Compare mortgage rates in Oklahoma.

Introduction to Mortgage Rates

Mortgage rates are calculated using a complex combination of factors that include the state of the economy and the borrower’s financial status. State interest rates generally follow national trends, but there can be variations due to local economic conditions and housing market dynamics. Oklahoma’s mortgage rates, for instance, are influenced by the state’s job market, cost of living, and housing supply.

Where Do Mortgage Rates Come From?

The Federal Reserve, aka the Fed, sets the short-term interest rates that banks use. Although home loan rates aren’t directly tied to Fed rates, they follow the same economic trends. So when the Fed’s interest rate is high, chances are mortgage rates will be too.

Other mortgage rate influencers include the bond market, inflation, and the unemployment rate. We’ll get into those more below.

How Interest Rates Affect Home Affordability

Mortgage rates have a bigger impact on home affordability than you may realize. Consider the national median home price of $412,300 for Q2 2024. With a 30-year fixed mortgage at 3.00%, the monthly payment is approximately $1,390. However, if the interest rate increases to 6.00%, the monthly payment jumps to $1,977. Such an increase — more than 40% — can affect affordability for many buyers.

Should Homebuyers Wait for Interest Rates to Drop?

The burning question, especially if you’re buying your first home, is: Should I jump in now or wait? All else being equal, the answer is probably don’t wait. Although mortgage rates have been higher than they were during the pandemic, they’re actually close to the 50-year average. And when rates do drop, the housing market will be flooded by buyers who have been sitting on the sidelines.

While it’s always tempting to wait for lower rates, your personal circumstances are more important. If you’re ready financially and need a new home, higher interest rates shouldn’t deter you. After all, a mortgage refinance could still lower your rate later.

Oklahoma Mortgage Rate Trends

Understanding historical mortgage rate trends can provide valuable insights into the future. In Oklahoma, mortgage rates have experienced significant fluctuations over the past two decades. From a high of 7.96% in 2000, rates steadily declined to 5.78% by 2003. While rates have risen in recent years, they remain below historical highs. Experts predict that Oklahoma mortgage rates will likely stay above historical lows for the foreseeable future.

Below you’ll find the average annual interest rate for Oklahoma and the United States for 2000 through 2018. (The FHFA stopped reporting the data in 2018.)

Historical Interest Rates in Oklahoma

Historical U.S. Mortgage Rates

Factors Affecting Mortgage Rates in Oklahoma

As mentioned above, many factors influence mortgage rates in Oklahoma and nationwide. Some of those are economic, but others are entirely within the homebuyer’s control. Here’s how they break down:

Economic Factors

•   The Fed: The federal funds rate serves as a benchmark for other interest rates, including mortgage rates.

•   Inflation: When inflation rises, the purchasing power of money decreases, making it more expensive for lenders to lend money. As a result, they may increase interest rates to compensate.

•   Unemployment rate: Lower unemployment can result in higher mortgage rates. A low unemployment rate indicates a strong economy, which typically leads to increased demand for housing. This increased demand puts upward pressure on home prices and, not surprisingly, mortgage interest rates.

Consumer Factors

•   Credit score: A higher credit score generally results in a lower mortgage interest rate. Lenders view borrowers with higher credit scores as less risky, making them more likely to offer favorable rates.

•   Down payment: Increasing your down payment may reduce your mortgage rate. A larger down payment lowers the loan-to-value ratio (LTV), the portion of the home’s value financed by the loan. A lower LTV reduces the lender’s risk and may result in a lower interest rate.

•   Income and assets: A steady income is important to lenders, who will check your employment history as well as your salary. Assets like investments and emergency savings also reassure lenders that you could still pay your mortgage in the case of a job loss or other financial setback.

•   Type of mortgage loan: Certain types of mortgages tend to have lower rates. For instance, adjustable rate mortgages typically offer lower initial rates than fixed-rate mortgages. Some government-backed loans, like VA mortgages, can also have lower rates. And a shorter loan term usually comes with a lower rate than longer terms.

Recommended: What Is the Average Down Payment On a House?

Mortgage Options for First-Time Homebuyers in Oklahoma

Oklahoma offers a variety of home loan options tailored to different homebuyers. Some options can make it easier for first-time buyers to enter the real estate market. To help you decide which mortgage is the right choice for your situation, we’ll dive into six of the leading types.

Fixed Rate Mortgage

As the name suggests, a fixed-rate mortgage has an interest rate that is fixed across the lifetime of the loan. Fixed-rate mortgages can be 10,15, 20, or 30 years. As we note above, shorter terms usually have lower interest rates than 30-year mortgages.

With a fixed-rate mortgage, as long as you make all your payments on time, your payment will never change. So as rents continue to increase, your fundamental housing cost stays the same.

Adjustable Rate Mortgage

With an adjustable rate mortgage, also known as an ARM, the interest rate can change periodically over the life of the loan. That means your monthly payment can also increase or decrease.

