Compare mortgage rates in Wyoming.

Introduction to Mortgage Interest Rates

Mortgage interest rates are the fees charged by lenders for borrowing money to purchase a home. In Wyoming, as elsewhere in the U.S., mortgage rates play a significant role in determining the affordability and accessibility of housing. If you’re thinking of buying in Wyoming, take time for a brief overview of current mortgage rates in Wyoming, learn about the factors that shape these rates — and how to get the best possible rate for you.

Where Mortgage Rates Come From

The Federal Reserve, also known as the Fed, sets the short-term interest rates that banks use as a benchmark for determining their own lending rates. Although mortgage rates are not directly tied to Fed rates, they tend to follow similar economic trends. Mortgage rates are also influenced by other economic factors, such as inflation. And then lenders fine-tune the rates they offer each individual consumer based on the borrower’s personal financial profile: how they have handled debt in the past (aka, your credit score), your income, and more. We’ll delve into the nitty-gritty of that later.

How Interest Rates Affect Home Affordability

Mortgage rates have a profound impact on home affordability, often playing as significant a role as the purchase price of the home. In recent years, interest rates combined with high housing prices conspired to keep many homebuyers, especially those buying a first home, out of the market. A borrower who took out a $300,000 home loan when interest rates were around 3.00% in 2020 would have faced a very different monthly payment if they borrowed the same amount when interest rates hovered around 6.00% in 2023.

Recommended: Average Monthly Expenses for One Person

Should Homebuyers Wait for Interest Rates to Drop?

All this talk of lower rates may lead you to wonder if you should wait for interest rates to dive before dipping into the housing market. The answer is often no. While it’s tempting to wait for lower rates, there are several factors to consider: First, predicting the exact timing of interest rate drops is nearly impossible — and while you are waiting you might miss out on favorable home prices. Secondly, sitting out of the market often means you delay building equity in a home that you own.

Finally, homeowners have the option to do a mortgage refinance in the future if interest rates decline (or if your credit score improves significantly, in which case you may qualify for a lower rate).

Wyoming Mortgage Rate Trends

Examining historical mortgage rate trends in Wyoming shows that from year to year, rates may not swing significantly. Moreover, rates in Wyoming tend to closely follow the national average.

Historical U.S. Mortgage Rates

For more perspective, it’s beneficial to examine U.S. mortgage rates over a period of several decades. Rates may be higher in recent years than in 2020, as noted above, but they are nowhere near the double-digit highs of the 1980s.

Factors Affecting Mortgage Rates in Wyoming

Numerous factors influence mortgage rates in Wyoming and across the nation. These factors can be broadly categorized into economic factors and consumer factors, each playing a role in determining the rates offered by lenders.

Economic Factors

•  The Fed: When the Fed lowers its rate, it becomes cheaper for banks to borrow money, potentially resulting in lower mortgage rates.

•  Inflation: The rate at which the price of goods and services increases can become steep enough that banks feel the value of money eroding. This makes it more costly for lenders to lend money. To compensate for this, they may increase mortgage rates to maintain their profit margins.

•  Unemployment: Unemployment rates are a metric the Fed takes seriously. When unemployment is high, the Fed may lower its rates to try to stimulate the job market. (Low unemployment, one sign of a strong economy, may mean more people feel confident about getting into the home market, increasing competition for properties.)

Consumer Factors

•  Credit score: A higher credit score indicates a borrower’s responsible credit history and financial stability, making them less risky to lend to. As a result, lenders are more likely to offer lower mortgage rates to borrowers with higher credit scores.

•  Down payment:A larger down payment reduces the loan amount required from the lender, lowering the lender’s risk. Consequently, borrowers who make larger down payments are often rewarded with lower mortgage rates.

•  Income and assets: Having reliable paychecks and a nest egg to fall back on make a borrower less risky from a lender’s point of view, and may qualify them for lower mortgage rates.

•  Type of mortgage loan: Certain loan types, such as adjustable-rate mortgages (ARMs) and government-backed loans like VA mortgages, may offer lower rates compared to conventional fixed-rate mortgages (although the ARM’s rate does adjust over time).

Types of Mortgages Available in Wyoming

Wyoming offers homebuyers a variety of mortgage types. Each mortgage type has its own unique characteristics, advantages, and disadvantages, making it essential for homebuyers to carefully evaluate their options and choose the loan that best aligns with their financial goals.

Conventional loans, which are not backed by government agencies, offer flexibility in terms of interest rates and loan amounts. They can be fixed-rate or adjustable-rate.

Fixed-Rate Mortgage

Fixed-rate mortgages provide stability and predictability by locking in the interest rate for the entire loan term. This means that the monthly mortgage payments remain constant throughout the life of the loan, regardless of fluctuations in market interest rates.

Fixed-rate mortgages are available in terms of 10, 15, 20, or 30 years, allowing borrowers to choose a loan term that aligns with their financial goals and repayment capacity. The longer the term, the lower the monthly payments but the more interest a borrower will pay over the life of the loan.

