Washington Home Mortgage Tips: 100% Home Mortgage with No Money Down

September Northwest Multiple Listing Service (NWMLS) figures for the Pacific Northwest housing market indicate a 41% higher inventory, but also higher prices. Pending sales dropped 18.5% compared compared to the record-setting pace of 2005, with every county reporting fewer transactions. However, according to the September NWMLS report, six Washington counties reported single-digit price increases and nine still had double-digit gains.

David Lereah, chief economist of the Realtors group, predicted prices would continue to decline until next year, but that the development is "healthy" because it will make homes more attractive to buyers and help to boost sales. Declining interest rates could also help spark increased Washington home buying activity for popular areas like Seattle, Tacoma, Spokane, Bellvue and other nice communities.

With declining median prices and lower interest rates, now may be the time for buying your first home or financing a second home in Washington before the market rebounds. With prices declining, you may even be able to purchase a nice home without having to resort to getting a jumbo loan (a non-conforming loan that's above the 2006 $417,000 Fannie Mae and Freddie Mac lending limits). Get a fixed interest rate loan rather than an adjustable rate loan or an interest-only loan, so you won't have to worry about interest rate hikes or rising monthly payments. If you're looking to buy a second home or investment property, take advantage of declining rates by getting a home equity loan to secure the funds for the down payment.

First-time buyers, do you have enough money for a down payment?
While housing prices have declined, the median price for a Washington home is still over $350,000 in many areas, and you'll need around $70,000 for the 20% down payment. Many first-time home buyers have enough money for the house payments, but not enough for a 20% down payment. You'll have to pay private mortgage insurance (PMI) until your house builds at least 20% equity if you buy a house with less than 20% down. And, PMI only benefits lenders by protecting them in case you default on the loan. There are no benefits for home buyers.