Money’s Top Picks
The Pacific Northwest has long been a popular destination for interstate movers, with U.S. Census Bureau data showing Washington as one of the top ten states for relocation for the last five years. Its temperate climate, abundant outdoor activities, and lack of a state income tax are all enticing to inter-movers. But there might not be a more enticing feature than a well-paying job.
Tech companies such as Amazon and Microsoft, as well as aerospace manufacturer Boeing all call Washington home, providing a booming market of high-paying jobs. Washington’s median annual household income as of 2018 was $74,073, well above the national median of $61,937. Washington also has the highest minimum wage of any state in the country as of 2020 at $13.50 an hour.
All this has led to very active housing markets in Washington, particularly in the city of Seattle and the surrounding county. Median sale prices in Washington have doubled from $204,000 in 2012 to $408,000 in 2020. In Seattle, the median sales price for February 2020 was $705,000. Of the 50 most populous American cities, only the California foursome of San Francisco, Oakland, San Jose, and Los Angeles have a higher median sales price.
Unfortunately, the coronavirus pandemic has taken its toll on the state’s economy, just as it has across the globe. According to Washington’s Employment Security Department, the state’s unemployment rate reached a staggering 16.3% in April, almost 12 percentage points higher than in the same month last year and higher than the national rate of 14.7%. Although partial reopenings and easing of restrictions helped unemployment go down, it still sits at 9.8%, numbers not seen since the Great Recession of the last decade.
After recording the first coronavirus case in the country, Washington’s outbreak seemed to be under control earlier in the summer. But an uptick in cases during July put reopening plans on hold. In this landscape, it’s difficult to pinpoint when we can talk about economic recovery.
Recent forecasts do predict a cooling in Seattle’s real estate market, with COVID-19 a likely culprit. This could be an opportunity for buyers with the means to purchase properties. Even though lenders are raising requirements for jumbo loans, it’s still true that mortgage rates are at all-time lows.
From San Juan Island to the Columbia River, these are the best mortgage lenders for Washington.
More on Money’s Top Picks
Veterans United: Best for VA Loans
Veterans United has been the nation’s number one provider of VA loans by total volume for two years running, a salient fact when we consider that Washington has a higher VA loan percentage than the national average. For this reason, Veterans United is one of our choices for best mortgage lenders in Washington.
Veterans United only has one branch in Washington state. That being said, Veterans United still ranks as one of the best companies for customer experience, according to the J.D. Power Primary Mortgage Origination Satisfaction Study. The company has phone representatives available 24/7, to better serve military members overseas.
Another advantage that Veterans United provides its members is a comprehensive website that contains all sorts of tools and resources to inform homebuyers during the mortgage process such as calculators, educational courses, and a glossary of common mortgage terms.
Veterans United’s Lighthouse Program is a unique feature that provides assistance to service members unable to qualify for a VA loan. The free program connects service members with credit repair professionals who can help correct errors in credit reports and come up with ways to fix and strengthen their credit.
Chase Home Lending: Best for Jumbo Loans
Six percent of loan originations in Washington are for jumbo mortgages, compared to a 4.9% national average. (Only California, Hawaii, New York and Massachusetts had a larger share.) For this reason, we picked Chase as a proven lender who can offer jumbo loans among its variety of products.
Chase Home Lending was the second-largest jumbo loan originator in 2018 in both the U.S and in Washington, with almost 7% of jumbo loan originations in the state. Chase also has a high volume of refinance originations, another popular loan type in Washington.
One of the main advantages of selecting a large national lender such as Chase, is that customers who already have financial instruments with the institution can take advantage of exclusive benefits. For instance, Chase Private Clients can participate in the Chase Mortgage Rate Program which provides varying rate discounts from 0.125% to 0.25%, depending on the customer’s deposit or investment amounts. (Though it should be noted that to qualify as a Chase Private Client, customers need to maintain an average daily balance of $250,000 or more.)
Other existing Chase customers can also take part in the Chase Closing Guarantee, which promises a closing in as little as three weeks or the customer gets $2,500. When all is said and done, these programs can provide significant savings.
