5 Mortgage Tips for First-Time Buyers in Oregon - 2021
Wednesday, June 9 CCCU
5 Mortgage Tips for First-Time Buyers in Oregon: 2021
The decision to enter the housing market is an exciting one. That said, buying your first home is likely the largest purchase of your life, and the process shouldn't be taken lightly.
There's no denying that Oregon is an amazing place to live. Portland is a highly sought-after metropolis, Bend is the second-fastest growing city in the U.S., and Happy Valley is currently giving Bend a run for its money with tons of development and more people moving to the suburb every day—to name a few.
CCCU loves the Pacific Northwest, and we're committed to serving our local community. Our Portland credit union is here to help first-time homebuyers in Oregon make all the right moves. Check out our top five mortgage tips below.
1. Open a first-time homebuyer savings account
As you gear up to buy a home, you'll want to be setting money aside for a down payment and closing costs. The earlier you start, the better. When you inevitably begin browsing home listings, your savings will allow you to take action when a property catches your eye.
Anyone planning to buy a home in Oregon
who hasn't owned one in the last three years can set up a first-time homebuyer savings account. You can deduct up to $5,000 when you file your taxes each year you have the account open. As long as you purchase a house within 10 years of opening the account to avoid paying penalties, this savings option can be very financially beneficial.
2. Give your credit score some TLC
While you're saving up for a down payment, it's a good idea to evaluate your credit and work on building it up if needed. Your credit doesn't need to be perfect to get a mortgage loan. But the higher your score, the lower the interest rate you'll get.
Most mortgages call for a credit score of at least 620
, though some accept borrowers with scores in the 500s. If you can raise your score to at least 740, you can usually count on the best possible interest rate, which would cut down on how much you end up paying over the life of the loan.
To give your credit score a boost, focus on paying down debt, make sure you make all payments on time, and open new credit accounts sparingly. Additionally, you'll want to try to keep your credit utilization ratio under 30%.
3. Act on historically low rates
2020 was a record-breaking year in many ways, and the real estate market was no exception. Interest rates on home mortgages dropped as low as 2.5%, which is substantially lower than they've been in years.
In 2021, rates are predicted to remain around 3%. This makes it an excellent time to buy a home
in Oregon, especially for those who enter 30-year fixed-rate loans.
4. Explore your options for a low-down-payment mortgage
Thanks to mortgage insurance, you can purchase a home with less than 20% down. With an FHA loan, you might be able to put down as little as 3.5%. If you buy a home for $340,000 (the average price in Oregon), your down payment could be as low as $11,900. Not only that, but you might be able to afford a more expensive house than would be possible if you were required to put 20% down.
5. Borrow from a credit union
First-time homebuyers should consider getting a mortgage loan from a credit union. Why? For one, borrowing from the same financial institution where you do the rest of your banking makes things a lot easier. They'll have your information on hand, and you can access all your accounts in one place.
As a credit union member, you might also pay reduced closing costs and potentially get a lower interest rate than you would from a larger bank. What's more, a community credit union is unlikely to sell your mortgage to another lender.