Last Updated on September 17, 2020 by Andrew Lee
With an abundance of forests, mountains, and rivers, Oklahoma has a lot to offer both to its residents and visitors. Add to this its vibrant culture and its many different indoor entertainment options, such as the Tulsa Ballet and the Norman Music Festival, and it’s easy to see why so many tourists love the state. It also boasts of booming industries, including telecommunications, aviation, and food processing, which contributes to the impressive employment rate. (Source: Livability.com)
Some of the best cities to live in including Tulsa, Muskogee, and Broken Arrow, but there are plenty more. All these, plus its low cost of living, make it attractive to home buyers. (Source: Sperling’s Best Places)
How much real estate costs in the state
A lot of the residents of The Sooner State proudly own and occupy their own homes, which is why homeownership rating is at 67.4%. (Source: U. S. Bureau of Census)
One of the primary reasons behind this is the affordability of real estate. The median home value in the state is $114,400, representing a difference of $80,900 with the nationwide median of $195,300. (Source: Zillow)
Prices and values of homes still depend on the particular type of residential building though. Single-family homes remain the most affordable, with an average property value of $81,563.47. Next are townhomes at $94,471.90, then condominiums at $114,762.99. The costliest of all housing types are PUD homes, with their values averaging at $114,861.27.
Home loan lending in OK
There are only very few people who can afford to purchase a house in one go. The majority of home buyers have to first apply for and secure a mortgage. Like almost everywhere in the country, the two primary types of housing loans available in this state are the fixed-rate and the variable-rate mortgages.
Before applying for a housing loan, it’s important for borrowers to take as much time as necessary to determine their capability of returning what they will potentially owe to the lender. Because homeownership comes with a huge financial responsibility, they should develop a sound financial plan, which includes forecasting possible future income, length of time they want to stay in the same home, and ensuring their credit score report doesn’t have any errors.
Fixed-rate mortgages: How they work
As the term already suggests, fixed-rate mortgages have a “fixed” or unchanging interest rate. Once borrowers sign the contract with the indicated rate, they can expect this to never change, no matter how long the term – the length of time they have to repay the loan – they choose. This then gives them security from inflation and the possible effects of market-related problems that push interest rates higher. In most cases, consumers opt for the 30-year term, giving them three decades to repay their debts.
30-year fixed-rate mortgage rates in the state average at 4.25%.
A 101 on adjustable-rate mortgage
Adjustable-rate mortgages (ARM), also known as variable-rate mortgages, have an interest rate that can “adjust.” It can move up or down, and the factors that dictate the change include foreign markets, employment rate, stock market, and inflation. The biggest attraction to these housing loans is their lower upfront rates applied during the first few years (typically up to the term’s first five years). Borrowers should note though that after this period, the interest rate can already change, and usually in an upward trend.
The average ARM rate here is 2.88%.
Money-saving tactics for current mortgage holders
As for existing homeowners who have taken out a mortgage, there are several strategies they can implement to reduce their overall housing loan expenditures. One of these is to check if they can reduce the interest rate by at least one percent. They should also assess if switching from an ARM to a fixed-rate mortgage (vice versa) will help them save in the long run.
Oklahoma Housing Finance Authority
USDA Rural Development – Single family loans
Home Affordable Refinance Program