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Washington State’s Mortgage Loan Closing Process: An In-Depth Guide

Your offer’s been accepted, and you’re itching to sign on the dotted line and get those keys in hand.

But first, the closing process.

Closing in Washington isn’t unduly complicated, but there’s still a myriad of steps and dependencies. Some of them are specific to our state.

Below, we’ll walk you through what most Washington homebuyers can expect.

As always, your agent and lender can advise on any requirements that are unique to your property and loan terms.

1. Loan Approval and Clear-to-Close

First and foremost, your lender will dig into the last several years of your financial life. Just like you would research a company before buying its stock, so the lender needs to understand your financial position before committing to a loan.

They’ll do this with the help of an underwriter: a third party (usually) who analyzes your financial details to calculate the likelihood that you’ll repay the loan on time.

Along those lines, the lender needs confidence that the collateral—your property—is worth enough to justify the loan. That’s the main role of the appraisal. (The other role is to satisfy an appraisal contingency, but not all offers include one.)

Once everything checks out, the lender will notify you that you’re “clear to close,” meaning it’s time to proceed with the transaction.

2. Establishing Escrow

A house sale needs to satisfy dozens of conditions that come from the purchase agreement and from state laws. Some conditions are contingent upon others, and some require payment in particular amounts at particular times.

That’s a lot to keep track of, so your lender, brokerage, or title company will recommend a third-party escrow company to manage it all.

The escrow company safeguards the buyer’s and lender’s funds, monitors the requirements and contingencies of the purchase agreement, and records the deed after closing.

Note that Washington is an “escrow state,” meaning the closing process does not require an attorney. (That’s as opposed to an “attorney state” wherein—you guessed it—closing does require an attorney.)

There’s a second type of escrow account that holds funds for things like taxes and insurance. It’s a completely separate matter from the escrow we’ve discussed above. Your lender will typically manage this account and inform you of any required contributions.

3. Delivery of Closing Disclosure

After approval and at least three days before the closing date, the lender will send you a Closing Disclosure, which itemizes every cost related to the transaction.

Review it line by line, and follow up on any surprises or major variances compared to your initial Loan Estimate. Yes, it’s tedious to review, but keep in mind that any issues or inconsistencies generally can’t be adjusted after closing.

4. Final Walk-Through

You’ll have at least a day or two to walk through the property before closing. This is the time to make sure that any agreed-upon issues were fixed and no new concerns have come up.

The walk-through window is typically 24–48 hours from closing, but your agent may push for up to 5 days—especially if major repairs are involved.

5. Preparation for the Closing Meeting

Now that you’re in the home stretch, it’s time to prepare for your signing appointment.

Chiefly, you’ll need to provide funds for closing. That usually entails a cashier’s check or wire transfer, but you’ll get more specific instructions when the time comes.

You’ll also need a valid photo ID for notarization purposes.

If you’re not local, don’t worry: Washington law provides a couple of alternatives to in-person closing meetings. Common options include remote notarization, pre-signing certain documents, and power of attorney. Before making travel plans (or not), ask the title company and lender which options they offer.

6. The Closing Meeting

The closing meeting is the last milestone for most buyers. You’ll typically be accompanied by any co-signers, an escrow agent, and your real estate agent. You’ll sign a mountain of paperwork, including things like:

• A promissory note that details the terms and obligations of your loan.
• A deed of trust, giving the lender a lien against the property. (That’s because Washington is a “title theory state,” meaning you retain the title. In so-called “lien theory states,” the lender holds the title directly.)
• Property tax affidavits, which attest to the sale price.

The seller and seller’s agent may join in the meeting, but Washington law lets them sign at a separate time.

7. Disbursement of Funds

With paperwork in place, it’s time to distribute funds to all the parties involved. In Washington, the escrow officer handles the entire process, including:

• Paying off the seller’s mortgage, if applicable.
• Covering all the fees, taxes, and miscellaneous expenses associated with the transaction.
• Compensating both your and the seller’s real estate agents.
• Paying the seller any net proceeds.

