial rate is fixed for a predetermined period. For example, a 5/1 ARM has a rate that is fixed for five years before changing into an adjustable-rate mortgage which can adjust once per year.
The adjustment is based on a pre-selected index plus a margin. The adjustment periods are limited each year from one to two percent from the previous rate to avoid wild swings in annual payments. The advantage of the adjustable-rate mortgage is the lower interest rate and is great for buyers that will own their home for a limited time.
There are also fixed-rate programs where the rate does not change during the life of the loan. The advantage of the 15-year or 30-year fix rate loan is the stability of the rate/payment that never changes.
Credit scores for luxury financing can be expected to be higher compared to conforming loans and most high-end financing asks for at least a 700 credit score for 90% and 95% LTV Jumbo loans. The lender will order credit scores from all three credit repositories of Equifax, Experian and TransUnion and use the middle score. If there is more than one borrower, the lender will use the lower middle score for qualifying purposes.
Questions? Please call us at the number above. Serving home buyers nationwide including Washington: Seattle, Spokane, Tacoma, Vancouver, Bellevue, Kent, Everett, Renton, Yakima, Federal Way, Spokane Valley, Kirkland, Bellingham, Kennewick