Adjustable-Rate Mortgage (ARM)

Adjustable-rate mortgages (ARMs) offer lower initial interest rates compared to fixed-rate mortgages. However, these rates can adjust periodically, typically after a specified introductory period, based on changes in a predetermined index.

ARMs can be attractive to borrowers who plan to sell their home or refinance before the introductory period ends, as they can take advantage of the lower initial rates. But it’s crucial for borrowers to understand how much their monthly payments might rise with an ARM before opting for this type of mortgage.

FHA Loan

FHA loans, insured by the Federal Housing Administration, are designed to make homeownership more accessible to borrowers with limited financial resources. These loans typically have more lenient credit and income requirements compared to conventional loans. FHA loans also allow for lower down payments. They may be suitable for first-time homebuyers and those with less-than-perfect credit.

However, FHA loans come with additional upfront and ongoing fees, such as mortgage insurance premiums, which should be factored into the overall cost of the loan.

VA Loans

VA loans are available to eligible veterans, active-duty military members, Reserve and National guard members, and surviving spouses. These loans are backed by the U.S. Department of Veterans Affairs (VA) and offer several benefits, including no down payment requirement and competitive interest rates. VA loans may involve funding fees, which should be considered when exploring this loan option. The first step for those interested in a VA loan is to explore what is needed to obtain a Certificate of Eligibility from the VA.

USDA Loans

USDA loans, backed by the U.S. Department of Agriculture (USDA), are designed to assist borrowers who fall below the USDA income threshold in purchasing homes in rural areas. These loans offer competitive interest rates and do not require a down payment. USDA loans are an excellent option for eligible borrowers seeking affordable housing in rural communities.

Jumbo Loans

Jumbo loans are conventional loans that exceed the conforming loan limits set by the Federal Housing Finance Agency (FHFA). In Wyoming, as in most areas of the U.S., you’ll need a jumbo loan if you require a loan greater than $832,750. The one exception is Teton County, where the conforming loan limit is higher: $1,249,125. A jumbo loan may require a larger down payment and stricter credit requirements compared to a conforming loan.

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

Popular Places to Get a Mortgage in Wyoming

Securing a mortgage often depends on choosing the right location, where home prices are affordable. Wyoming offers options for every housing need and budget. Cheyenne, Casper, Gillette, and Laramie are the state’s largest cities and thus are popular places to get a mortgage in Wyoming. But they are still relatively small markets as Wyoming is America’s least populated state. Now let’s take a closer look at costs:

Least Expensive Locations

For those seeking more affordable housing options, Wyoming has several cities with a more moderate cost of living, as noted in SoFi’s guide to best affordable places in the U.S. These include Casper, Cheyenne, and Cody. Casper and Cody are especially family-friendly, as is Green River, another less-expensive location.

Most Expensive Locations

The Town of Jackson, in the Jackson Hole valley, is known for its ski resorts, its natural beauty — and its higher housing costs. It is also the highest cost-of-living location in Wyoming.

Tips for Securing a Competitive Mortgage Rate in Wyoming

Obtaining a competitive mortgage rate can significantly reduce your overall cost of living. Here are some tips to help homebuyers secure favorable mortgage rates in Wyoming:

Compare Interest Rates and Fees

Shop around and compare interest rates and fees from multiple lenders. Don’t settle for the first offer you receive. Even a slight difference in the interest rate can result in substantial savings over the life of the loan.

Get Preapproved

Putting in the effort to go through the mortgage preapproval process shows sellers that you are serious about making a purchase. Even better, it gives you a very clear understanding of how much house you can likely afford and what kind of monthly payment you would be looking at. Plus it allows you to move quickly when you find the right property.

Consider a Shorter Loan Term

Shorter loan terms typically come with lower interest rates. If you can afford higher monthly payments, opting for a shorter loan term can save you money on interest in the long run.

Lock In Your Rate

If you’re concerned about rising interest rates, you can lock in your rate for a certain period, usually ranging from 30 to 90 days. This will protect you from potential rate increases during the lock-in period.

Wyoming Mortgage Resources

Wyoming offers various resources and programs to assist homebuyers, particularly first-time buyers and those with limited financial resources. These resources can provide valuable guidance and support throughout the homebuying process.

First-Time Homebuyer Programs

If you qualify as a first-time homebuyer, the Wyoming Community Development Authority (WCDA) has a mortgage with a low interest rate for those who meet income and home price restrictions. For this program, you are considered a first-time homebuyer if you have not owned a primary residence in the last three years.

Down Payment Assistance

Down payment assistance programs are available in Wyoming to help eligible homebuyers make the required down payment and buyers may combine the WCDA’s HomeStretch Down Payment Assistance loan with its first-time buyers’ mortgage. The HomeStretch assistance comes in the form of a 0% interest loan that needs to be repaid only when the home is sold, refinanced, or when the first mortgage is paid off in 30 years.

Tools & Calculators

A smart first step if you’re thinking of buying a home in Wyoming is to use online calculators to determine your home-buying budget and to begin to understand what your monthly mortgage payment would be based on the purchase price, down payment amount, and interest rate.