An ARM is labeled with two numbers, such as a 5/1 ARM. The first is the number of the years in the introductory period (5, 7, and 10 year ARMS are the most common). The second is the period when the interest rate will reset. So a 5/1 ARM has a 5-year introductory period, followed by one adjustment per year. A 7/6 ARM has a 7-year introductory period, followed by interest rate adjustments every 6 months.

FHA Loan

Backed by the Federal Housing Administration (FHA), these mortgages are designed to make homeownership more accessible for first-time buyers. They typically have more lenient credit and income requirements compared to conventional loans. FHA loans also allow for lower down payments, with a minimum of 3.5% for qualified borrowers. However, it’s worth noting that FHA loans often come with higher closing costs compared to conventional loans.

VA Loan

VA loans are available to veterans, active-duty military members, and certain reserve and National Guard members. These loans offer no down payment requirement, no private mortgage insurance, and typically lower interest rates compared to conventional loans. VA loans also have less stringent credit and income requirements.

USDA Loan

USDA loans are designed for low-income borrowers looking to purchase a home in a rural area. These loans are backed by the U.S. Department of Agriculture (USDA). Eligibility requirements include income limits and property location restrictions. USDA loans offer $0 down payment requirements and favorable terms.

Jumbo Loan

You might not be aware that conventional mortgage loans have a cap of $726,200 for a single-family home. Monroe County, Oklahoma, has a higher cap of $874,000. Higher-priced homes require what’s called a jumbo loan, also known as a nonconforming loan. Jumbo loans may have slightly higher interest rates compared to conforming loans, and tougher qualifying standards.

Popular Places to Get a Mortgage in Oklahoma

Securing a mortgage often depends on choosing the right location, where the cost of living and home prices are affordable. The cost of living refers to how much money it takes to maintain a basic standard of living in a given place.

The Cost of Living Index (COLI) ranks all 50 states against the overall average cost of living in the U.S. Oklahoma comes in at number 36, with an index of 103.1, a little over the national average. Oklahoma housing comes in a bit higher, with an index of 108.4.

The average monthly expenses for one person nationwide comes to $3,405 per month. Based on the COLI, Oklahoma’s statewide average is a bit higher.

Least Expensive Locations

For those seeking the most affordable housing options, several cities in Oklahoma offer median home prices below the state average, as of Q3 2024:

•   Deltona, $313,018. Up 4.1%.

•   Gainesville, $302,416. Up 2.6%. Gainesville has a booming job market in education, healthcare, and technology.

•   Jacksonville, $301,690. Up 1.0%. This city of 1 million has the second lowest cost of living in the state.

•   Lakeland, $324,803. Up 1.6%.

•   Lake City, $259,446. Up 5.3%.

•   Palm Bay, $314,431 median home price. Up 0.5% over the past year.

•   Panama City, $283.600. Up 1.3%.

•   Pensacola, $268,099. Up 1.6%. Pensacola offers a cost of living 13% lower than the national average.

Most Expensive Locations

Oklahoma also has several cities with higher median home prices, catering to those seeking luxury real estate. The median single-family home sale price in Oklahoma was $420,600 in March 2024, reflecting a year-over-year increase of 3.1%. Oklahoma’s single-family housing inventory was 40.5% higher year-over-year in March 2024.

Miami Beach is one of the most expensive cities in Oklahoma, with median home prices exceeding $530,000. Naples is known for its high real estate prices, with home prices often surpassing $600,000.

Recommended: Best Affordable Places in the U.S.

Securing a Competitive Mortgage Rate in Oklahoma

A competitive mortgage rate is crucial for saving money over the life of a loan. Even half a percentage point can translate to many thousands of dollars. For example, a $320,000 mortgage at 6.00% will cost you $370,683 in interest over 30 years. For the same mortgage amount at 6.50%, you’ll pay $408,140 – an additional $37,457.

First, you’ll want to do a little financial housekeeping:

•   Pay off high interest debt. Pay down credit cards as much as you can. This will lower your debt-to-income ratio. Mortgage lenders like to see a DTI ratio of 36% or under.

•   Save for a larger down payment. Remember, a higher down payment can help you secure a lower interest rate. Down payments of less than 20% are also subject to private mortgage insurance, which can cost between 0.5% and 1.5% of the loan amount annually.

•   Check your credit report for errors. Review your credit history, correct any errors, and dispute anything that doesn’t look familiar. You can get a free credit report at AnnualCreditReport.com.

Once you’ve aligned your proverbial ducks, here are two additional tips to help you secure the best possible rate:

Compare Interest Rates and Fees

Take the time to compare interest rates and fees from multiple lenders. And be sure to ask about any upfront costs or closing fees associated with the loan.

Homebuyers can compare the latest mortgage rates in Oklahoma by using a mortgage rate comparison tool. Just enter your home location, property value, and loan amount. Then filter the results by loan type, such as 30-year fixed, 15-year fixed, or 5-year ARM.

