Residents of Washington appreciate the myriad of reasons to build and maintain their roots in this state. Vibrant metropolitan areas, unparalleled natural scenery, and outdoor recreation opportunities abound.
When it comes to making financially beneficial decisions, homeowners naturally consider refinancing in Washington (WA) as a viable option in the current climate of low interest rates and varied mortgage products. Additionally, residents who have improved their credit scores over the years with judicious handling of personal finances stand to better the terms of a residential loan by investigating mortgage refinance rates in Washington state.
Refinancing options in Washington
Common types of refinancing packages include fixed rate, adjustable rate, government-backed loans or home equity products.
Fixed rate loans are useful for homeowners who need stability and assurance when setting a budget. Once you secure your loan terms with a fixed rate mortgage, they will not change during the life of your loan unless you refinance. Fixed rate mortgage come in different loan terms. The most popular being 10, 15, 20, and 30-year lengths. The shorter the loan term, the less you’ll pay in interest, but the higher your monthly payments will be.
Adjustable rate mortgages vary with the market value. Most often ARM loans are offered as 3/1, 5/1, or 7/1 products. This means for the first portion of your loan, you will have a fixed interest rate. After the initial period of time, you will be subject to market rates for interest. If interest rates increase, so will your loan payments. Similarly, if market rates decrease, so will your interest rate. ARM loans are useful for homebuyers who are nearing the end of their initial loan terms and are looking to capitalize on a lower interest rate for the remaining time. They can also be a smart strategy for anyone who is looking to sell their home soon.
Government-backed loans tend to come with more relaxed qualifying terms. If you have some work to do on your credit score, consider a government-backed loan. In most cases, you’ll still be able to qualify with a credit score hovering in the 600’s. Read on to learn more about the types of government-assisted loans available.
The housing market in Washington has steadily climbed since 2012. Many homeowners could have a substantial amount of equity on their home. (Photo/University of Washington)
Government-assisted Washington refinancing programs
Due to legislation aimed at lightening the mortgage burden for struggling homeowners, some Washington residents may benefit from refinancing their Fannie Mae or Freddie Mac mortgages.
A selection of adjustable rate mortgages (ARMs) are available through these government-assisted programs, all of which share the following characteristics:
- A low interest rate and monthly payment for the first 10 years of the mortgage
- After the first 10 years, an adjustable interest rate within preset limits
Families that are just starting out on their career paths will benefit from the initial 10-year period in which to reach a higher level of income and enhance their ability to adapt once their ARM reverts to market interest rates.
VA loans are also government-backed products. If you’re active duty, retired military, or a spouse of someone in the military, you might qualify for a VA loan. VA loans, especially when offered by special credit unions like USAA, can offer lower interest rates that with conventional loans. Most government-backed loans also offer flexibility with loan-to-value ratio and creditworthiness.
Washington state home equity products
Median home values across the nation declined around 2012. Similarly, in most areas, the value has started to pick up again. According to Zillow, Washington state is no different. It is expected that median home prices in Washington will rise to $349,000 by 2018.
Depending on when you purchased your home, you may be in a position where the market value is higher than the price you paid, and assuming you’re current with your mortgages, this means refinancing could be very attractive to you.
Homeowners in this case, who have accrued equity over the life of their mortgages, often consider a Washington state home equity loan as a smart choice in refinancing. While technically they are adding a second loan rather than refinancing their primary mortgage, a no- cost or low-cost home equity loan allows families to re-invest a portion of their equity in home improvements, additions, or renovations that will add value to their properties.
How to find the best 30-year refinance rates in Washington
The best place for a family to start looking for the lowest home mortgage rates for refinancing is the bank holding its existing mortgage. Some financial institutions offer perks for current customers taking on a new product with them. Wells Fargo, for instance, offers a streamlined process for its existing mortgage customers. This process means less paperwork, and an easier qualification process.
Local companies are another great sources for the lowest refinance mortgage rates in Washington state. Credit unions and community banks often reward their members by offeriung lower rates than regional banks.
If you get stuck, consider a mortgage broker. Though mortgage brokers take a small fee for their work, they can easily and effectively find a refinance product and lender that works best for your situation.
Final tips for refinancing in Washington
Homeowners should always consider more than one option. Take time to learn the difference between common mortgage terms, such as FHA and VA, fixed rate and variable rate. This understand will help you select the best refinancing option for your particular needs.
Having the right tools will benefit homeowners as well. Our online free mortgage and refinance calculator is indispensable in projecting the savings of any Washington refinance package.
Back to Mortgage by Area