Refinancing Options in Wyoming

If you already own a home in Wyoming, you have the opportunity to refinance an existing mortgage through a bank or other lender if interest rates have dropped significantly or if your credit score or other financial metrics have improved noticeably since you made your purchase.

Borrowers with government-backed loans can also find government-backed refinancing programs, such the FHA Streamline Refinance and the VA’s Interest-Rate Reduction Refinance Loan.

Closing Costs, Taxes, and Fees in Wyoming

Closing costs, taxes, and fees are additional expenses associated with purchasing a home. In Wyoming, buyers can expect to pay between 3% and 6% of the home’s purchase price in closing costs. Factors such as property value and location can influence the total amount of closing costs.

It’s important to factor these costs into your home-buying budget to avoid any surprises during the closing process.

The Takeaway

Wyoming’s mortgage landscape is as rich and diverse as the state’s high plains and majestic mountains. By staying informed about current mortgage rates, exploring assistance programs, and running the numbers on refinancing options, individuals can make wise choices that keep them on the path of successful homeownership in the Equality State.

FAQ

What is a mortgage rate?

A mortgage rate represents the cost of borrowing money from a lender to finance a home purchase. It determines the amount of interest paid on the loan over time.

Will mortgage rates drop in Wyoming?

Predicting future mortgage rate movements is challenging. While rates can fluctuate, there’s no guarantee that they will decrease in the near future.

Will mortgage rates ever go back to normal?

There really isn’t a “normal” where mortgage rates are concerned because they vary over time. One generation’s “normal” is another generation’s “high” rate.

Will Wyoming home prices ever drop?

Wyoming home prices are influenced by various factors such as supply and demand, economic conditions, and market trends. Your best bet if you’re trying to gain insight into a housing market in Wyoming is to talk with a real estate agent who specializes in the area.

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

The decision of whether it’s a good time to buy a house in Wyoming depends on individual circumstances, financial readiness, and housing market conditions. Factors like affordability, interest rates, and personal needs should be carefully considered.

How do I lock in a mortgage rate?

Locking in a mortgage rate involves securing a specific interest rate for a certain period of time. This can be done by obtaining a rate lock from a lender, which guarantees the agreed-upon rate for a specified duration. There is usually a fee involved.

How do mortgage interest rates work?

Mortgage interest rates are determined by a mix of economic indicators and consumer creditworthiness, down payment amount, and type of mortgage chosen.

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-Q324-105

Compare mortgage rates in Ohio.

Introduction to Mortgage Interest Rates

Mortgage interest rates are set based on a complex combination of factors that fall into two categories: the state of the economy and the borrower’s financial status.

Economic factors include the Federal Reserve’s interest rates, inflation, and the unemployment rate. Consumer factors include credit score, down payment, income and assets, and the type of mortgage loan.

This guide provides a comprehensive overview of mortgage rates in Ohio, including factors that influence them, types of mortgages available, and tips for securing a competitive rate.

Where Mortgage Rates Come From

The Federal Reserve, also known as 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.

When the Fed’s interest rate is high, chances are mortgage rates will be too. And when the Fed lowers short-term interest rates, it becomes less expensive for banks to borrow money, which in turn leads to lower mortgage rates.

From there, many macro- and microeconomic influences nudge mortgage rates further up or down. The most important influence for homebuyers is their credit history and the type of mortgage they choose.

How Interest Rates Affect Home Affordability

Mortgage rates have a bigger impact on home affordability than people realize. Even small interest rate changes can put homeownership out of reach for middle-income Americans.

A seemingly small difference in mortgage rates can significantly impact home affordability. For instance, a 1% increase in interest rate on a $200,000 loan can result in an additional $45,000 in interest paid over the life of a 30-year loan.

Should Homebuyers Wait for Interest Rates to Drop?

First-time homebuyers often face the dilemma of whether to purchase a home or wait for mortgage rates to drop. There is no easy answer, as much depends on individual circumstances. However, experienced homebuyers tend to think that waiting doesn’t pay off. After all, while you’re waiting for those lower rates, home prices may rise beyond your budget, canceling out any savings.

Homeowners who are unhappy with their current interest rate can consider a mortgage refinance once rates drop. Refinancing involves obtaining a new mortgage with a lower interest rate, which can result in significant savings over the life of the loan.

Ohio Mortgage Rate Trends

The table below shows how Ohio mortgage rates follow national rates very closely. By examining historical mortgage rate trends, homebuyers can gain a better understanding of how rates have fluctuated over time and make informed decisions about when to purchase a home.

Historical U.S. Mortgage Rates

Over the last 50 years, mortgage rates have experienced highs and lows. While rates have risen in recent years, they remain below the historical highs of the early 1980s. Indeed, they are currently around the 50-year average.

Factors Affecting Mortgage Rates in Ohio

Many factors influence mortgage rates in Ohio and nationwide. Some of these factors are economic, but others are entirely within the homebuyer’s control.

