How Financing a Real Estate Transaction Works
When you start the exciting journey of purchasing a home here in Seattle, Tacoma or Gig Harbor Washington, understanding the financing process is crucial. Whether you're a first-time buyer or a seasoned investor, knowing how different loan types work — and what happens behind the scenes during underwriting and appraisal — can make a major difference in your confidence and success. Let’s break it down: Loan Types: FHA, Conventional, and VA Loans FHA Loans : Backed by the Federal Housing Administration, FHA loans are a popular choice for first-time homebuyers. They typically require lower down payments (as low as 3.5%) and have more flexible credit score requirements. However, they come with mandatory mortgage insurance premiums (MIP), which add to your monthly payment. Conventional Loans : These are not government-backed and often require higher credit scores and down payments (usually 5–20%). The big advantage? If you put down at least 20%, you can avoid paying Private Mortgage ...