How to Get Preapproved

Getting preapproved for a mortgage strengthens your position as a buyer and allows you to move quickly when you find the right property. If you’re worried about interest rates rising, you can pay a fee to the lender to lock in your rate for up to 90 days.

You’ll fill out a thorough application and provide documentation. The mortgage preapproval process can take 10 days or more, but the work is well worth it.

Oklahoma Mortgage Resources: Assistance for Homebuyers

Oklahoma offers various resources and programs to assist homebuyers, particularly first-time buyers and those with limited financial resources.

First-Time Homebuyer Programs

The Oklahoma Housing Finance Corporation provides programs tailored to first-time homebuyers, including down payment assistance programs and closing cost assistance.

Learn more about Oklahoma First-time Homebuyer Programs here.

Tools & Calculators

SoFi provides online tools and calculators to help homebuyers estimate their monthly mortgage payments, resources to determine their eligibility for assistance programs and compare different loan options. These resources can empower homebuyers to make informed decisions throughout the homebuying process.

Refinancing Options in Oklahoma: Exploring Your Possibilities

Refinancing a mortgage can be a strategic move to lower your interest rate, reduce your monthly payment, or access cash for home improvements. Oklahoma offers various refinancing options, including the FHA Streamline Refinance, Interest-Rate Reduction Refinance Loan, and cash-out refinance.

Each option has its own benefits and requirements, so it’s essential to consult with a mortgage professional to determine the best refinancing strategy for your situation.

Closing Costs and Fees in Oklahoma: What to Expect

Closing costs associated with purchasing a home in Oklahoma can range from 3% to 6% of the purchase price. For a $300,000 mortgage to buy a $350,000 house, your closing costs could be between $9,000 and $18,000. It’s important to factor closing costs into your budget when planning for homeownership. Lenders are required to provide a loan estimate that outlines your estimated closing costs within three days of your application.

Closing costs can include any or all of the following:

•   Abstract and recording fees

•   Application fee

•   Appraisal fee

•   Attorney costs

•   Credit reporting, underwriting, and origination fees

•   Flood certification fee

•   Home inspection fee

•   Homeowners insurance

•   Home warranty

•   Mortgage points

•   Prepaid interest

•   Private mortgage insurance

•   Title search and title insurance fees

The Takeaway

Oklahoma’s mortgage landscape offers a range of options for homebuyers. By staying informed about current mortgage rates, exploring assistance programs, and carefully considering refinancing options, individuals can make strategic decisions that align with their financial goals and achieve successful homeownership in the Sunshine State.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

FAQ

What is a mortgage rate?

Simply put, a mortgage rate is the interest rate charged by a lender for borrowing money to purchase a home.

Will mortgage rates drop in Oklahoma?

Predicting future interest rate movements is challenging, and there is no guarantee that mortgage rates will drop in Oklahoma. However, state interest rates tend to follow national rates.

Will mortgage rates ever go back to normal?

The definition of normal interest rates varies over time. While current rates are higher than the rock-bottom rates we saw during the pandemic, they are close to the 50-year average, meaning they’re “normal” now.

Will Oklahoma home prices ever drop?

Real estate market conditions, including home prices, are influenced by supply and demand, economic factors, and location-specific dynamics. Predicting future price movements with certainty is difficult.

Is it a good time to buy a house in Oklahoma?

Whether it is a good time to buy a house in Oklahoma depends on individual circumstances and market conditions. If you’re financially ready and need a new home – due to a growing family or relocation — then it’s a good time to buy.

How to lock in a mortgage rate?

To lock in a mortgage rate, you can get preapproved for a mortgage and request a rate lock from the lender. This will secure the current interest rate for a specified period, typically up to 90 days.

How do mortgage interest rates work?

Mortgage interest rates represent the cost of borrowing money from a lender to finance a home purchase. Fixed rates remain the same for the lifetime of the loan, while adjustable rate mortgages (ARMs) have rates that change on a regular basis. For a 5/1 ARM, there’s a five-year introductory period after which your rate changes (up or down) every year.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOHL-Q324-029

Compare mortgage rates in North Dakota.

Introduction to Mortgage Interest Rates

Securing a home loan is a crucial step in the homebuying process in North Dakota. Mortgage interest rates are influenced by both the state of the economy and the borrower’s credit score, down payment, income, and assets. This guide explores factors that influence mortgage rates, popular mortgage types, and strategies for securing the best possible rate.

Where Mortgage Rates Come From

The Federal Reserve, also known as the Fed, plays a key role in shaping mortgage rates. The Fed sets the short-term interest rates that banks use as a benchmark for their lending rates. Although mortgage rates are not directly tied to Fed rates, they generally follow the same economic trends. When the Fed lowers interest rates, mortgage rates typically decrease, creating a more favorable environment for homebuyers.

An individual lender might fine-tune the rate a given homebuyer is offered based on several financial metrics, including the buyer’s credit score, income, assets, and more.