Economic Factors

Economic factors that influence mortgage rates include the Fed’s interest rates, inflation, and unemployment rate.

•  The Fed: The Federal Reserve’s federal funds rate serves as a benchmark for other interest rates, including mortgage rates. When the Fed lowers the federal funds rate, it becomes less expensive for banks to borrow money, which leads to lower mortgage rates.

•  Inflation: Inflation can impact mortgage rates because it reduces the purchasing power of money. When inflation is high, lenders may increase interest rates to compensate for the decreased value of money.

•  Unemployment rate: A low unemployment rate can actually lead to higher mortgage rates because it indicates a strong economy with increased demand for housing. This increased demand can drive up home prices and put upward pressure on mortgage interest rates.

Recommended: Step-by-Step Guide to the Mortgage Preapproval Process

Consumer Factors

Here’s where you, the homebuyer, come into the equation. Consumer factors that affect mortgage rates include your credit score, down payment, income and assets, and the type of mortgage loan you choose.

•  Credit score: A higher credit score indicates a lower risk of default, making borrowers more attractive to lenders. As a result, individuals with higher credit scores (740 and above) typically qualify for lower mortgage interest rates.

•  Down payment: Increasing the down payment can reduce the mortgage interest rate. A larger down payment reduces the amount of money that needs to be borrowed, which lowers the risk for the lender. As a result, borrowers who make a larger down payment may be offered a lower mortgage interest rate. Although 20% is the ideal, most first-time homebuyers put down less.

•  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.

Types of Mortgages Available in Ohio

Various mortgage types — including fixed-rate, adjustable-rate, FHA, VA, and USDA loans — are available to meet the needs of different homebuyers.

Conventional loans are a popular choice among homebuyers and offer flexibility in terms of interest rates and loan amounts. They can be fixed-rate or adjustable-rate, and often require a credit score of 620 or higher.

Fixed-Rate Mortgage

Fixed-rate mortgages maintain the same interest rate throughout the life of the loan, ensuring that the principal and interest payments remain constant.

Fixed-rate mortgages provide stability and predictability by locking in the interest rate for the entire loan term. This means that the monthly payments will remain the same throughout the life of the loan, regardless of fluctuations in market interest rates.

Fixed-rate mortgages come with various loan terms, typically ranging from 10 to 30 years. Homebuyers can choose the loan term that best suits their financial situation and repayment preferences.

Adjustable-Rate Mortgage (ARM)

Adjustable-rate mortgages (ARMs) initially offer a lower rate than fixed-rate loans.

Adjustable-rate mortgages provide an initial period of lower interest rates, making them attractive to homebuyers looking for affordability in the short term. However, it’s important to note that the interest rate can adjust periodically after the initial period, potentially leading to higher monthly payments in the future.

The lower initial interest rate of ARMs can be advantageous for homebuyers who plan to sell their property before the end of the fixed-rate period. By taking advantage of the lower rate, they can save money on monthly payments during the initial period.

FHA Loan

Backed by the Federal Housing Administration, FHA loans typically have more lenient eligibility requirements than conventional loans.

FHA loans are designed to make homeownership more accessible to borrowers who may not meet the stricter criteria of conventional loans. They offer more flexible credit and income requirements, making them a good option for first-time homebuyers or those with less-than-perfect credit. However, FHA loans require an upfront mortgage insurance premium (MIP) of 1.75% of the base loan amount, as well as monthly MIP for new homebuyers of 0.15% to .75% — most often 0.55%.

VA Loans

VA loans are available to veterans, active-duty military members, and some Reserve and National Guard members, and surviving spouses.

A significant advantage of VA loans is that they do not require a down payment. This can be a major hurdle for many homebuyers, and VA loans eliminate this obstacle, making it easier for eligible individuals to purchase a home. Borrowers obtain these loans from private lenders after first obtaining a certificate of eligibility from the VA.

USDA Loans

USDA loans are designed for low-income borrowers looking to purchase a home in a rural area.

USDA loans offer favorable terms, including no down payment requirement and competitive interest rates. USDA loans are backed by the U.S. Department of Agriculture, which provides support and guarantees to lenders offering these loans. This backing allows lenders to offer more favorable terms to eligible borrowers.

Jumbo Loans

Conventional mortgage loans have a cap of $832,750 for a single-family home in Ohio. Anything over that requires a jumbo loan. Because jumbo loan interest rates fluctuate independently of conforming loan rates, they can run a little higher or lower at any given time.

Jumbo loans usually have stricter requirements because they carry a higher risk for the lender. Lenders may require a minimum score of 700 to 740 for a primary home, or up to 760 for other property types.

Popular Places to Get a Mortgage in Ohio

Securing a mortgage often depends on choosing the right location, where home prices and the cost of living are affordable.

The cost of living in Ohio is about 13% lower than the average cost of living in the U.S. This affordability can make it a bit easier for homebuyers to purchase a home and obtain a mortgage.

Least Expensive Locations

According to SoFi’s guides to the Best Affordable Places in the U.S., some of the least expensive locations in Ohio for housing include:

•  Youngstown: average home value $60,897 (not a typo!)

