|7/1 ARM (adjustable rate)||N/A||N/A|
|5/1 ARM (adjustable rate)||N/A||N/A|
Buying a house in Oklahoma can be exciting — and overwhelming at the same time. We get it, and we’ll help you through the process. One of the first decisions you’ll need to make is how to finance your home. Benzinga can share everything you need to know about mortgage rates and how to find the best mortgage companies in the Sooner State.
Best Mortgage Lenders in Oklahoma
You’ll want to determine what type of lender is best for you, now that you understand what factors impact mortgage rates. We’ve surveyed the most popular mortgage lenders in Oklahoma and broken them down into simple categories to help you find the lender that will best meet your mortgage needs.
What is a Mortgage Rate?
One of the most important factors in deciding which mortgage is best for you is to compare mortgage rates. A mortgage rate is the rate of interest charged on your mortgage.
For instance, if you take out a mortgage for $250,000, you’ll pay back not only the initial $250,000 you borrow (which is also called the principal) but also the interest, which is determined by your individual interest rate.
A low mortgage rate can save you from paying tens of thousands in interest over the lifetime of your mortgage. You likely want to be able to secure the best rate possible — so it’s a good idea to first understand how lenders determine your individual mortgage rate.
What Factors Impact Your Mortgage Rate?
You can quickly search typical mortgage rates by lender, area or mortgage type but there are a set of factors beyond that set of data that goes into determining your mortgage rate. Knowing more about these factors can help you recalibrate your expectations or improve key areas before applying for a mortgage.
- Credit score: In general, your mortgage rate will be determined by your credit history. Typically, the higher your credit score, the lower your rate, and vice versa. It’s a good idea to know your score and work on improving your credit prior to applying for a mortgage.
- Loan-to-value ratio: Another major factor in determining your score is your loan-to-value ratio, or LTV. This term refers to the amount you borrow compared to the value of the home.
For instance, let’s say you buy a home worth $200,000 and put down $15,000. You would look for financing for the remaining $185,000. Your LTV ratio would be determined by dividing $85,000 (the amount borrowed) by $200,000 (the home value), giving you 0.925, or 92.5.
Typically, the higher your LTV, the riskier your loan. Therefore, putting down a larger down payment can often help reduce your mortgage rate.
- Home location: Your credit score and LTV ratio are the most important factors in determining your mortgage rate but location can also play a role. Real estate markets can vary greatly from city to city. Rates tend to decrease when the market is strong, as the risk of defaulting on loans decrease.
- Lender: The lender you finance your home purchase through also plays a role in determining your rate. Some lenders allow alternative credit history and on-time rent and utility payments to count toward your credit score, which allows you to obtain a much lower rate than you might with a more traditional lender.
- Mortgage type and term: Lastly, the type of mortgage you apply for will also determine your rate. Some mortgages have federally mandated rates and others offer rate discounts and incentives — as long as you meet their qualifications. The length of your mortgage (also called a mortgage term) will also impact your rate.
Find out more about mortgage types and how they can impact your mortgage rate below.
What is a Mortgage Type?
There are a variety of mortgage types for you to choose from when you finance your Oklahoma home. The 4 most common mortgage types include conventional, FHA, USDA and VA loans.
Conventional mortgages are funded by financial institutions like banks and credit unions. Conventional mortgage rates are set based on how risky a loan is considered to be by a lender. Since they are funded by banks rather than the federal government, conventional mortgage rates tend to be higher than government-backed mortgages.
FHA mortgages are funded by the Federal Housing Administration and are almost exclusively offered to first-time home buyers. These mortgages can be offered by a variety of lenders and are typically considered less risky since they are backed by the federal government.
FHA mortgages offer perks, including low down payment options (minimum of 3%), low credit score requirements (minimum of 580) and lower mortgage rates than most traditional lenders. FHA mortgages require private mortgage insurance (PMI) for down payments under 20% to protect the lender in case you default on your loan.
USDA mortgages are funded by the United States Department of Agriculture and can be used to purchase a home in a rural location. Most homes purchased outside of major cities are eligible for USDA mortgages.
Perks of USDA mortgages include no down payment options (0% down), lower-than-market mortgage rates, flexible credit requirements and low mortgage insurance rates. If you pay less than 20% on your down payment, you will need to purchase mortgage insurance, which protects the lender in case you default on your loan.
You’ll want to research VA mortgages if you’re an active or former veteran. Funded by the Department of Veterans Affairs, these mortgages are designed to help current and former military members comfortably afford a home.
VA loans offer incentives such as no down payment and no mortgage insurance requirements, lower-than-market mortgage rates and flexible credit requirements. Mortgage insurance is not required but you will need to pay an origination fee to cover processing charges (typically valued at 1% of the loan).
What is a Mortgage Term?
The length of your mortgage, or mortgage term, will also impact your mortgage rate. Here are a few common mortgage terms.
A 30-year fixed-rate mortgage is the most common mortgage term you’ll see. This standard mortgage term means that you’ll pay a fixed rate for a period of 30 years. Typically, 30-year fixed-rate mortgages have low monthly payments but a high interest rate. Low monthly payments make them more affordable but the higher rate means you’ll pay more interest over time.
The other standard fixed-rate mortgage option is the 15-year fixed-rate mortgage. These mortgages typically have high monthly payments but low interest rates. You’ll ultimately pay less in interest since you’re paying off your mortgage over a shorter period of time.
5/1 Adjustable Rate
Adjustable-rate mortgages (ARMs) are mortgages with rates that change. This means you might be approved for an ARM at a low rate, but that rate is not guaranteed for the lifetime of the loan. These adjustable-rate mortgages lock in your approved rate for 5 years, and after this period, rates will fluctuate depending on the market.
5/1 ARMs are ideal if you want to sell after 5 years or for first time buyers who anticipate making more money after the initial introductory rate period.
Current Mortgage Rates in Oklahoma
Mortgage rates fluctuate as the supply and demand for housing in each market changes. Benzinga’s mortgage rates are updated frequently in order to account for statewide and local market changes in Oklahoma.
|7/1 ARM (adjustable rate)||N/A||N/A|
|5/1 ARM (adjustable rate)||N/A||N/A|
Calculating Interest in Oklahoma
Interest on Oklahoma mortgages is calculated based on the home value, loan term and current interest rate in order to give you a more thorough understanding of how much interest you can expect to pay.
|City||Average Home Value||Loan Term||Current Rate||Downpayment (20%)||Monthly Payment||Total Interest Paid|
|Broken Arrow||$166,500||30-year fixed||7.021%||$33,300||$888.06||$186,501.60|
Lender Credit Score Minimums in Oklahoma
Your credit score will be used to determine your mortgage rate — it doesn’t matter what type of mortgage or lender you use. Here’s a quick breakdown of the minimum credit score requirements for a few popular lenders in Oklahoma.
It’s important to understand how your mortgage rate can impact the amount of interest you’ll pay on your loan when you buy a home in Oklahoma. Locking in a low mortgage rate can help you save money but it’s not the only factor to consider.
Be sure to also look for lenders who offer incentives that are important to you — from help with closing costs to no down payment options. It’ll ensure long-term financial success in your new home.
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.