Whether you’ve found the perfect Oregon home or are still in the early stages of the home buying process, it’s important for you to know that the down payment will not be your only out-of-pocket cost. Knowing what expenses to expect can help you plan accordingly and avoid any last minute cost scares.
As a first-time home buyer in Oregon, you may not be aware of all of the fees that show up in closing costs. Here, we’ve outlined all of the expenses you should expect to be hit with when finalizing the purchase of your home. Knowing about anticipated fees will help to prepare you financially for this major life milestone.
For this reason, we strongly advise you to do your homework and educate yourself on all fees involved in buying a home. Furthermore, we encourage you to work with an experienced, local real estate agent in order to have realistic expectations and to best prepare yourself before pulling the trigger on a home purchase.
Want to connect with a top-rated, Oregon buyer’s agent? Clever can help! Fill out our online form and we’ll be in touch to answer any questions you might have and introduce you to one of our local Partner Agents for a no-obligation consultation.
Closing Costs for Oregon Homes: What to Expect
According to data from Bankrate, the average closing costs in the state of Oregon is $2,122. This includes origination and third-party fees. Keep in mind that this study does not account for a number of variable costs, such as title insurance, title search, taxes, other government fees, escrow fees, and discount points — which means you should expect even more costs down the road.
To help you get a better grasp of how much you’ll be spending, you should expect to pay anywhere between 2% and 5% of the total cost of your home. The median listing price in the state of Oregon is $379,900, so expect to pay anywhere between $7,598 and $18,995.
While closing costs can be expensive, one of the largest mortgage expenses is the interest rate. Over the life of the loan, a few small percentage points can result in hundreds of thousands of dollars in interest payments.
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Common Closing Costs for Oregon Home Buyers
On average, home buyers in Oregon pay closing costs ranging from 2% to 5% of the purchase price. There are a few different types of closing costs to buying a home in Oregon that you should familiarize yourself with. We’ve outlined what expenses you should expect to encounter below.
Title Insurance and Owner Policy Insurance
Title insurance is a type of indemnity insurance that is offered by title companies that insure against losses resulting from defects in the title, such as liens, outstanding taxes, mortgages and violations belonging to previous owners.
A title search ensures to all parties that the property purchase is free and clear of all obligations, and that no party has a claim on the house because of unpaid dues, legal suits, and other factors.
In Oregon, the cost of title insurance is split between the buyer and seller. Title insurance in Oregon typically ranges between $300 and $600. Buyers will pay for lender required title insurance, which insures the lender's interest in the property and that this interest has priority over all other claims to the property.
Sellers will pay for owner policy insurance. This policy ensures the buyer against liens or defects to the property as long as the buyer owns the property.
Discount Points are a type of prepaid interest that the buyer can purchase upfront to reduce the interest rate charged by the bank. These fees are negotiable and may be covered by the bank.
Appraisal fees are the fees for a professional appraiser to assess the value of the home. Depending on the type of property, location and property size, these fees typically run between $300 and $500 on average.
Mortgage Origination Fees
Loan origination fees are the fees charged by the bank or mortgage lender for the creation of a loan, and are approximately 1% of the mortgage amount. Depending on the risk factor of the loan and the borrower’s creditworthiness, these fees may be negotiable; typically speaking, the more collateral you provide, the more you will be able to negotiate.
The survey fee pays for the surveyor to show the exact boundary, location, and legal description. The cost can range from $350 to $500 in the state of Oregon.
Credit Report Fee
Lenders will pull your credit report to qualify you for a loan. The fee can range from $30 to $60 in the state of Oregon, and is generally passed onto you once your application has been approved.
When the buyer gets a loan, their lender may require them to pay for some things, such as property taxes and homeowners or rental property insurance in advance. These are known as prepaid costs. The lender lists these costs in an estimate of closing costs called The Good Faith Estimate, which is given to the buyer no more than three days after applying for a loan.
Local governments charge recording fees and taxes to record the sale of property. Recording fees are also commonly known as transfer taxes. In the state of Oregon, recording fees are determined by county, and will typically cost you between $80 and $100.
Other Costs to Consider
Before pulling the trigger and purchasing your next home, there are a few other charges you need to take note of. We know that may not be what you want to hear right now; you’ll be thanking us later when you’ve already set aside the money needed to cover all these fees when it comes time to fork over the cash.
Homeowners insurance covers possible damage to your home. Your first year’s insurance is often paid at closing. Oregon's annual premiums for homeowners insurance are on the lower side, averaging $643 per year. How much you will have to pay can vary a lot depending on your home's size, your assets, and your home address.
Property taxes are ordinarily calculated by local government agencies and paid for by the owner of the specific property. The taxes are primarily based on the value of the home, which includes the land on which it sits.
The median property tax in Oregon is currently $2,241.00 per year for a home worth the median value of $257,400. Counties in Oregon collect an average of 0.87% of a property's assessed fair market value as property tax per year.
Utilities and Maintenance Costs
The average utility bill in Portland, Oregon is $113.42 and includes electricity, heating, water and garbage. In Eugene, OR, the average monthly utility bill is $105.53. In Salem, OR, utilities average a much pricier $164.74.
We can’t stress enough the importance of ensuring financial stability before making the decision to purchase a home. Knowing what costs are coming around the bend should help give you an idea of how much you’ll need to set aside for closing costs.
How to Save on Closing Costs in Oregon When Buying a Home
To save on closing costs, you may want to consider taking advantage of closing cost assistance programs. In Oregon, you have several options you may be eligible for.
Oregon Housing and Community Services (OHCS)
Oregon sells bonds through its Oregon Bond Residential Loan Program. The goal of this program is to help finance its Rate Advantage and Cash Advantage Home Loans below-market interest mortgages for eligible first-time home buyers.
The program offers below-market fixed interest rates to help first-time home buyers qualify for homes with affordable monthly payments. Details tend to vary by program and county, and typically covers 3% of an Oregon closing cost.
Oregon Cash Advantage Home Loan
Cash Advantage Home Loans with a below-market interest rate are available to eligible first-time home buyers. Cash assistance that are equal to 3% of the mortgage amount can be applied toward closing costs.
Limits on income and purchase price vary by county. This assistance is in the form of a grant, slightly increasing the mortgage interest rate.
Additionally, you can save even further on closing costs by negotiating with sellers. An experienced real estate agent will be able to assist in the process, and can work to get you a more manageable fee when it comes time to close on your new home.
Clever Partner Agents are expert negotiators who can help minimize your closing costs and uncover additional cost savings throughout the home buying process.