8. Recording the Deed

The last major step is to record the deed with the county you’ve purchased in. This formally and officially establishes you as the new owner.

In Washington, escrow agents handle this task, too.

9. Receiving the Deed and Title Insurance

Now that the transaction is final and official, you’ll receive a copy of the deed.

It’s covered by title insurance, meaning you’re protected against any unforeseen claims or liens on the property.

10. Mortgage Servicing

Congratulations: closing is complete!

All that’s left is to settle into the regular payment cycle. Your lender or their servicer (a third party who manages payments) will tell you exactly when the first payment is due.

Wrapping up

The mortgage closing process in Washington State is complex but systematic.

Your agent, lender, title company, and escrow officer know the process inside and out. Lean on them for guidance at every step of the way. Don’t hesitate to ask questions if you’re confused about what’s happening or why.

With good communication, and a heap of patience, you’ll be settled in your new home before you know it!

2023 FHA Loan Limits for Counties in Washington State

FHA loans are limited to certain amounts that reflect the type of property, its location, and the nationwide conforming loan limit.

To help you plan, we’ve compiled all the FHA limits in Washington State, followed by a quick explanation of exactly where these figures come from.

Disclaimer: We strive to keep this table up to date, but FHA loan limits can change at any time without prior notice. Before making any financial decisions, consult with a mortgage expert or refer to the HUD website for up-to-the-minute amounts.