•  Van Wert: $170,000

•  Springfield: $176,000

•  Lima: $139,000

•  Marietta: $189,000

Most Expensive Locations

Some of the most expensive locations in Ohio for housing include:

•  Upper Arlington: $591,000

•  Galena: $606,000

•  Terrace Park: $697,000

•  Hunting Valley: $1,548,000

•  Indian Hill: $1,514,000

Recommended: What Are the Average Monthly Expenses for One Person?

Tips for Securing a Competitive Mortgage Rate in Ohio

A competitive mortgage rate can save homebuyers a lot of money over the life of a loan. Even half a percentage point can translate to many thousands of dollars. Here are some ways to ensure you get the best available rate.

Compare Interest Rates and Fees

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

Shopping around and comparing interest rates from different lenders is essential for finding the best mortgage deal. Lenders may offer varying rates and terms, so it’s important to compare multiple options before making a decision.

In addition to interest rates, homebuyers should also consider any upfront costs or closing fees associated with the mortgage loan. These fees can vary between lenders and can add to the overall cost of the loan.

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 are concerned about rising interest rates, you can opt to lock in your rate for a certain period, typically ranging from 30 to 90 days. This can provide peace of mind and protect you from potential rate increases during the house-hunting process.

Ohio Mortgage Resources

The Ohio Housing Finance Agency (OHFA) offers a variety of resources and programs to assist homebuyers, particularly first-time buyers and those with limited financial resources.

First-Time Homebuyer Programs

Ohio offers several programs specifically tailored to assist first-time homebuyers in achieving their dream of homeownership. These programs may provide financial assistance, education, and counseling to help first-time buyers navigate the process.

•  The Ohio Heroes program offers a discounted mortgage rate to first-time buyers who work in the public interest (military, police, firefighters, EMTs, medical professionals, and teachers).

•  Grants for Grads is a program for first-time buyers who have obtained a degree (associate, bachelor’s, master’s, or doctorate) in the last 4 years can get a discounted mortgage rate.

Wondering if you qualify as a first-time homebuyer? In most places, anyone who hasn’t owned a primary residence within the last three years is eligible. Veterans and single parents who previously owned a home with a spouse may also qualify.

Down Payment Assistance

For individuals who may not have the full amount for a down payment, Ohio offers various down payment assistance programs. These programs can provide grants, loans, or other forms of financial assistance to help homebuyers cover the upfront costs of purchasing a home.

•   The Your Choice program allows first-time homebuyers to borrow 2.5% to 5% of their home’s purchase price in the form of a forgivable loan to put toward down payment or closing costs.

•   The Ohio Heroes program noted above, also offers 2.5% to 5% down payment assistance loans to first-time buyers who work in the public sector.

Tools & Calculators

Ohio provides online tools and calculators to help homebuyers estimate their monthly mortgage payments, determine affordability, and compare different loan options. These tools can assist homebuyers in making informed financial decisions throughout the homebuying process.

Refinancing Options in Ohio

Refinancing a mortgage can be a strategic move for homeowners looking to lower their interest rate, reduce monthly payments, or access cash for other financial needs.

•   The FHA Streamline Refinance allows FHA-insured homeowners to refinance into current mortgage rates with minimal hassle.

•  VA loan holders may benefit from the Interest-Rate Reduction Refinance Loan (IRRRL) which allows them to refinance their existing VA loan into a new loan with a lower interest rate.

Closing Costs, Taxes, and Fees in Ohio

Buyers in Ohio can expect to pay between 2% and 5% of the home’s purchase price in closing costs. These costs cover various expenses such as title insurance, appraisal fees, loan origination fees, and other administrative charges.

The specific closing costs in Ohio can vary depending on the value of the property and its location. Higher-priced homes and properties in certain areas may incur higher closing costs.

The Takeaway

Ohio offers a range of housing and mortgage options for homebuyers, who often enjoy a lower cost of living compared to the national average. 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 Buckeye State.

FAQ

Will mortgage rates drop in Ohio?

Predicting future mortgage rate trends is challenging, since they are influenced by many economic factors. However, staying updated on market conditions and consulting with mortgage professionals can help homebuyers make informed decisions about when to purchase a home.

Will mortgage rates ever go back to normal?

“Normal” is not a term that applies to mortgage rates. Mortgage rates have fluctuated throughout history and are influenced by a combination of economic factors. While rates may change, they eventually stabilize within a range that is considered normal for the current economic climate. That’s as true now as ever.

Will Ohio home prices ever drop?

Real estate markets are subject to various influences that can impact home prices. While prices may experience fluctuations, long-term trends in Ohio’s housing market suggest a steady increase in home values. However, it’s important to note that real estate markets are cyclical and can be influenced by local economic conditions.

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

Determining the right time to buy a house involves considering personal financial circumstances, market conditions, and long-term goals. While there may be fluctuations in mortgage rates and home prices, purchasing a home is a significant decision that should be based on individual needs and financial readiness.