How Interest Rates Affect Home Affordability

Mortgage rates play a crucial role in determining home affordability. Even a seemingly small difference in interest rate can have a substantial impact on the affordability of a home. For instance, a 1% increase in interest rate on a $300,000 mortgage over 30 years can result in more than $70,000 in additional interest paid over the life of the loan.

Rising interest rates can contribute to middle-income Americans being priced out of the housing market. A modest increase in interest rates can make it challenging for families to qualify for a mortgage or afford the monthly payments, limiting their ability to purchase a home.

Should Homebuyers Wait for Interest Rates to Drop?

Many homebuyers grapple with the dilemma of whether to purchase a home immediately or delay in hope that mortgage rates will decrease. Those who qualify as a first-time homebuyer might be especially likely to hesitate because they typically have tighter budgets.

The bottom line? It is impossible to predict future interest rate movements with certainty, and there are several factors to consider when making this decision. First, delaying might give home prices time to rise. Second, postponing ownership also postpones your ability to build equity in a home.

Remember that you always have the option to undertake a mortgage refinance in the future if interest rates decline significantly or if your financial profile improves to the degree that you might qualify for a better rate.

North Dakota Mortgage Rate Trends

Understanding historical mortgage rate trends in North Dakota can provide valuable insights, especially if you have never shopped for a home in North Dakota before. Current mortgage rates in North Dakota remain below historical highs. The cost of living in the state is one of the lowest in the U.S., and average mortgage rates in the state have tended to fall below the U.S. average too.

Historical U.S. Mortgage Rates

To gain an even broader perspective, it is beneficial to examine historical U.S. mortgage rates. Whatever a homebuyer might hear about current mortgage rates in North Dakota, they are still far below the double-digit numbers of the 1980s.

Factors Affecting Mortgage Rates in North Dakota

Numerous factors influence mortgage rates in North Dakota and across the nation. These factors can be broadly categorized into economic factors and consumer factors, each playing a role in shaping the mortgage rate landscape.

Economic Factors

•  The Fed: As noted above, the federal funds rate, set by the Federal Reserve, serves as a benchmark for other interest rates, including mortgage rates. When the federal funds rate increases, consumers may see higher mortgage rates.

•  Inflation: An increase in the general price level of goods and services impacts mortgage rates. When the purchasing power of money decreases it becomes more expensive for lenders to lend money and they may increase interest rates to maintain profit margins.

•  Unemployment: A high unemployment rate may prompt the Fed to lower its rate, so unemployment has an indirect effect on mortgage rates.

Consumer Factors

•  Credit score: Lenders view borrowers with higher credit scores as less likely to default on their loans, making a lender more willing to offer lower interest rates.

•  Down payment: Lenders may offer lower interest rates to borrowers who make larger down payments. These buyers have a greater ownership stake in their home from Day One, lowering risk for the lender.

•  Income and assets: A steady income and sufficient assets provide assurance to lenders that the borrower has the financial capacity to repay the loan.

•  Type of mortgage loan: The type of mortgage loan selected can also impact the interest rate. For example, adjustable-rate mortgages (ARMs) often have lower initial rates compared to fixed-rate mortgages. Additionally, government-backed loans, such as VA mortgages, may offer more favorable rates.

Recommended: Average Monthly Expenses for One Person

Types of Mortgages Available in North Dakota

North Dakota offers a diverse range of mortgage types to cater to the varying needs of homebuyers. These include fixed-rate mortgages, adjustable-rate mortgages, FHA loans, VA loans, USDA loans, and jumbo loans. Would-be homeowners in North Dakota might want to take a close look at their options.

Fixed-Rate Mortgage

Fixed-rate mortgages offer stability and predictability by locking in the interest rate for the entire loan term. This ensures that the principal and interest payments remain constant throughout the life of the loan. Fixed-rate mortgages are commonly available in terms of 10, 15, 20, or 30 years. The choice of loan term depends on the borrower’s financial situation and preferences. Shorter loan terms generally come with lower interest rates but higher monthly payments, while longer loan terms offer lower monthly payments but higher overall interest costs.

Adjustable-Rate Mortgage (ARM)

Adjustable-rate mortgages (ARMs) provide initial lower interest rates compared to fixed-rate mortgages. However, these rates can adjust periodically after a fixed introductory period, based on prevailing market conditions.

The initial lower interest rate of ARMs can provide significant savings for borrowers who plan to sell their property or refinance before the fixed introductory period concludes. However, borrowers should carefully consider the potential for future interest rate increases and ensure that the long-term financial implications align with their plans.

FHA Loans

FHA loans, insured by the Federal Housing Administration, are designed to make homeownership more accessible to borrowers with limited financial resources. They typically have more lenient eligibility requirements and allow for lower down payments compared to conventional loans. The federal government’s backing of the loans provides lenders with a safety net in case of borrower default. This allows lenders to offer more flexible eligibility criteria.

