As we approach the end of November, there has been an increase in new home construction and builder confidence, while rates remain low and unemployment claims start to rise.
Summary: Are you considering a home purchase in Salem, OR sometime soon? If so, you’ll want to do your due diligence and gather up as much information about Salem’s housing market as possible before you make a move. Buying real estate is a sizable endeavor and investment, so it’s important that you take your time to ensure a successful transaction. And in order to buy a home, you’ll need a mortgage to finance such a large asset, which is where a mortgage company comes into the picture. In this article, we’ll provide you with some useful tips to help you find the best mortgage company in Salem that can provide you with the home loan you need to make a home purchase.
Salem is a wonderful place to call home thanks to its vast parks, gardens, museums, art galleries, and outdoor activities. It’s also got a strong labor market, offering plenty of employment opportunities for residents to tap into. And despite being the capital of the state of Oregon, Salem’s housing prices are affordable, especially when compared to other major centers in the state like Portland. Even real estate investors can capitalize on Salem’s housing market, as the average rent of $1,595 is a pretty hefty income to collect, especially when considering Salem’s relatively affordable average home price of $294,700.
The real estate market in Salem is pretty healthy right now. Prices are relatively affordable, especially when compared to the statewide average home price of $369,200, but they’re on the increase. Experts agree that home prices are rising at a healthy rate, which makes this a prime time for buyers to get into the market and take advantage of property value appreciation and increased home equity.
With things heating up, your best bet would be to team up with a seasoned mortgage company in Salem to ensure you secure the right mortgage program at the most ideal terms possible. But considering all the mortgage companies out there, it can seem like a daunting task to choose the right one.
That’s why it’s helpful to follow certain tips and steps that will increase your chances of finding and picking the best Salem mortgage company possible.
This article will provide you with some helpful tips to ensure the mortgage company you choose is the right one for you.
Overview of the Salem Real Estate Market
Salem’s housing market right now is considered warm. As mentioned, the median home value in the city is currently about $294,700. Prices have already gone up 2.9% over the past 12 months, and they’re expected to rise another 4.1% over the next year into April 2021. That’s a decent increase in prices, which means buyers may want to get into the Salem, OR housing market sooner rather than later to ride the wave of appreciation.
Compared to the cost of homes in other centers, like Portland, or even compared to the statewide average home price, Salem’s home prices are reasonable and affordable. In Portland, for example, the median home price currently sits at $462,300, which is quite a bit higher than that of Salem. The median home price in Salem is also lower than Oregon’s statewide average of $369,200, so it’s a relatively affordable place to purchase real estate in the state.
As already mentioned, the real estate market in Salem is characterized as “warm” right now, according to the real estate research company Zillow. Home prices have already increased a decent amount over the past 12 months and are forecasted to rise at an even faster pace over the next year into April 2021.
When you apply for a mortgage in Salem with a mortgage company, you’ll want to have an idea of what the upfront costs will be; namely, how much will you have to put forth as a down payment? Based on the average home price in Salem and a 10% down payment amount, the average down payment on a home in Salem would be $29,470.
Obviously, the exact down payment amount that you come up with can range quite a bit. If you pay a 3.5% down payment for an FHA loan – which is the minimum amount required for this type of loan – then your down payment amount would be $10,314. And if you pay a 20% down payment on a conventional loan – which is the minimum amount needed to avoid paying private mortgage insurance (PMI) – then you could be looking at paying as much as $58,940 as a down payment.
There are other factors that will influence the amount you will be required to pay as a down payment, such as your financial health and credit score. It will also be affected by the Salem mortgage company that you choose to work with. That’s why it’s so important to choose wisely when it comes to picking the best mortgage company in Salem, OR.
Tip #1: Give Your Credit Score a Boost
When you apply for a mortgage, your lender will look at many aspects of your financial health, and your credit score is one of them. Your credit score is a snapshot of your financial profile and history and gives your mortgage company and lender an idea of whether or not you would be a risk.
A good credit score is usually indicative of a person who has been responsible with their finances and credit, and is a reflection of payments made on time and in full every billing cycle. On the other hand, a low credit score is usually indicative of someone who has not been responsible with their payments and credit, and would be considered more of a risk.