How to lock in a mortgage rate?

To lock in a mortgage rate, you can work with a lender to secure a specific interest rate for a certain period, typically ranging from 30 to 90 days. This can protect you from potential rate increases during the house-hunting process.

How do mortgage interest rates work?

Mortgage interest rates are determined by a combination of economic factors, including the Fed’s interest rates, inflation, unemployment, and consumer factors such as credit score, down payment, income, and type of mortgage loan. Lenders use these factors to assess the risk associated with lending money and set interest rates accordingly.

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-Q324-090

Compare mortgage rates in Missouri.

Introduction to Mortgage Interest Rates

Securing a mortgage is a key step in the homebuying process, and understanding mortgage rates is essential for making informed financial decisions.

Mortgage rates in Missouri, like anywhere else, are influenced by various economic factors and the borrower’s financial status. This article aims to provide a comprehensive overview of mortgage rates in Missouri, including factors that affect them, types of mortgages available, and tips for securing a competitive mortgage rate.

Where Mortgage Rates Come From

The Federal Reserve, also known as the Fed, plays a pivotal role in setting the short-term interest rates that banks use. Although home loan rates are not directly tied to Fed rates, they tend to follow similar economic trends.

When the Fed’s interest rate is high, chances are mortgage rates will be too. Therefore, it’s important for homebuyers to stay informed about the Fed’s monetary policy decisions, as they can significantly impact mortgage rates.

Economic indicators such as inflation and unemployment rate also influence mortgage rates. Higher inflation can lead to increased borrowing costs for lenders, which may result in higher mortgage rates. A low unemployment rate, on the other hand, can indicate a strong economy and increased demand for housing, potentially pushing mortgage rates upward.

How Interest Rates Affect Home Affordability

Mortgage rates have a more significant impact on home affordability than many people realize. Even small changes in interest rates can make a substantial difference in monthly mortgage payments and the overall cost of buying a home.

For instance, a one percentage point increase in interest rate on a $300,000 mortgage can add thousands of dollars to annual mortgage costs, making homeownership less affordable for middle-income Americans.

Should Homebuyers Wait for Interest Rates to Drop?

Many first-time homebuyers wonder if they should buy now or wait for interest rates to come down. While mortgage rates fluctuate, there’s no guarantee that they will drop in the future. Instead, homebuyers should consider their individual financial situation, housing market conditions, and long-term plans when making a decision about buying a home.

An important side note: Homeowners can always refinance their mortgage after rates come down, potentially lowering their monthly payments. That’s another reason that waiting on an uncertain drop in interest rates may not be the best strategy for everyone.

Missouri Mortgage Rate Trends

Understanding historical mortgage rates can provide valuable insights into where rates are headed. In Missouri, mortgage rates have shown fluctuations over the years, but they remain below historical highs. (The FHFA stopped reporting state interest rates in 2018.)

Historical U.S. Mortgage Rates

Over the last 50 years, mortgage rates have experienced periods of highs and lows. The highest average annual mortgage rate was recorded in 1981 at 18.63%, while the lowest was observed in 2021 at 2.65%. Understanding the extremes may help homebuyers put today’s moderate rates in better perspective.

Factors Affecting Mortgage Rates in Missouri

Numerous factors influence mortgage rates in Missouri and nationwide. Some of these factors are economic, while others are entirely within the homebuyer’s control. Understanding these factors can help homebuyers make informed decisions about their mortgage options.

Let’s explore some of the key factors that affect mortgage rates in Missouri:

Economic Factors

Economic factors play a significant role in determining mortgage rates. Here are a few key economic factors that influence mortgage rates in Missouri:

•  The Fed: The Federal Reserve sets the federal funds rate, which 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, which can lead to higher mortgage rates. The opposite is also true.

•  Inflation: Inflation is another economic factor that affects mortgage rates. When inflation rises, the purchasing power of money decreases, making it more expensive for lenders to lend money. As a result, lenders may increase interest rates to compensate for the loss in purchasing power.

•  Unemployment rate: The unemployment rate also plays a role in 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, consequently, mortgage interest rates.

Recommended: What Are Average Monthly Expenses for One Person?

Consumer Factors

In addition to economic factors, several consumer-specific factors also influence mortgage rates. These factors include:

•  Credit score: Credit score is a major factor that lenders consider when determining mortgage rates. A higher credit score indicates a lower risk of default, making borrowers more attractive to lenders. As a result, individuals with higher credit scores — 740 and above — typically receive lower mortgage interest rates.

•  Down payment: The amount of down payment can also impact mortgage rates. A larger down payment reduces the loan amount, which lowers the risk for lenders. Consequently, borrowers who make a larger down payment may qualify for a lower mortgage interest rate. Currently, the median down payment for a house is 15%, according to data from the National Association of Realtors®.

•  Income and assets: Lenders also consider the borrower’s income and assets when determining mortgage rates. A steady income and sufficient assets indicate financial stability, making borrowers more attractive to lenders. As a result, borrowers with a stable income and substantial assets may qualify for lower mortgage interest rates. Generally speaking, the income needed to afford a $450,000 mortgage is about $130,000.

