Washington Mortgage Guide

$600K median statewide, but that number hides a massive split. Seattle proper averages over $850K — Bellevue and Mercer Island push past $1.5M. Drive 30 minutes south to Tacoma and you're looking at $450K. Olympia, the state capital, sits around $420K. The real surprise is Spokane on the east side: $380K median, genuine four-season city, and growing fast as remote workers price themselves out of the west side.

It's a seller's market on the Puget Sound side — homes in desirable Seattle neighborhoods still move in under two weeks with multiple offers. East of the Cascades is more balanced. Inventory has loosened slightly from the pandemic frenzy, but don't expect bargains in King County anytime soon. The tech sector (Amazon, Microsoft, Meta) anchors demand, and Washington's lack of state income tax keeps attracting high earners from California and Oregon.

Property taxes run 0.98% statewide, but King County assessments can surprise you — a $750K home might owe $7,800/year. Budget accordingly.

The Washington State Housing Finance Commission runs the Home Advantage program, and it's probably your best shot if you're buying for the first time. You get a 30-year fixed rate loan with as little as 3% down, plus you can stack on the Down Payment Assistance Loan—basically up to 5% of your purchase price as a separate loan to cover your down payment and closing costs.

Here's the catch: that second loan isn't free money. It's a silent second mortgage at 0% interest that sits there until you sell, refinance, or pay off your first mortgage. Then you owe it back in full. So if you take $15,000 to help with your down payment in Spokane and sell three years later, that $15,000 comes due when you close.

Income limits apply based on county and household size, and they're stricter in King County versus somewhere like Yakima. You'll need to take a homebuyer education course too—it's online, takes a few hours, but it's required before you close.

The House Key Opportunity program is another option worth checking if you're in Seattle or Tacoma where prices are brutal. It works similarly but has different rate structures and sometimes better terms depending on when you're buying.

Both programs require you to use the home as your primary residence. No buying a place in Bellingham to rent out while you stay in Seattle.

Start at wshfc.org to see current rates and check if you qualify based on where you're buying. Rates and program details shift, so what's available now might be different in three months.

Here's what actually catches people: Washington has a Mortgage Broker Practices Act that requires lenders to give you a "good faith estimate" of closing costs within three days of application, but more importantly, the state caps how much lenders can charge you upfront. They can't collect more than $700 in fees before you get that formal loan estimate. Sounds small, but it matters if you're shopping around—you won't get nickel-and-dimed just to get quotes from multiple lenders.

The bigger surprise is the excise tax at closing. Washington doesn't have state income tax, so they get you on the back end. When you sell (not buy, thankfully), you're paying 1.28% to 3% of the sale price depending on the county and price point. In King County, on a $600,000 house, that's around $7,680 minimum. Seattle itself adds another 2% on sales over $1.5 million. Just something to factor in long-term if you're planning to move in a few years.

One more thing: Washington uses deeds of trust instead of mortgages, which means foreclosures are non-judicial and move fast. Roughly 120 days from missed payment to auction. The upside is you get a 30-day notice before anything happens, and Washington has solid reinstatement rights during that window.

Washington has no state income tax, which sounds great until you realize the state makes it up with a 10.25% sales tax in Seattle and one of the highest real estate excise taxes (REET) in the country. When you sell — not buy — you'll owe 1.1% to 3% of the sale price to the state. But at purchase, buyers sometimes forget about REET because it's typically the seller's cost.

The gotcha that catches transplants: Washington is a community property state. If you're married, both spouses go on the deed by default, and both must sign at closing — even if only one is on the mortgage. Lenders and title companies will refuse to close without both signatures. Plan for this if one spouse is traveling or deployed.

Also, west-side homes built before 1980 often have oil tank issues. Get a decommission cert or you'll deal with DEQ cleanup — $5K to $30K depending on contamination.