Chase ranks as “About Average” in J.D. Power’s U.S. Primary Mortgage Origination Satisfaction Study, not as high as other large companies, but still solidly in the top ten.
Quicken Loans: Best for Mortgage Refinancing
Homeowners might consider refinancing their mortgage for a variety of reasons such as shortening the loan term or reducing their monthly payment, all the more so with mortgage rates historically-low.
According to the Mortgage Bankers Association data on loan origination volume, Quicken Loans is first in mortgage refinance in Washington, handling over 11% of refis in the state for 2018.
In addition to customary 15- and 30-year loans, Quicken offers their exclusive YOURgage program, with a term length you get to choose, anywhere from 8 to 30 years. This is especially useful for borrowers who can and want to pay off their mortgage quicker than the traditional 15 or 30 years, while possibly saving some money from interest payments. Quicken also caters to those who want to refinance an investment property, perhaps to use the equity to buy additional property.
Where Quicken Loans really stands out is in their customer experience. It has rated as the number one company in customer satisfaction for 10 consecutive years in J.D. Power’s U.S. Primary Mortgage Origination Satisfaction Study.
Quicken’s website is an easy-to-use resource, with a detailed refinance guide and calculator, as well as explanations for the different situations when a refinance makes sense. Rocket Mortgage is Quicken’s online tool where borrowers provide their information and receive custom recommendations with actual interest rates and payments.
How We Picked the Best Mortgage Lenders in Washington
When determining the best mortgage companies for Washington state, we wanted to focus on lenders who offered a broad range of mortgage products. Washington’s percentages of mortgage refis, jumbo and VA loans are higher than the national average, so we looked at companies that stood out in these areas.
We used the methodology developed for our Best Mortgage Lenders of 2020 as the foundation for our search. This includes using 2018 loan origination data provided by the Mortgage Bankers Association, customer satisfaction data from JD Power’s 2019 U.S. Primary Mortgage Origination Satisfaction Study, and regulatory and complaint information from the Consumer Financial Protection Bureau and the Nationwide Mortgage Licensing System.
The MBA report includes origination volume for TK# lenders nationwide, as well as state-by-state. Further, the report provides average loan amounts and the types of loans being originated. (We supplemented VA loan information with the VA’s list of lenders by volume.) We focused not just on the size or mortgage volume of the lender, but on its product offerings, particularly refinance, jumbo and VA loans.
JD Power’s 2019 U.S. Primary Mortgage Origination Satisfaction Study measures customers’ overall satisfaction with a lender.
We analyzed a company’s reputation by checking complaints registered with the CFPB against each mortgage lender, as well as regulatory actions reported by the NMLS. We analyzed the number of complaints against that lender’s mortgage volume to calculate the percentage of grievances. Lenders with significant regulatory actions or sanctions were downgraded.
All this information helped us narrow down our search and come up with a preliminary list for the best mortgage companies in Washington. We then focused on these considerations: product offering, customer experience, and the lender’s reputation and transparency.
Lenders that offer a wide variety of loan types at different term lengths can cater to a wider audience of potential borrowers. This is true of any state, but Washington in particular has a higher-than-national-average number of refinances, jumbo and VA loans. We therefore focused on lenders that could satisfy these requirements.
Apart from competitive rates and a varied product line, lenders need to stand out through the quality of service provided. That is, how well the company helps borrowers navigate the murky depths of the mortgage process.
Convenience and ease-of-use are key. Having accessible customer representatives via different channels (phone, chat, email, or in-person) and an easy-to-navigate website that offers tools and resources are just some of the components of a balanced, valuable customer experience.
Lenders can also rise above competitors by delivering quick applications and closings. By focusing on electronic signings instead of the traditional paperwork, lenders can expedite the mortgage process, a welcomed option during these COVID-19 times.
Reputation & Transparency
A company’s reputation is determined by the way it treats customers and business partners. CFPB complaints tell us how many customers have raised issues concerning the lending practices of each company, while the NMLS reveals any regulatory actions that respond to a lender’s failings or wrongdoings.