VA Loans

VA loans are exclusively available to eligible veterans, active-duty military members, Reserve and National Guard members, and surviving spouses. These loans offer competitive interest rates and do not require a down payment, making them an attractive option for borrowers who request the VA’s certificate of eligibility and qualify for the loan.

USDA Loans

USDA loans are specifically designed for borrowers whose income falls beneath a certain ceiling to purchase a home in a rural area. These loans are backed by the U.S. Department of Agriculture (USDA) and offer favorable terms, including no down payment requirement and competitive interest rates.

Jumbo Loan

A jumbo loan is designed for borrowers seeking to finance a home that exceeds the conforming loan limit set by Fannie Mae and Freddie Mac for its specific geographic location. These loans typically require a larger down payment and may have stricter credit score requirements compared to conventional loans. In most places in the U.S., and throughout North Dakota, the conforming loan limit for a single-family home is $806,500.

Popular Places to Get a Mortgage in North Dakota

Securing a mortgage often hinges on choosing the right location, where home prices are affordable. Here are some popular places in North Dakota to obtain a mortgage.

Least Expensive Locations

The following locations in North Dakota are some of the least expensive places to obtain a mortgage, based on how local costs compare to the cost of living in the U.S. See more options in SoFi’s list of best affordable places in the U.S.:

•  Bismarck: This is one of the state’s larger cities and has a cost of living slightly below the state average which, as noted above, is already one of the lower cost of living ratings for the U.S.

•  Valley City: This small city of fewer than 10,000 people has a cost of living profile similar to that of Bismarck. It’s about an hour’s drive from Fargo.

•  West Fargo: This is an especially family-friendly city and has a cost of living rating that is five points lower than the overall North Dakota number.

Most Expensive Locations

North Dakota is so relatively affordable overall that even Williston, one of its more expensive cities based on cost of living, is still seven points below the U.S. average.

Tips for Securing a Competitive Mortgage Rate in North Dakota

Obtaining a competitive mortgage rate can lead to significant savings over the life of a loan. Take these steps for best results.

Compare Interest Rates and Fees

Shopping around and comparing interest rates from multiple lenders is essential to securing the best mortgage deal. It is also important to inquire about any upfront costs or closing fees associated with the loan. It may take some time to compare interest rates and fees from various lenders to reveal the full picture, but it can yield significant savings.

Get Preapproved

Obtaining preapproval for a mortgage strengthens your position with sellers as a serious buyer. Going through the mortgage preapproval process means sharing fairly comprehensive financial information with a potential lender, but once you’ve done so and been preapproved, you can take swift action when you find your dream home. Additionally, some lenders offer the option to lock in the interest rate for a certain period, providing protection against possible rate increases.

Recommended: Mortgage Prequalification vs. Preapproval

North Dakota Mortgage Resources

North Dakota has several programs to assist homebuyers, particularly if you are buying your first home, have limited financial resources, or both.

First-Time Homebuyer Programs

The state’s FirstHome program is for those who have not owned a principal residence in the last three years (a common way that programs in many states define first-time homebuyers). There are both income and home purchase price limits for eligibility. Other programs are directed at single parents with at least one dependent living at home, military members, or people with a permanent disability. Find all the details on the North Dakota Housing Finance Agency (NDHFA) site .

Down Payment Assistance

A down payment assistance program can make all the difference for homebuyers who have limited funds. Through its DCA (Down Payment and Closing Cost Assistance) program, NDHFA provides low-income buyers with mortgage loans to cover down payment and closing costs up to three percent of the first mortgage loan amount. The funds come in the form of a credit toward the homebuyer’s out-of-pocket cash needs. Again, there is an income ceiling. The home must also be a primary residence.

Tools & Calculators

Online tools and calculators can help would-be homeowners in North Dakota run the numbers on mortgage scenarios, home prices, and see how different down payment amounts might affect their costs.

Refinancing Options in North Dakota

Homeowners in North Dakota, like others nationwide, can seek out a refinance of their mortgage from a bank or other mortgage lender. Those with certain government-backed loans also have the opportunity to refinance their existing mortgage. The FHA Streamline Refinance program, for example, is designed for homeowners with FHA-insured mortgages. It offers a simplified refinancing process with minimal documentation requirements, making it easier for homeowners to obtain a lower interest rate.

VA Interest-Rate Reduction Refinance Loans (IRRRL) provide an opportunity for veterans and other VA loan holders to refinance their loans and potentially lower their monthly payments. This program allows for a streamlined refinancing process without the need for a new appraisal.

Closing Costs, Taxes, and Fees in North Dakota

Closing costs and fees are additional expenses associated with purchasing a home. In North Dakota, buyers can expect to pay between 3% and 6% of the home’s purchase price in closing costs. Higher-priced homes and properties in certain areas may incur higher closing costs.

The Takeaway

North Dakota’s mortgage landscape offers any option a would-be homebuyer might need. By staying informed about current mortgage rates, exploring the state’s assistance programs, and paying close attention to personal financial metrics such as credit score, individuals can make the right moves and achieve successful homeownership in North Dakota.

