A variety of economic and housing market circumstances impact mortgage rates in Oregon. The state is experiencing a period of financial stability. In the past few decades, Oregon has diversified its economy and has achieved rapid growth in recent years, something that impacts current mortgage rates in Oregon.
The state’s Office of Economic Analysis expects growth to slow down moving forward, but only in a way that is normal as economies mature. The diversity of the state’s marketplaces should allow it to withstand recessions without too much turmoil.
While this prosperity is exciting, it also leads to high housing costs. The median sale price of a home in the United States was $436,800 in April 2023, while the average home value in the state was $339,000, with standard sales prices coming to $329,300. According to Zillow, median home values have increased by six percent in Oregon during the past year.
Ultimately, mortgage prices are primarily dictated by national issues, with local considerations such as the cost of living, foreclosure rates, housing market issues, and banking competition, also influencing figures.
Oregon is among the most expensive states to live in, ranked as having the sixth-highest cost of living in the country, according to a CNBC study. You should, therefore, be prepared to see some of those costs making their way into your mortgage rates, as lenders compensate for those expenses.
4 Elements That Affect Mortgage Rate & Refinance Rates in Oregon
Mortgages are highly variable. In practice, mortgage rates are dictated by a variety of micro and macroeconomic issues. For example, economic growth can lead to easier loan origination for banks as more investment funding is available. However, high housing costs in a region such as Portland, Oregon, can lead to high-interest rates due to risks associated with the loan.
It’s vital to consider the full range of factors that influence your mortgage or refinancing rates and do what you can to put yourself in the best to get a loan that meets all your needs. Ultimately, even just one percentage point on a loan can save or cost you thousands of dollars per year, so it’s important to understand your options.
Here’s a look at four issues that have a significant impact on your mortgage rates in Oregon.
Lenders lean heavily on credit scores to evaluate borrowers and determine reasonable mortgage rates. The Consumer Financial Protection Bureau recommends you verify your credit score before looking for a mortgage.
This analysis can help you identify any errors or pin down negative issues impacting your credit score. Once you have a clear understanding of your credit score, you can take action to improve it. Your credit score has an equal impact on your mortgage or refinancing rates, so it can be helpful to check on it periodically to stay ahead of any problems.
Lender and Loan Type
Different financial services providers tend to target varied audiences with their loans. If you live in rural Oregon, for example, you may find a local lender with an in-depth knowledge of the county’s economy can offer you a very different loan than a large national bank that is concerned about the value of a property in a small town with a limited economy.
Some lenders will offer loans specifically structured for first-time homebuyers, with smaller down payments and more services through the closing process, but with higher rates.
Conversely, other loan types may require a specific down payment, but save you money in the long run by requiring less mortgage insurance or letting you apply funds toward points that reduce your loan. This is a significant part of why a report from The Washington Post recommends mortgage seekers shop around to find the right lender and loan type.
A more extended loan will typically come at a higher rate, but with lower monthly payments. The Consumer Financial Protection Bureau explained that a shorter loan will, in most cases, come with a lower total cost than a longer option.
The key is to evaluate your specific situation and understand precisely what you can afford. This is especially true when refinancing your mortgage, as you can change the term to reduce costs if necessary.
It’s also important to take local market issues into account when evaluating loan terms and their impact on rates and monthly payments. For example, homeowners in Portland spend a disproportionate share of their monthly income on their mortgages.
The average household in Portland spent 26.1 percent of its income on its mortgage as of the second quarter of 2018, while the national average is just 17.5 percent. Understanding how loan term impacts monthly costs is vital in figuring out what you can actually afford.
If you have funds available, you can purchase points with your mortgage lender to achieve a lower interest rate for your loan. In practice, this reduces its long-term cost, but you’ll still want to be careful to avoid damaging your equity to all-in on points.
An informational report from the Federal Trade Commission recommended that individuals seeking a mortgage ask for a quote in a direct dollar amount, as many institutions will initially portray how many points are needed to reduce a rate, making it difficult to identify exactly how much money you’ll need to spend.
How to Get the Best Mortgage & Refinancing Rates in Oregon
The first thing to do is to shop around. The Consumer Financial Protection Bureau found that fewer than 50 percent of homebuyers compare lenders. However, going from a 4.5 percent rate to 4 percent on a conventional fixed-rate loan can save you as much as $60 per month, or $720 a year. Over thirty years, this adds up to $21,600.
We live in an era where it’s extremely simple to get quick quotes online or over the phone. Many institutions can process an application with just a quick form and a bit of time to analyze your application. Because of this, it’s easy to get quotes quickly from a variety of lenders and loan types.
As mentioned above, everything from the target audience of a loan to its term can impact your long-term costs. It’s valuable to shop around and obtain quotes for a few different loan varieties from different types of vendors.
Once you have initial quotes, it’s crucial to negotiate the details. RefiGuide explains that a typical mortgage will come with fees for everything from appraisals and loan origination to document preparation and title-related processes.
Some of these fees can be negotiated with your lender, so it’s important to ask about all of your options and go into the process already equipped with knowledge.
Recommended Mortgage Lending Companies in Oregon
Choosing the right lender is a very personal decision, but researching a combination of local, national, and online lenders can give you a full picture of your options. Here’s a look at four companies we recommend if you’re looking for loans in Oregon to help you get started:
- Quicken Loans: Quicken Loans is widely regarded as the nation’s largest online mortgage lender. It offers a fully automated online lending process, with rates for its 15-year fixed mortgage at 4.25 percent as of November 29, 2018.
- Ally Bank: Another online lender, Ally Bank serves the entire U.S., emphasizing its customer-friendly online lending processes. As of November 29, 2018, rates for its 15-year fixed mortgage product, assuming a loan of $300,000 and 20 percent down payment, was 4.25 percent for those with -0.10 points. Lower rates are available for those who purchase points.
- J.G. Wentworth: J.G. Wentworth has been expanding its home lending offerings in recent years, and currently offers a variety of loan options based around its accessible online platform. Though the lender doesn’t directly advertise its interest rates, you can easily obtain a quote on its website in just a couple of minutes without providing personal information.
- New American Funding: As one of NerdWallet’s top lenders for Oregon mortgages for those with a low credit score, New American Funding stands out for its blend of manual and automated processes that create flexibility. Like J.G. Wentworth, they don’t directly promote their rates, but instead, make it easy to get a direct quote by answering just a few questions online or via phone.