Before you buy your first home, it’s a great idea to familiarize yourself with mortgages to find out which mortgage type is right for you. We’ve put together this guide for first time home buyers in Oregon to help you get started.
Best Mortgage Lenders in Oregon for First Time Buyers
When you start the mortgage process, it’s important to familiarize yourself with the best mortgage companies. The lenders mentioned below are some of our top picks for first time buyers.
1. Best Overall: Rocket Mortgage®
Rocket Mortgage® is a digital lender that offers a quick, easy online application process.
This is one of our favorite lenders for first time buyers because its website offers a wide range of resources to answer common questions and guide you through the mortgage process.
Rocket Mortgage® is also known for its responsive and helpful customer service — a must-have for first time buyers.
The Housing Market in Oregon: An Overview
Understanding the housing market before you get started can help you find the best area to purchase your home. Here are some helpful statistics:
- Total households: 1,333,723
- Median list price: $359,000
3 most expensive cities in Oregon to buy a house:
- Lake Oswego
- St. Paul
3 most affordable cities in Oregon to buy a house:
- Baker City
Preparing for a Mortgage
It’s important to put together an accurate picture of your financial situation when you begin to prepare for a mortgage. Lenders will want to see a couple of financial numbers:
- Your credit score, a three-digit number that shows how reliably you’ve borrowed money in the past. Your credit score is affected by a number of factors, including your payment history and the amount of credit you have available.
- Your debt-to-income (DTI) ratio, which shows how much debt you have relative to your income. You can calculate your DTI ahead of time by dividing your current monthly debt payments by your gross monthly income. Most lenders require borrowers to have a DTI that’s at 43% or less.
You should also gather the documents you will need during your application process. These include:
- Income information: You can expect lenders to ask for financial information that will prove that you can afford your mortgage payments. Be ready to show W-2 forms, tax returns and pay stubs from the past 2 years when you submit your application.
- Information about assets: Lenders will also want to proof of other financial means. You can expect to submit statements from any bank accounts — checking, savings, retirement and investment accounts. You can also provide information about other valuable items that you own, including your vehicles.
- Additional information: Depending on your situation, lenders may require additional documents beyond the basic income and asset information. If you receive or make payments not included in your financial documents, you’ll need to gather information about those. This includes court orders for alimony and child support payments.
It’s important to consider several different mortgage types before you decide which mortgage option is best for you. Remember, most lenders don’t offer all of these mortgage options. Be sure the lender you decide to work with offers the mortgage type you want to apply for.
- Conventional loans: Conventional mortgages are one of the most widely available mortgage types. These mortgages are offered directly by lenders, so they typically have fewer eligibility requirements than government-backed mortgages. Conventional mortgages are offered in both adjustable and fixed mortgage rates. These mortgages can have terms that range from 5 to 30 years. Your lender will work with you to decide which repayment option is best for you if you decide to get a conventional mortgage.
- FHA loans: The Federal Housing Administration offers a mortgage insurance program to qualified buyers. This mortgage type is an attractive option for many first time buyers — you may be able to make less of a down payment on your home. Most lenders offer down payments as low as 3.5% of your home’s purchase price with FHA mortgages.
- USDA loans: USDA mortgages are offered by the U.S. Department of Agriculture to home buyers in qualified rural areas. Many lenders of USDA mortgages offer flexible minimum credit score requirements and lower-than-market interest rates. If you qualify for a USDA mortgage, you may also benefit from 0% down payments.
- VA loans: VA loans are offered by the U.S. Department of Veterans Affairs. To qualify, you must meet certain eligibility requirements. If you’re a veteran, you must have been enrolled in the military for a minimum period of time. You may also qualify if you are the spouse of a veteran who has passed away in the line of duty or due to a service-related disability. VA loans include 0% down payments.
- Jumbo loans: Jumbo loans are intended for buyers who are interested in a more expensive home or a home in a highly competitive market. The Federal Finance Housing Agency sets maximum financing limits each year, and lenders must abide by these guidelines when they lend money for mortgages. You’ll need to apply for a jumbo mortgage when you take out a loan that exceeds these limits. Most lenders will require you to have a higher credit score and income level than the standard requirements.
First Time Home Buyer Programs in Oregon
As a first time home buyer in Oregon, you may be eligible for some of Oregon’s first time home buyer programs. These programs include:
- Down Payment Assistance Program: You may be eligible for assistance from this program if you have completed a homeownership education course. The benefits of this program include an award of up to $15,000. This money may be used toward your down payment and/or closing costs on your home.
- Oregon Bond Residential Loan Program: Oregon Housing and Community Services runs this program to help Oregon residents buy their first home. Eligible borrowers have a choice between 2 options with this program. You can choose the cash advantage, which offers cash assistance equal to 3% of your loan amount to help with your closing costs. This option also comes with a low fixed interest rate. The other option is a rate advantage, which offers the lowest fixed rate possible to maximize your home purchasing power.
Current Mortgage Rates in Oregon
Your mortgage rate is the interest rate that you will pay on your mortgage. Your lender will offer you a mortgage rate based on many factors, including your credit score and the mortgage type you select.
There are 2 main mortgage rate types. A fixed-rate mortgage means that your mortgage rate will be decided when you finalize your loan and will not change. An adjustable-rate mortgage means that the mortgage rate you start with is not set in stone. Your mortgage rate may fluctuate many times throughout the lifetime of your loan.
Mortgage rates change frequently. If the housing market is competitive, interest rates may increase. If the housing market is moving slowly, you may be able to find lower interest rates.
Benzinga routinely monitors current mortgage rates and updates this chart to reflect the most recent data.
Closing a Mortgage
You’ll enter the closing process once you’ve found your home. This starts when the seller accepts the offer you’ve made on the home. You should then arrange a home inspection and appraisal. The inspection will identify any potential issues and the appraisal will help you understand the home’s value. After these are completed, you can negotiate with the seller to decide if there are any home repairs or updates that need to happen before you finalize your purchase.
Next, you’ll secure and finalize your mortgage financing with your lender. Make the required payments, including your down payment on the home.
Before your closing date, you will perform a final walkthrough to confirm that the home is in the condition you and the seller agreed upon. On your closing date, the home will officially become yours!
Take the Next Step Toward Home Ownership
Now that you’re familiar with mortgage types and some of your lender options, it’s time for you to get a purchase quote or refinance quote. After you’ve done this, you can move onto your preapproval process with the lender of your choice.
Related content: Best Oregon Home Insurance
Get Ready for Take Off
Rocket Mortgage® is an online mortgage experience developed by the firm formerly known as Quicken Loans®, America’s largest mortgage lender. Rocket Mortgage® makes it easy to get a mortgage — you just tell the company about yourself, your home, your finances and Rocket Mortgage® gives you real interest rates and numbers. You can use Rocket Mortgage® to get approved, ask questions about your mortgage, manage your payments and more.
You can work at your own pace and someone is always there to answer your questions — 24 hours a day, 7 days a week. Want a fast, convenient way to get a mortgage? Give Rocket Mortgage® a try.