FAQ

This section addresses frequently asked questions related to mortgage rates in North Dakota.

Will mortgage rates drop in North Dakota?

It’s hard to say with certainty if mortgage rates will drop in North Dakota because there are so many things that contribute to rate increases and decreases.

Will mortgage rates ever go back to normal?

The definition of “normal” mortgage rates can vary greatly over time. Mortgage rates are influenced by a complex interplay of economic factors and personal financial metrics, and one generation’s normal might be another generation’s high or low.

Will North Dakota home prices ever drop?

Real estate market trends are influenced by supply and demand, economic conditions, and local market dynamics. Predicting future home price movements with certainty is challenging, and your best bet for insight is to ask a real estate professional who specializes in the specific market area you’re wondering about.

Is it a good time to buy a house in North Dakota?

The decision of whether it is a good time to buy a house in North Dakota depends on individual circumstances, financial readiness, and market conditions. Using a home affordability calculator to determine what your budget would be, and then looking at real estate web sites to see if any homes in your chosen area fit that budget, would be a good way to assess whether it might be time to buy.

How do I lock in a mortgage rate?

Some lenders offer the option to lock in the interest rate for a certain period, typically ranging from 30 to 90 days. This often requires paying a fee to the lender. Locking in the interest rate provides protection against potential rate increases during the property search and purchase process.

How do mortgage interest rates work?

Mortgage interest rates are determined by a combination of factors, including the prevailing federal funds rate set by the Federal Reserve, inflation, and unemployment rate, as well as the borrower’s credit score, down payment amount, income, assets, and type of mortgage loan.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.

¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SOHL-Q324-089

Compare mortgage rates in Maine.

Introduction to Mortgage Interest Rates

Securing a home loan is a crucial step in the homebuying process in Maine, and understanding mortgage interest rates is essential for making an informed financial decision. Mortgage rates dictate the interest fees charged by lenders for borrowing money to purchase a home. You may be focused on prevailing interest rates as you think about purchasing a home, but your credit score and the type of mortgage loan you choose will play a significant role in determining the interest rate you’re offered. Let’s look at how all of this plays out in the Pine Tree State.

Where Mortgage Rates Come From

The Federal Reserve plays a crucial role in setting short-term interest rates, which serve as a benchmark for other interest rates, including mortgage rates. While mortgage rates are not directly tied to Fed rates, they tend to follow similar economic trends. When the Fed’s interest rate is high, mortgage rates are likely to be higher as well. Lenders then adjust the specific rate they offer an individual borrower up or down based on the person’s financial data: credit score, income and asset levels, even how much of a deposit they plan to put down on a given property.

How Interest Rates Affect Home Affordability

Mortgage rates have a significant impact on home affordability. A seemingly small difference in mortgage rates can have a significant impact on average monthly expenses and home affordability. For instance, a one percentage point increase in interest rate on a $200,000 mortgage can result in an increase of over $120 in monthly payments. For a family on a tight budget, this could create a noticeable pinch. Moreover, in the 30 years it would take to pay off the loan, the borrower would spend more than $45,000 on additional interest.

Should Homebuyers Wait for Interest Rates to Drop?

Many homebuyers wonder if it is smarter to purchase a home immediately or wait for mortgage rates to decrease. This may be an especially challenging question if you are buying your first home and don’t have proceeds from the sale of a first residence to use as a deposit.

While waiting for lower interest rates may seem like a prudent strategy, it is essential to consider that interest rates are unpredictable. Delaying a home purchase also delays building equity in a home. And home prices could rise while you are waiting for interest rates to drop.

Remember that homeowners do have the option to refinance a mortgage if interest rates drop meaningfully after they make a home purchase. (It’s also worth looking into a refinance if your personal financial situation changes significantly — for example if your credit score increases.)

Maine Mortgage Rate Trends

Understanding historical mortgage rate trends in Maine can put current rates into context. Maine’s average mortgage rate tends to hover close to the national average. Take a look at how this plays out over almost two decades (2018 was the last year state averages were tracked).

Historical U.S. Mortgage Rates

Homebuyers following current mortgage rates in Maine could also look at average U.S. mortgage rates over several decades to gain some perspective. Rates may feel high in the present, but they are still well below the numbers seen in the 1980s.

Factors Affecting Mortgage Rates in Maine

Numerous factors influence mortgage rates in Maine and nationwide. Some of these factors are economic, while others are entirely within the homebuyer’s control.

Economic Factors

•  The Fed: As noted previously, the Federal Reserve’s federal funds rate serves as a benchmark for other interest rates, including mortgage rates. When the Fed raises the federal funds rate, it becomes more expensive for banks to borrow money, leading to higher mortgage rates. Conversely, a decrease in the federal funds rate can result in lower mortgage rates.

•  Inflation: Inflation, or the general increase in prices, also affects mortgage rates. As inflation rises, the purchasing power of money decreases, making it more expensive for lenders to lend money. To compensate for this, lenders may increase interest rates.

