Are you planning to buy your first home in Oregon during 2019? Do you need to use a mortgage loan to help finance your purchase? If so, you’ll find the following mortgage advice helpful. Here are five financing tips and strategies for first-time home buyers in Oregon.
Market Update: Interest Rates Down, Home Prices Up
As of mid-December 2018, home prices across Oregon were showing signs of a slowdown. For a couple of years there, Oregon was experiencing some of the biggest home-price gains of any state in the country (aside from Washington). But things have changed considerably.
According to the latest data, the median home price in Oregon rose to around $339,000 in December 2018. That was an increase of around 6% from a year earlier. But forecasters are predicting smaller gains during 2019, an outlook that’s also being applied to the nation as a whole.
We’re also seeing an increase in housing inventory in most parts of Oregon. Even Portland (which has long suffered from an inventory shortage) is showing signs of a supply increase.
Josh Lehner, an economist with the state’s Office of Economic Analysis, said over the summer: “Inventory remains lean, yes, but it is rising which brings somewhat better balance.”
It’s not a buyer’s market yet. But there is a shift happening, and it’s one that could benefit first-time home buyers in Oregon during 2019.
5 Mortgage Tips for First-Time Buyers
With that market update out of the way, let’s move on to the mortgage advice mentioned earlier. Here are five helpful tips for first-time buyers in Oregon, fully updated for 2019.
1. Take advantage of today’s low mortgage rates.
According to Freddie Mac, the average rate for a 30-year fixed mortgage loan dropped to 4.63% during the week of December 13 (when this article was published). That’s the lowest it has been since September of this year.
Today’s low rates represent a good opportunity for first-time home buyers in Oregon. Especially for those who plan to use a 30-year fixed loan. By locking in a low rate today, you are shielding yourself from potential increases down the road.
2. Establish a basic budget before house hunting.
How much can you afford to put toward a monthly mortgage payment right now, based on your current income and monthly expenses? If you can’t answer this question, you’ve got a bit of homework to do.
Putting a budget on paper will help you ensure that you’re not taking on too much debt, with the addition of a mortgage. The good news is that you don’t have to be a financial planner or CPA to create a basic housing budget. Just take a look at your current monthly expenses, and subtract that amount from your monthly take-home pay.
3. Explore low-down-payment mortgage options.
If you’re fortunate enough to have a large amount of money in the bank, you can probably skip over the section. But if you’re like many first-time home buyers in Oregon, you might not be able to come up with a large down payment on your purchase. And fortunately, you might not have to.
The average down payment among first-time home buyers in Oregon and nationwide has actually declined over the past few years, thanks to flexible mortgage programs that require less money up front. These days, both FHA and conventional loans offer relatively low down payments to qualified borrowers.
4. Consider using down payment gift money from relatives.
Did you know that a lot of mortgage programs allow borrowers to use gift money from family members for the down payment? It’s true. Both FHA and conventional loans allow for this kind of thing.
This is a great way for first-time buyers in Oregon to come up with the funds needed for the down payment on a purchase.
5. Keep an eye on home prices. They’re still rising in most areas.
Mortgage rates have been on a downward slide for several weeks now, as of mid-December 2018. And while they might inch upward during 2019, analysts and forecasters don’t expect a major rate hike anytime soon.
Home prices, on the other hand, continue to rise in most parts of Oregon. And this is something first-time buyers should keep a close eye on, especially those who plan to buy later next year. Postponing your purchase until later in 2019 might mean paying a higher price.