August 5, 2021

7 Secrets to Buying a House in the Tacoma Housing Market

Thinking about buying a house in Tacoma, WA this year?

Tacoma is becoming an increasing popular choice for Washington State home buyers. Both for those considering moving out of Seattle, and those moving in state from California and beyond. As well as those who have been renting locally and are ready to own their own space. So, what secrets and tips can help you get a great deal on your own home here?

Don’t Wait

The sooner you buy your own home the better. If you have been renting, there are many advantages to homeownership you have been missing out on. Start putting them on your side.

If you own and are looking to relocate, move up or downsize, then waiting seems to almost invariably make buying a home more expensive. Even for those earning strong six figure salaries it is almost impossible to save up a larger down payment in line with how fast house prices grow. 

Tacoma home prices more than doubled between 2012 and 2020. Zillow has predicted they will rise almost another 10% in 2021. 

If home loans are available, take advantage of them. There is no guarantee that a mortgage will be this easy to get in another year or two. Interest rates can also go up far more than most expect. A rate hike of just a couple percentage points may add six figures to the cost of buying your home. 

Explore New Neighborhoods

Keep your options open as you begin your home search. Learn about Tacoma’s different neighborhoods and suburbs. You may find there is a lot more on offer than you expected. Even just a few blocks away can make a big difference in taxes, house prices, how much space you get for your money, and the long term value of that property. 

Look around for the areas that give you the best combination of lifestyle and value, before you resign yourself to a bigger mortgage than you are comfortable with, or sacrifice what you want most in a home.

Know Your Loan Options

By using a great local mortgage broker you will find you might have lots of choices of loan programs, features and terms to pick from. You can use these to make qualifying and closing on your home easier. To reduce your upfront cash out of pocket, or to greatly reduce your payments and the overall cost of buying and owning a home. 

There are also special programs for first time home buyers, key workers, veterans and others.

Find Out About No & Low Down Payment Options

Many would be homebuyers sit on the sidelines and get priced out of the market because they wrongly think they need a bigger down payment. That isn’t always true. There are a variety of low and even no down payment mortgage loan programs and other forms of help to get you into a home sooner.

There are VA and USDA home loans which provide 100% financing with no down payment. There are 80/10 and 80/20 loans for avoiding PMI with a smaller or no down payment, even if you need a jumbo mortgage loan.

Your employer may also be a great resource to tap. If you have a 401k or IRA, you may be eligible to borrow or withdraw a portion of that with no penalties if you are using it to buy a home. Many employers also have budgets for relocation help. They may rarely advertise them, but you might be surprised if you ask. 

Even conventional and FHA loans can offer down payments as low as 3.5% to 1%. 

There are also often state and local down payment assistance programs and grants to help you buy a home. Sometimes this money doesn’t even need to be repaid. 

Be Willing To Do Some Updating

It is true that not many mortgage lenders want to finance severely damaged homes with roof and foundation issues. However, you can find great financing and sometimes much better house prices if you are willing to do a few improvements after the sale.

You can take the DIY route to decorating and home improvements on the weekends. Or use the money you saved by buying a cheaper home and find a great contractor to help. 

In this area, homes without AC or that are older can offer some appealing bargains.

Get Approved For A Loan First

Don’t go house shopping and then try to find a loan that matches. That is a recipe for frustration. 

Instead, streamline your search by getting pre-approved for a mortgage loan first. Then you’ll know your budget and can shop with confidence, and move fast when you find ‘the one’ so that you don’t miss out on it. 

Stay Focused

Stay focused in your home search. Don’t let it become a drawn out mission you spend months on. Make a very short list of your top 1-3 must-haves in your new home. When you find a match, make your offer. Any nice to haves you get on top are the icing on the cake.

About the author 

Joe Tafolla

Helping Pacific Northwesterners buy their dream homes for over 15 years. Founder of Tacoma Mortgage Brokers and Seattle's Mortgage Broker and author of Homeownership Simplified: The Truth about ZERO Down.

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