•  Unemployment: The unemployment rate is a metric the Fed watches closely. If unemployment rises, the Fed may lower interest rates to prompt an upswing in the job market.

Consumer Factors

•  Credit score: A higher credit score indicates a lower risk of default for the borrower. As a result, lenders are more likely to offer lower mortgage interest rates to borrowers with good credit scores.

•  Down payment: A larger down payment reduces the loan amount, which lowers the risk for the lender. Consequently, lenders may offer lower mortgage interest rates to borrowers who make larger down payments.

•  Income and assets: Lenders consider employment history, salary, investments, and emergency savings when assessing the borrower’s ability to repay the loan. Borrowers with a stable income and sufficient assets are more likely to secure lower mortgage interest rates.

•  Type of mortgage loan: Adjustable-rate mortgages (ARMs) often have lower initial rates compared to fixed-rate mortgages. Government-backed loans, such as VA mortgages, may also offer lower rates.

Types of Mortgages Available in Maine

Homebuyers in Maine have access to any type of mortgage they might need to suit their specific financial situation. Conventional loans are a popular choice and are offered by banks, credit unions, and other lenders. They can be fixed-rate or adjustable-rate. Conventional loans do not have a maximum allowable amount, although borrowers in Maine who need a loan for more than $806,500 will require a jumbo loan (more on that below).

Fixed-Rate Mortgage

With a fixed-rate mortgage, the interest rate remains the same for the entire loan term, typically 10 to 30 years. This provides peace of mind to borrowers, as they can accurately budget their monthly mortgage payments without worrying about fluctuations in interest rates. The choice of loan term does affect the monthly payment amount and the total interest paid over the life of the loan. Shorter loan terms result in higher monthly payments but lower total interest paid, while longer loan terms have lower monthly payments but higher total interest paid.

Adjustable-Rate Mortgage (ARM)

Adjustable-rate mortgages offer lower interest rates than fixed-rate loans for an initial period, but after that time the interest rate can adjust periodically based on market conditions. This arrangement can be advantageous for homebuyers who feel fairly certain they will sell or refinance their home before the initial fixed-rate period ends. However, it is essential to be prepared for the interest rate to adjust upward after the fixed-rate period, and to have a plan for paying the bigger bill.

FHA Loans

FHA loans, backed by the Federal Housing Administration, offer more flexible eligibility criteria compared to conventional loans. They have more lenient credit score and down payment requirements, making them an especially attractive option for first-time homebuyers and those with less-than-perfect credit.

VA Loans

VA loans, offered by the Department of Veterans Affairs, are a unique mortgage option available to eligible veterans, active-duty military personnel, Reserve and National Guard members, and surviving spouses. These loans offer several advantages, including no down payment requirement and competitive interest rates. To determine eligibility, would-be borrowers need to apply to the VA for a Certificate of Eligibility. With that in hand, they can work with a participating lender to apply for the loan.

USDA Loans

USDA loans, backed by the U.S. Department of Agriculture, are for borrowers whose income falls below a maximum ceiling and who are seeking to purchase a home in a rural area. Favorable terms include no down payment requirement and competitive interest rates.

Jumbo Loans

Jumbo loans cater to borrowers seeking a mortgage that exceeds the conventional loan limit of $806,500 for a single-family property. The maximum conventional loan amount is set by the Federal Housing Finance Agency (FHFA) and changes annually. Jumbo loans, which are larger than this limit, are also called nonconforming loans.

Popular Places to Get a Mortgage in Maine

Securing a mortgage often depends on choosing the right location. The cost of living and housing prices vary across different locations in Maine, but the state as a whole is the 14th most expensive one in the U.S. with a cost of living that is 8 points above the national average. Here are some of the least (and most) costly places you might go home-shopping in Maine.

Least Expensive Locations

When compiling a list of the best affordable places in the U.S., SoFi looked at cost-of-living data and average home values, among other factors. Here are the Maine cities that ranked as least-expensive locations:

•  Presque Isle: Set east of the North Maine Woods, this town of fewer than 10,000 people is known for year-round recreation in the beautiful outdoors. It’s also one of the less costly places to live in Maine.

•  Gardiner: A small, historic community, Gardiner is attractive in part because it is within commuting distance of the state capital, Augusta.

•  Waterville: Home to Colby and Thomas colleges, Waterville is also 11 points below average on cost-of-living rankings in Maine.

•  Auburn: Half an hour north of Portland, Auburn is one of Maine’s more populous cities, but still small at around 25,000 people.

Most Expensive Locations

Easy waterfront access (whether ocean or a lake) is a hallmark of Maine’s most-expensive towns. Southport, Kennebunkport, Mount Desert, Brooklin, and South Bristol all boast beautiful views and average home selling prices north of $1 million.

Recommended: The Cost of Living in the U.S.