•  Type of mortgage loan: The type of mortgage loan can also affect the interest rate. Certain types of mortgages, such as adjustable-rate mortgages (ARMs) and government-backed loans like VA mortgages, may offer lower interest rates compared to conventional fixed-rate mortgages. Additionally, shorter loan terms typically come with lower interest rates than longer loan terms.

Types of Mortgages Available in Missouri

Homebuyers in Missouri have access to the full range of mortgage types, each with its own characteristics and benefits. Conventional loans are not backed by the government and are offered by banks and credit unions. They can be fixed-rate or adjustable-rate, and typically require a credit score of 620 or higher..

Here are some of the most common mortgage options available in the state:

Fixed-Rate Mortgage

Fixed-rate mortgage: A fixed-rate mortgage offers a constant interest rate throughout the life of the loan, providing stability and predictability in monthly payments. Fixed-rate mortgages are available in terms of 10, 15, 20, or 30 years.

This type of mortgage is ideal for borrowers who prefer the security of a consistent monthly payment and want to lock in a favorable interest rate for the long term.

Adjustable-Rate Mortgage (ARM)

Adjustable-rate mortgage (ARM): An ARM initially offers a lower interest rate compared to fixed-rate loans. However, the interest rate can adjust periodically after a fixed introductory period, based on a specified index. ARMs can be beneficial for borrowers who plan to sell their home before the introductory period ends or who are comfortable with the potential for fluctuating monthly payments.

It’s important for borrowers to carefully consider the potential risks and benefits of ARMs before choosing this type of mortgage.

FHA Loan

FHA loans are insured by the Federal Housing Administration and are designed to make homeownership more accessible to borrowers with limited down payments and less-than-perfect credit. FHA loans typically have more lenient credit and income requirements compared to conventional loans, but they may come with additional fees and mortgage insurance.

FHA loans can be a good option for first-time homebuyers or those with lower credit scores who may not qualify for conventional loans. Borrowers should carefully review the eligibility requirements and associated costs of FHA loans to determine if they are the right fit for their financial situation.

VA Loans

VA loans are available to veterans, active-duty military members, and some Reserve and National Guard members. VA loans offer competitive interest rates and do not require a down payment, making them an attractive option for eligible borrowers. However, VA loans have specific eligibility requirements, including a minimum length of military service and a valid Certificate of Eligibility (COE).

USDA Loans

USDA loans are designed for low-income borrowers looking to purchase a home in a rural area. USDA loans offer competitive interest rates and do not require a down payment. However, USDA loans have specific eligibility requirements, including income limits and property location restrictions.

Jumbo Loan

Jumbo loans are conventional loans that exceed the conforming loan limits set by the Federal Housing Finance Agency (FHFA). In Missouri, the conforming loan limit for a single-family home is $832,750. Jumbo loans are typically used to finance more expensive properties and may have different interest rates and requirements compared to conventional loans.

Popular Places to Get a Mortgage in Missouri

Securing a mortgage often depends on choosing the right location, where home prices and the cost of living are affordable. In Missouri, several cities and towns offer attractive options for homebuyers.

Here are a few popular places to get a mortgage in Missouri:

The largest city in Missouri is relatively affordable compared to other major cities in the U.S. The cost of living is 12% lower than the average cost of living in the U.S.

•  Kansas City: Another major city in Missouri, St. Louis is known for its affordable housing and diverse neighborhoods. The cost of living is 16% lower than the national average.

•  St. Louis: Columbia is a college town located in central Missouri and is home to the University of Missouri. The city offers a vibrant community and a growing economy, attracting homebuyers and investors alike. The cost of living is 10% lower than the national average.

•  Columbia: Springfield is a city located in southwestern Missouri and is known for its affordability and outdoor recreation opportunities. The cost of living is 16% lower than the national average.

These are just a few examples of popular places to get a mortgage in Missouri. Homebuyers should carefully research different locations and consider factors such as cost of living and job opportunities when making a decision.

Least Expensive Locations

For homebuyers looking for more affordable housing options, several cities and towns in Missouri offer lower cost of living and attractive mortgage rates.

Some of the least expensive locations in Missouri include:

•  Kirksville: Kirksville is a small city located in northeastern Missouri and is known for its low cost of living: 25% lower than the national average. The city offers affordable housing options, with an average home value of $145,000.

•  Sikeston: Sikeston is a city located in southeastern Missouri and is known for its agricultural economy and affordable housing. The cost of living is more than 25% lower than the national average, and the average home value is $144,000.

•  Rolla: Rolla is a city located in central Missouri and is home to the Missouri University of Science and Technology. The cost of living is more than 20% lower than the national average. The city offers a mix of affordable housing options, with an average home value of $217,000.

If you’re buying your first home, these are just a few examples of places where starter houses are plentiful and quite affordable. Homebuyers should carefully research different areas, compare mortgage rates, and consider factors such as housing availability and job opportunities when making a decision.