Washington FHA Loan Limits by Country & Property Type

County Name	MSA Name	One-Family	Two-Family	Three-Family	Four-Family	Median Sale Price	Last Revised	Limit Year
Adams	Othello, WA	$472,030	$604,400	$730,525	$907,900	$277,000	01/01/2023	CY2023
Asotin	Lewiston, ID-WA	$472,030	$604,400	$730,525	$907,900	$310,000	01/01/2023	CY2023
Benton	Kennewick-Richland, WA	$472,030	$604,400	$730,525	$907,900	$400,000	01/01/2023	CY2023
Chelan	Wenatchee, WA	$506,000	$647,750	$783,000	$973,100	$440,000	01/01/2023	CY2023
Clallam	Port Angeles, WA	$472,030	$604,400	$730,525	$907,900	$386,000	01/01/2023	CY2023
Clark	Portland-Vancouver-Hillsboro, OR-WA	$672,750	$861,250	$1,041,050	$1,293,750	$585,000	01/01/2023	CY2023
Columbia	Non-Metro	$472,030	$604,400	$730,525	$907,900	$210,000	01/01/2023	CY2023
Cowlitz	Longview, WA	$472,030	$604,400	$730,525	$907,900	$364,000	01/01/2023	CY2023
Douglas	Wenatchee, WA	$506,000	$647,750	$783,000	$973,100	$440,000	01/01/2023	CY2023
Ferry	Non-Metro	$472,030	$604,400	$730,525	$907,900	$138,000	01/01/2023	CY2023
Franklin	Kennewick-Richland, WA	$472,030	$604,400	$730,525	$907,900	$400,000	01/01/2023	CY2023
Garfield	Non-Metro	$472,030	$604,400	$730,525	$907,900	$246,000	01/01/2023	CY2023
Grant	Moses Lake, WA	$472,030	$604,400	$730,525	$907,900	$300,000	01/01/2023	CY2023
Grays Harbor	Aberdeen, WA	$472,030	$604,400	$730,525	$907,900	$274,000	01/01/2023	CY2023
Island	Oak Harbor, WA	$575,000	$736,100	$889,800	$1,105,800	$500,000	01/01/2023	CY2023
Jefferson	Non-Metro	$472,030	$604,400	$730,525	$907,900	$180,000	01/01/2023	CY2023
King	Seattle-Tacoma-Bellevue, WA	$977,500	$1,251,400	$1,512,650	$1,879,850	$850,000	01/01/2023	CY2023
Kitsap	Bremerton-Silverdale-Port Orchard, WA	$563,500	$721,400	$872,000	$1,083,650	$490,000	01/01/2023	CY2023
Kittitas	Ellensburg, WA	$474,950	$608,000	$734,950	$913,350	$413,000	01/01/2023	CY2023
Klickitat	Non-Metro	$472,030	$604,400	$730,525	$907,900	$250,000	01/01/2023	CY2023
Lewis	Centralia, WA	$472,030	$604,400	$730,525	$907,900	$344,000	01/01/2023	CY2023
Lincoln	Non-Metro	$472,030	$604,400	$730,525	$907,900	$279,000	01/01/2023	CY2023
Mason	Shelton, WA	$472,030	$604,400	$730,525	$907,900	$330,000	01/01/2023	CY2023
Okanogan	Non-Metro	$472,030	$604,400	$730,525	$907,900	$240,000	01/01/2023	CY2023
Pacific	Non-Metro	$472,030	$604,400	$730,525	$907,900	$230,000	01/01/2023	CY2023
Pend Oreille	Non-Metro	$472,030	$604,400	$730,525	$907,900	$95,000	01/01/2023	CY2023
Pierce	Seattle-Tacoma-Bellevue, WA	$977,500	$1,251,400	$1,512,650	$1,879,850	$850,000	01/01/2023	CY2023
San Juan	Non-Metro	$497,950	$637,450	$770,550	$957,600	$129,000	01/01/2020	CY2023
Skagit	Mount Vernon-Anacortes, WA	$545,100	$697,800	$843,500	$1,048,300	$474,000	01/01/2023	CY2023
Skamania	Portland-Vancouver-Hillsboro, OR-WA	$672,750	$861,250	$1,041,050	$1,293,750	$585,000	01/01/2023	CY2023
Snohomish	Seattle-Tacoma-Bellevue, WA	$977,500	$1,251,400	$1,512,650	$1,879,850	$850,000	01/01/2023	CY2023
Spokane	Spokane-Spokane Valley, WA	$472,030	$604,400	$730,525	$907,900	$383,000	01/01/2023	CY2023
Stevens	Spokane-Spokane Valley, WA	$472,030	$604,400	$730,525	$907,900	$383,000	01/01/2023	CY2023
Thurston	Olympia-Lacey-Tumwater, WA	$546,250	$699,300	$845,300	$1,050,500	$475,000	01/01/2023	CY2023
Wahkiakum	Non-Metro	$472,030	$604,400	$730,525	$907,900	$290,000	01/01/2023	CY2023
Walla Walla	Walla Walla, WA	$472,030	$604,400	$730,525	$907,900	$394,000	01/01/2023	CY2023
Whatcom	Bellingham, WA	$603,750	$772,900	$934,250	$1,161,050	$525,000	01/01/2023	CY2023
Whitman	Pullman, WA	$472,030	$604,400	$730,525	$907,900	$372,000	01/01/2023	CY2023
Yakima	Yakima, WA	$472,030	$604,400	$730,525	$907,900	$310,000	01/01/2023	CY2023

Source: https://www.hud.gov/program_offices/housing/sfh/lender/origination/mortgage_limits

What Determines FHA Loan Limits?

First, the Federal Housing Finance Agency (FHFA) sets a limit for “conforming loans.” These are conventional mortgages via Fannie Mae and Freddie Mac.

Then, the FHA sets its nationwide “floor” and “ceiling” to 65% and 150% of the FHFA limit, respectively.

Finally, the FHA sets it loan limit to 115% of each county’s median house price, but never less than the floor nor more than the ceiling.

In other words, limits are local, but still subject to the FHFA’s absolute limit.

All the above are updated every year. In principle, Congress could also pass new laws that would change these limits at any time.

There are quite a few figures and federal agencies to keep track of, but the only number that matters is the limit for your property type in your county.