Oregon boasts of a diverse landscape, from the Cascade Mountains to the Pacific Coastline to its evergreen forests nestling its beautiful cities like Portland, Salem, and Eugene. It is home to the international headquarters of Nike, as well as many other businesses and corporations centered on technology, agriculture, and tourism. Much thanks to the strong economy of the state, most of its residents are employed and have a good median household income. These are just some of the biggest reasons many people choose to buy a home here. (Source: Livability.com)

Becoming a home owner in the state

In the Beaver State, 61.1% of homes are owned. (Source: U. S. Bureau of Census)

One thing that home buyers should take note of is that cost of living here is more expensive than in many other parts of the country. This is primarily influenced by the state’s housing prices and values. The median value of homes here is $299,400, whereas the national median is only at $195,300. (Source: Zillow)

This doesn’t automatically mean though that consumers can no longer become a home owner. Through the establishment of a strong financial ground, they can qualify for a mortgage. They just have to ensure they borrow only what they can really afford to pay back.

Understanding the basics of a mortgage

Mortgages are loans used for purchasing land or real estate property. Lenders use the property’s value as a security for the money they lent until the borrower completes the repayment. In OR, the most common loan term – the number of years a borrower has to make payments towards the capital and the interest rate – is 30 years.

A mortgage holder who can’t make the repayments on time or who can no longer afford to can have his/her home foreclosed or repossessed by the company that issued the loan. The lender can then sell the property again to recoup their loss.

Fixed-rate mortgages

Housing loans come in a number of forms, although most home buyers in the state opt for the fixed-rate type, which comes with a permanent interest rate.

Borrowers who want the security of knowing just how much they will pay for every month towards their mortgage will find this type of mortgage more suitable. Because its interest rate won’t change, regardless of what happens to the market, they can easily predict their expenditures.

30-year fixed-rate mortgages in the state have an average interest rate of 4.17%.

Adjustable-rate mortgages

As the name already implies, adjustable-rate mortgages (ARMs), also known as variable-rate mortgages, come with interest rates that can move up or down, depending on several factors. Inflation, employment rate, as well as foreign and stock markets can all make ARM interest rates go up or down.

The biggest attraction to these housing loans is their initial lower rates applied during the first few years of the term (usually up to the first five years). After this, the rates can already change. This is the primary reason it is recommended for consumers who only intend to live in the same house for a short period of time.

Help in qualifying for and paying off mortgages

First-time home buyers who need help in making a down payment can ask for assistance from the Oregon Housing and Community Services. The organization offers programs designed to provide qualifying applicants with up to $15,000 for down payment and closing costs.

For those having a hard time making mortgage payments, the USDA Rural Development (for single-family home owners) has payment assistance programs focused on helping increase the repayment ability of borrowers.

Lastly, those interested in refinancing their current mortgages can seek the guidance of the Home Affordable Refinance Program to ensure that they really will benefit from this process.

References:

Oregon Housing and Community Services

USDA Rural Development

Home Affordable Refinance Program

The Federal Reserve Board