Do you plan to buy a home in Oregon sometime soon? Have questions about mortgage loans, down payments, and other aspects of home finance? Then keep reading. This guide provides a fully updated overview of mortgage down payment options in Oregon.
Oregon Down Payment Options
Let’s start with a quick review of the minimum down payment requirements for Oregon mortgage shoppers and home buyers. The minimum amount you are required to put down will vary depending on which type of loan you are using, and other factors.
Conventional: A conventional mortgage loan is not insured or guaranteed by the government, which makes it different from the two options below. The minimum down payment requirement for an Oregon conventional mortgage loan usually ranges between 3% to 5%.
FHA: These loans are insured by the Federal Housing Administration (FHA), which is part of HUD. Because of this government backing, the eligibility criteria are a bit more relaxed with FHA loans. The minimum down payment for this Oregon mortgage option is 3.5% of the purchase price or appraised home value, whichever is less. Additional details.
VA: The Department of Veterans Affairs (VA) home loan program is reserved for military service members and veterans. The best feature with this type of Oregon mortgage loan is the down payment — or lack thereof. Eligible borrowers who use the VA program can buy a home in the state with no money down, and usually without mortgage insurance. It’s hard to beat those benefits.
How to Reduce Your Upfront Investment
Oregon home prices have risen steadily over the last few years, and by double digits in 2016 alone. As a result of higher housing costs, home buyers who use mortgage loans are always looking for ways to reduce their down payment expense.
One way to do this would be to use a mortgage loan option that allows you to put less money down. For instance, borrowers who use the FHA loan program (mentioned above) can put down as little as 3.5% when buying a home in Oregon.
Down payment gifts are another way to reduce your out-of-pocket expense. This is where a third party — such as a family member or close friend — gives you money to help cover your down payment. These days, many Oregon mortgage programs allow for such gifts. That includes FHA and many conventional home loans as well.
With gifting, the big caveat is that the money being donated must truly be a gift. It cannot be a short-term loan from one person to another. In fact, the person who is gifting the funds must write a letter to this effect, stating that they do not expect any form of repayment from the person who is buying the home.
As mentioned above, Oregon military members can generally avoid down payments altogether, simply by using the VA home loan program when buying a house.
By combining a low-down-payment mortgage program with a third-party gift, Oregon home buyers could greatly reduce — or even eliminate — their out-of-pocket investment.
Let’s talk: This is just a broad overview of Oregon mortgage down payments and financing strategies. It does not cover all of the home loan programs and options that are available.
Sammamish Mortgage is a local, family-owned company based in Bellevue, Washington. We serve the entire state, as well as the broader Pacific Northwest region. Please contact us if you have mortgage-related questions.