So you’re ready to buy your first home and move to Oregon. Maybe you live here already, but it’s time for you to take the leap and become a homeowner. You may have a lot of questions about the home buying process. But, most importantly, you might be asking yourself, how am I going to pay for this?
The answer will depend on how you have managed your finances in the past and what loans
you will qualify for before you buy a home. Follow our advice for first-time home buyers in Oregon and do your research on federal and Oregon loan programs. You will be able to afford your dream home before you know it!
Where to Look for Homes in Oregon
Understand the market conditions and home prices before you start to build your budget. While home values slightly dipped throughout the state between October and November of 2018, the state is set to see steady growth throughout 2019. Home values in Oregon are set to increase more or less throughout most of the metro areas (except for Bend.) The market is especially hot in Hillsboro and Beaverton.
Moving to Portland in 2019
If you have been looking at moving to Portland over the past few years, you might be more hopeful about affording a home in the City of Roses. Demand is starting to slow in Portland to the point that more and more buyers are decreasing their prices. This is the best time for buyers to get a house in Portland, but Portland still remains the most expensive city to buy in Oregon.
Consider all of the relevant factors before you choose where to buy your first home.
- How is the job market where you want to move?
- Do you plan on raising a family; if so, what are the school systems like?
- Will you be able to enjoy all of your favorite activities?
If you are already living in Oregon, it might be useful to spend as much time in the area as you can before you buy.
Loan Options for First-Time Home Buyers in Oregon
While you are shopping for houses, you should also consider shopping for loans. You can get pre-approved for a loan while you are still deciding where to move. Not all loans look the same and not all loans will be available to you as a first-time home buyer. Think about your future when you start shopping for loans.
The biggest differences in loans include:
- Interest rates
- Loan terms (Clever tip: stay away from a 50-year mortgage)
- Whether the interest rate is fixed or adjustable
Do not just compare the terms of the loan when you are shopping. When you are looking at different loan options, don’t forget to consider the following:
- Cost of down payment and closing costs
- Local expenses (property taxes, HOA fees, etc.)
- Whether you are buying property as a permanent home or an investment property
- If the loan comes with private mortgage insurance (and whether that is something youwant to pay)
There are a lot of factors to consider when you are shopping for loans. Luckily, there are also a lot of loan options and opportunities for first-time home buyers in Oregon.
National Loan Programs For First-Time Home Buyers
Start by looking at federal loan programs available for first-time home buyers, especially if you are looking to move to Oregon from out of state. Available federal loans include:
- Federal Housing Administration (FHA) Loans
- USDA loans
- VA Loans (for veterans)
Oregon-Specific Loan Programs and Assistance
Home buyers in Oregon can also receive low down payments and low interest rates through a variety of Oregon loans or assistance programs. Keep the following options in mind:
- Oregon Bond Residential Loan Program
- Oregon Rate Advantage Home Loans
- Oregon Cash Advantage Home Loans
- Oregon Down Payment Assistance
If you want to learn more about loans for first-time home buyers in Oregon, reach out to the Oregon Housing and Community Services Department (OCHS.) The OCHS is the department in charge of the Oregon Bond Residential Loan Program. Their mission is to work with home buyers throughout Oregon to find affordable mortgage programs, offer closing cost assistance, and provide other financial help.
How to Qualify for First-Time Home Buyer Loans
Once you have found the right loan for your financial situation, you should make sure you are ready for pre-approval. Take these steps to prepare.
Improve your credit score.
Lenders will take your credit score and credit history into account when they look at your loan application. Can they trust that you will pay back the loan over the next 15, 20, or 30 years?
FICO determines your credit score based on:
- Past and current financial accounts
- Ability to pay back loans
- Ability to pay bills (including utilities and credit card bills)
Look up your credit score online and see how your score may affect your ability to get approved for a loan. You can get an FHA mortgage with a credit score as low as 500, but the higher your score, the more likely you will be able to get a loan with a lower interest rate and down payment.
Enroll in a first-time home buyer education course.
Are you sure you are prepared to take on a home loan? There is certainly a lot to learn before you sign the papers. Education courses are available for first-time home buyers who may have not experienced taking out or paying back a mortgage. Lenders often require home buyers to complete a certified course before they get pre-approved for a loan.
Speak to a real estate agent.
Don’t go through the loan application process alone. Reach out to a buyer’s agent before you take the leap and become a homeowner.