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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


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.

Your Credit Score

Credit scores for mortgage

What do you know about credit scores?  In today’s financial world, a proper understanding of your credit score and how it affects you is becoming more and more crucial.  Following the financial crisis of the last decade, people are waking up to the importance of credit and the role it needs to play in a healthy economy.  It is therefore that, as a responsible citizen, you can no longer afford to not arm yourself with a basic knowledge of credit scores, how they work, and how they come into play in your life. Continue reading “Your Credit Score”

6 Things to Know Before Getting a Mortgage

Are you ready to shop for your mortgage? It can be an intimidating process, as it’s a very significant investment that can lose you thousands of dollars. In my work as a Lynnwood mortgage loan officer, I’ve identified the biggest and most common mistakes that people tend to make when securing their mortgages; follow these simple tips before diving into the home-buying process, and you should come out of it with a maximum of money and a minimum of stress.
Continue reading “6 Things to Know Before Getting a Mortgage”

4 Common Myths about Fixer-Uppers

Are you in the market for a fixer-upper? Indeed, buying a beat-up old home and improving it yourself can be a good way to save big money on your mortgage, but there are many other factors to consider. Your Lynnwood mortgage loan officer has compiled this list of common misconceptions to help you avoid one of the big money-wasters that frequently afflicts the ambitious do-it-yourselfer.
Continue reading “4 Common Myths about Fixer-Uppers”

9 Questions to Ask Before Hiring a Real Estate Agent

Are you looking to sell your home? One of the most important decisions you can make is which agent to hire. A bad agent can lose you thousands of dollars and give you nothing but grief, whereas a good agent can move your home quickly, conveniently, and as close to your asking price as possible.

In my work as a Lynnwood mortgage loan officer, I’ve developed a good sense of what makes an effective realtor. When it comes time for you to select an agent, try using this simple, nine step process to screen your potential representatives.
Continue reading “9 Questions to Ask Before Hiring a Real Estate Agent”

9 Ways to Avoid Common Buyer Traps

As a Lynnwood mortgage loan officer, I like to think that I’m one of the few people in the real estate world you can really, truly count on to be on your side. While you can generally expect lenders and sellers to be out to increase their own profits, and even the most scrupulous realtors have to split their loyalties between you and the selling party, the mortgage loan officer is the one whose job is to keep the money in your pocket and the stress out of your mind. To this end, I’ve compiled the following list of common traps that you, as a buyer, may face when it comes time to shop for a new home. Don’t stumble, don’t snag, and don’t be taken advantage of ever again when you follow these nine simple steps!
Continue reading “9 Ways to Avoid Common Buyer Traps”

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