Tips for Securing a Competitive Mortgage Rate in Maine

Obtaining a competitive mortgage rate can save borrowers thousands of dollars over the life of the loan. Take these steps to get the best possible rate:

Compare Interest Rates and Fees

Shopping around and looking closely not only at interest rates but also at fees from multiple lenders is crucial for securing a good mortgage deal. It’s essential to inquire about both upfront costs and closing fees associated with the mortgage loan. These fees can vary among lenders and can impact the overall cost of the loan.

Get Preapproved

Having a mortgage preappproval demonstrates to sellers that the homebuyer is a serious and qualified buyer. It also enables homebuyers to move swiftly when they find a suitable property, as they have already completed a significant portion of the mortgage application process.

If you’re worried that interest rates may drift northward, consider locking in your mortgage rate. By paying a fee to the lender, you can secure the current interest rate for a specified period, typically ranging from 30 to 90 days. This provides peace of mind and protection against potential interest rate increases.

Maine Mortgage Resources

The state of Maine recognizes the challenges faced by homebuyers and provides several resources and programs to facilitate homeownership.

First-Time Homebuyer Programs

The Maine State Housing Authority First Home Loan program offers low fixed-rate mortgages with little or no down payment required. Homebuyers can apply through a participating lender.

Down Payment Assistance

Down payment assistance programs provide financial support to help homebuyers overcome the challenge of saving for a down payment. In Maine, the Maine State Housing Authority’s First Generation Program provides up to $10,000 for qualified homebuyers who have never lived in a home owned by their biological parents or legal guardians. The program is also available to borrowers who have been in foster care at some point in their childhood. Attendance at financial and homebuyer education programs are required to qualify.

Tools & Calculators

Maine offers a mortgage calculator to help homebuyers estimate their mortgage payments including insurance and property taxes. Or use one of these helpful calculators:

Refinancing Options in Maine

Homeowners in Maine have the opportunity to refinance their existing mortgage through a conventional bank or other lender. A mortgage refinance can help owners to secure lower interest rates and potentially save money. There are also government-backed refinance options for eligible borrowers:

FHA-insured homeowners can take advantage of the FHA Streamline Refinance program, which allows them to refinance with minimal documentation and without the need for a new appraisal. This simplified process enables homeowners to obtain lower interest rates and reduce their monthly mortgage payments.

VA loan holders have the option to pursue an Interest-Rate Reduction Refinance Loan (IRRRL) to lower their monthly mortgage payments. This program allows eligible veterans and military personnel to refinance their VA loans and secure a lower interest rate, potentially resulting in significant savings over the life of the loan.

Recommended: Do You Qualify as a First-Time Homebuyer?

Closing Costs, Taxes, and Fees in Maine

Homebuyers in Maine should be aware of the associated closing costs, taxes, and fees when purchasing a home. Closing costs in Maine typically range from 3% to 6% of the home’s purchase price. These costs cover various expenses related to the home purchase, including title insurance, appraisal fees, loan origination fees, and recording fees. The specific closing costs associated with a home purchase in Maine can vary depending on the property value and location.

The Takeaway

Maine’s mortgage landscape offers a range of options for homebuyers, catering to different financial situations and needs. Each loan type has its own advantages and disadvantages, and homebuyers should carefully consider their financial circumstances and long-term goals when selecting the most suitable mortgage option. Knowing current mortgage rates and exploring available assistance programs can help homebuyers make smart decisions in the land of lobster and lighthouses.

FAQ

What is a mortgage rate?

A mortgage rate is the interest rate charged on a mortgage loan. It determines the amount of interest paid over the life of the loan and directly affects the size of the monthly mortgage payment.

Will mortgage rates drop in Maine?

Predicting future mortgage rate movements is challenging, and there is no guarantee that rates will drop. Economic conditions, inflation, and the Federal Reserve’s monetary policy influence mortgage rates.

Will mortgage rates ever go back to normal?

There isn’t really a “normal” where mortgage rates are concerned. They have fluctuated throughout history.

Will Maine home prices ever drop?

Real estate market conditions, including home prices, are influenced by supply and demand, economic factors, and local market dynamics. Predicting future home price movements is uncertain but a local-market expert (in the form of a local real estate agent) might give you some insight into what the future holds.

Is it a good time to buy a house in Maine?

The decision of whether it is a good time to buy a house depends on your personal financial circumstances and market conditions. Factors such as mortgage rates, home prices, and your long-term goals (both residential and financial) should be carefully considered.

How do I lock in a mortgage rate?

Borrowers can lock in a mortgage rate by paying a fee to the lender, which guarantees the interest rate for a specific period, such as 30 or 90 days. This can provide protection against potential rate increases.

How do mortgage interest rates work?

Mortgage interest rates are determined by various factors, including the prevailing economic conditions, inflation, unemployment, and the Federal Reserve’s monetary policy. Lenders use these factors — as well as each borrower’s individual financial metrics — to assess the risk associated with lending money and set interest rates accordingly.

SoFi Mortgages
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*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.

¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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