Average Down Payment for Oregon First-Time Buyers in 2022

Published:
December 12, 2017
Last updated:
December 7, 2021
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How much money do you need to pay at closing? More specifically, how much of a down payment do you need to make when you apply for a mortgage to buy a home in Oregon?

Down payments and closing costs are a big concern for many first-time home buyers in Oregon. It’s easy to understand why, because calculations vary from person to person.

Many buyers may believe that they don’t have enough money for their down payment. But the average down payment for first-time buyers in Oregon might be lower than you think.

Here’s a look at the average down payment for Oregon first-time buyers in 2022. 

Why Are Down Payments Needed?

Before we get into how much of a down payment you can expect to pay when applying for a home loan in Oregon, let’s go over down payments in general. 

When you apply for a mortgage, you’ll need to come up with a lump sum of money first. These funds will be applied to the purchase price of the home. The rest of the money will have to be financed in the form of a down payment. 

The higher the down payment, the less of a risk you will be to your lender, which can increase your chances of getting approved for a mortgage with more favorable terms. 

But if you only put down a minimum down payment amount, you’ll be at a higher risk because you’ll have to borrow a higher percentage of the home’s value. In turn, you may reduce your chances of mortgage approval at better terms.

That said, if you work with the right mortgage lender, you may be able to get approved for the right mortgage program without having to spend more money upfront than you can afford. 

Average Down Payment for First-Time Buyers in Oregon

There is no official source that tracks the average down payment required for first-time home buyers in Oregon. But we can get pretty close by looking at (A) current home prices in the state, and (B) the average down payment percentage among first-time buyers nationwide.

According to the real estate data tracking company Zillow, the current median home value for Oregon is $479,135, as of December  2021. Keep in mind that home values are predicted to rise throughout the year.  But let’s use that number when calculating the average down payment among first-time buyers in Oregon.

So, how much down payment do first-time buyers have to pay in Oregon? The answer varies from  one buyer to the next, but a recent survey sheds some light on what the average down payment might be. A survey conducted by the National Association of Realtors (NAR) showed that the average down payment for 60% of first-time buyers is 6% or less.

Using the Oregon median home value of $479,135, a 6% down payment would be around $28,748.

There are many other notable down payment options, here are two of the most common:

  • A down payment of 3% (generally the minimum for a conventional mortgage through the conventional 97 loan program) for a median-priced home in Oregon would come to around $14,374. Conventional mortgages require a minimum 3% down payment in order to secure this type of home loan. 
  • A down payment of 3.5% (which is the minimum for an FHA loan) would be around $16,769. These loan types are quite popular among first-time buyers because of their low down payment requirements, as well as for their lax criteria when it comes to credit scores

Remember, the dollar amounts are based on average home values which reflect the market midpoint. Therefore, a more expensive home purchase would result in a higher down payment, just as a lower priced home would result in a less expensive down payment.

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How to Reduce Your Upfront Investment

First-time home buyers in Oregon have different options and priorities when it comes to buying a house. Some homebuyers want to put more money down to reduce their monthly payments and avoid paying PMI (private mortgage insurance).

PMI is required if you make a down payment less than 20% of the purchase price of the home. While this type of insurance is meant to protect the lender, it is the borrower who has to pay the premiums. The good news is that once your loan-to-value (LTV) ratio drops to less than 80%, you may be eligible to eliminate PMI, which means your mortgage payments will be lower.

Other buyers want to minimize their upfront investment, even if it means paying mortgage insurance premiums. The key is to choose the right financing option for your situation and your financial goals.

Consider Lower Down Payment Options

If reducing your down payment is a top priority, you’ll want to consider the many mortgage options that are available today. Conventional home loans (those loans that are not insured or guaranteed by the federal government) can have down-payment requirements as low as 3% for some borrowers.

The FHA loan program – which is particularly popular among first-time buyers in Oregon – requires a minimum investment of 3.5%.

Related: Buying with less than 5% down

If you happen to be a veteran or a member of the military, your hard work and sacrifice for the country may enable you to qualify for a zero down payment loan.  That’s because the VA loan program offers 100% financing, which can eliminate the need for a down payment all together.

Home Loan Programs Available That Require Lower Down Payments

Additionally, many home loan programs that are available to Oregon home buyers in 2022 allow a gift of down payment funds from third parties. This is where another person or organization contributes money toward your down payment expense. For instance, a parent or other family member could contribute money to a first-time buyer’s cash necessary at the closing table.

It’s important to keep in mind that if you use a gift as part of your down payment, you’ll need to show some form of paper trail to prove the money is indeed being gifted to you as a down payment, and you’re not required to repay that amount to the gifter. Most lenders will require this to avoid any issues. 

Key takeaways from this article:

  • The average down payment for first-time home buyers in Oregon varies based on the type of mortgage loan program being used, and other factors such as home value and credit score.
  • You don’t necessarily need to put 20% down unless your goal is to avoid mortgage insurance.
  • Depending on the type of loan you use, your minimum required investment could be as low as 3% – or even 0%, if you use the VA program.
  • If you want to avoid PMI, then you’ll need to make a 20% down payment. This would translate to $95,827.
  • Some borrowers can use gift money from third parties to help offset their upfront, out-of-pocket closing costs.

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Have Questions About Down Payments and Mortgages?

Sammamish Mortgage has been helping borrowers in Oregon since 1992 and offers a wide variety of mortgage programs and products with flexible qualification criteria. We also provide mortgage services to borrowers in Washington, Colorado, and Idaho. Please contact us if you have questions about down payment requirements for first-time buyers, or any other mortgage-related topics. Get in touch with us for more help – we look forward to helping you!

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