If your credit score is healthy, you stand a much better chance of getting approved for a mortgage. Not only that, but the terms and interest rate you would be offered would be more attractive.
But if your credit score is on the lower end of the spectrum, not only do you risk being charged a much higher interest rate, but you also risk not being able to get approved at all. If your credit score is lower than it should be, consider taking the time to improve it. There are many ways to do this, including the following:
- Make all bill payments on time
- Spend no more than 30% of your credit limit on your credit card
- Make more than your minimum payments on your credit card every month
- Don’t apply for too many loans or credit accounts in a short period of time
Giving your credit score a boost will open up more opportunities in your financial life, including securing a mortgage with the best terms and lowest rates.
Related: Check Your Credit Score for Free
Tip #2: Ask the Right Questions
Narrow your choices of mortgage companies by asking some of the tough questions. The answers you get will help you make the right choice on who to work with. Some questions you might want to ask include:
- How do you communicate with clients?
- How quickly do you reply to messages?
- What is the turnaround time on pre-approvals and closing?
- What lender fees do you charge? (These can include loan origination fees, appraisal fees, application fees, and so forth)
- Are these fees added to the mortgage or paid upfront?
- What are the down payment requirements?
- What interest rates do you offer?
- What types of home loan programs do you provide?
- What will my mortgage obligations be?
- What down payment assistance programs are available to me?
- What mortgage payment schedules do you offer?
The answers that the mortgage companies provide you with should be comprehensive. If you get a vague answer, you should probably look elsewhere.
Tip #3: Compare Interest Rates
Comparing mortgage programs from one lender to the next is important, and there are many factors that should be assessed before you make your decision on who to work with. But perhaps one of the most important things that should be looked at are the interest rates charged.
Luckily, the internet makes it very easy for buyers to be able to obtain rate quotes from various lenders and compare them side-by-side to each other. Doing this is a crucial step in the process of picking a mortgage company in Salem, OR, as it could mean the difference of tens of thousands of dollars or more over the life of your mortgage.
Of course, the rates quoted should be weighed along with the other fees that may be charged with a particular mortgage program. For instance, one mortgage product may offer a lower rate, but the fees associated with completing the mortgage may be a lot higher than a mortgage product with a higher rate but much lower fees. Do some number crunching to make sure the mortgage product you choose really is the more affordable option when all is said and done.
The point here is that it is important to examine the mortgage interest rates offered by Salem mortgage companies you are considering before you make your final decision.
Tip #4: Get Recommendations and Check Online Reviews
While not all online reviews are necessarily reliable or truthful, many of them are. It just depends on the source of the reviews that you look at. What you want is a mortgage company in Salem that can provide you with impeccable customer service in addition to being able to offer you the right mortgage product for your situation. And online reviews may be able to give you an idea of what it would be like to work with specific mortgage companies.
Google reviews tend to be rather reliable. Spend some time going through reviews on reliable sites to give you an idea about how other clients have felt about their experiences.
It should be noted that online reviews should be taken with a grain of salt, as many people who are more motivated to write reviews are those who are unhappy with their experience. Online reviews are quick and simple to post, so anyone can do it. Keep that in mind when reading reviews, especially the negative ones.
Rather than putting too much weight on one recommendation, try to get a general sense of how borrowers feel by looking at many reviews of the same mortgage company. Sometimes certain is right, and other times they aren’t. So use this tactic as a component of your overall strategy to find a mortgage company in Salem rather than putting too much focus and weight on it.
Tip #5: Ask if Discount Points Makes Sense
Check with the mortgage company and inquire if buying discount points to reduce your interest rate is a good idea. By buying points, you would have to pay a certain amount of interest upfront in exchange for a reduced interest rate on your home loan. If you plan to stay out in your new home for the long haul, this might make sense.
Get More Info About Mortgages in Salem
There is a lot to know about home loans, and it’s hard to find out everything you need to know from just one article. Your best bet is to speak directly with one of the mortgage specialists at Sammamish Mortgage. Serving the Pacific Northwest since 1992, we have extensive knowledge of home loans in Salem, OR. We offer many mortgage programs to borrowers in Washington, Oregon, Idaho, and Colorado, and we encourage you to give us a call today to get up-to-date about mortgages before you make the leap into homeownership!