Recommended: Best Affordable Places to Live in the U.S.

Most Expensive Locations

For homebuyers seeking more luxurious properties and higher-priced neighborhoods, several cities and towns in Missouri offer exclusive housing options.

Some of the most expensive locations in Missouri include:

•  Clayton: Clayton is a city located in St. Louis County and is known for its upscale neighborhoods and high-end housing options. The city offers a variety of luxury properties, making it an attractive destination for affluent homebuyers. The average home value is $809,000.

•  Lake of the Ozarks: Lake of the Ozarks is a popular vacation destination located in central Missouri and is known for its beautiful scenery and luxury lakefront properties. The average home value is a modest $349,800.

•  Branson: Branson is a city located in southwestern Missouri and is known for its entertainment industry and tourism. The city offers a variety of housing options, including luxury properties and vacation homes, making it an attractive destination for homebuyers seeking a vibrant lifestyle. Still, the average home value is just $262,000.

Tips for Securing a Competitive Mortgage Rate in Missouri

Obtaining a competitive mortgage rate can save borrowers thousands of dollars over the life of a loan. Here are some tips for securing a competitive mortgage rate in Missouri:

By following these tips, homebuyers can increase their chances of securing a favorable mortgage rate and achieving their homeownership goals.

Even a small difference in interest rate can have a significant impact on monthly payments and the total cost of borrowing.

Compare Interest Rates and Fees

It’s essential to compare interest rates and fees from multiple lenders before choosing a mortgage. Different lenders may offer varying rates and terms, so shopping around can help borrowers find the best deal.

Borrowers should also inquire about any upfront costs or closing fees associated with the loan to get a clear picture of the total borrowing costs.

By carefully comparing rates and fees, borrowers can make informed decisions and choose the most suitable mortgage option for their financial situation.

Get Preapproved

Getting approved for a mortgage strengthens a homebuyer’s position and allows them to move quickly when they find the right property. Preapproval involves submitting financial information to a lender, who will assess the borrower’s creditworthiness and determine the maximum loan amount they can qualify for. The mortgage preapproval process can take up to 10 days.

Missouri Mortgage Resources

Missouri offers various resources and programs to assist homebuyers, particularly first-time buyers and those with limited financial resources. These resources can provide valuable information, financial assistance, and support throughout the homebuying process.

Here are some key Missouri mortgage resources:

First-Time Homebuyer Programs

Missouri offers several programs designed to help first-time homebuyers overcome financial barriers and achieve homeownership. These programs may provide down payment assistance, low-interest loans, and other forms of support.

Some notable first-time homebuyer programs in Missouri include:

•   Missouri Housing Development Commision (MHDC) First Place program provides a pool of money at below-market interest rates that lenders can use to provide 30-year, fixed-rate FHA, VA, and USDA loans to first-time homebuyers and qualified veterans.

•   The MHDC Next Step program allows higher income and purchase price limits for first-time and repeat buyers. A 30-year fixed-rate mortgage can be used along with the mortgage credit certificate, and annual dollar-for-dollar tax credit.

Recommended: How to Qualify as a First-Time Homebuyer

Down Payment Assistance

Down payment assistance programs can help homebuyers overcome the challenge of saving for a down payment, which is often a significant barrier to homeownership. These programs provide financial assistance in the form of grants, loans, or other incentives to help borrowers make a down payment.

Some notable down payment assistance programs in Missouri include:

•   The First Place program, noted above, also offers cash and non-cash assistance loans. The cash assistance loan is a second mortgage of 4% of the first mortgage amount that can be used for closing costs and a down payment, and is forgivable after 10 years. The non-cash assistance loan, also forgivable after 10 years, has a lower interest rate and is best for buyers who can pay their own down payment and closing costs.

•   Next Step, mentioned above, also gives borrowers the opportunity to receive cash assistance for a down payment and closing costs in the form of a 10-year forgivable loan.

Tools & Calculators

Various online tools and calculators can help homebuyers estimate their monthly mortgage payments, compare interest rates, and calculate affordability. These tools can provide valuable insights and help borrowers make informed decisions throughout the homebuying process.

Some useful tools and calculators available include:

Refinancing Options in Missouri

Refinancing a mortgage can be a strategic move for homeowners looking to lower their interest rate, reduce monthly payments, or access cash for other financial needs. Missouri offers several mortgage refinance options to help homeowners achieve their financial goals.

•  FHA Streamline Refinance: This refinancing option is available to homeowners with FHA-insured loans. It allows borrowers to refinance into current mortgage rates with minimal hassle and without the need for a new credit check or appraisal.

•  Interest-Rate Reduction Refinance Loans (IRRRL): This refinancing option is available to veterans and active-duty military members with VA loans. It allows borrowers to reduce their monthly payments by adjusting the annual percentage rate (APR) without the need for a new credit check or appraisal.

In addition to these options, conventional refinance loans are also available. Conventional refinance loans are not backed by the government and offer competitive interest rates. However, they may have stricter credit and income requirements compared to FHA and VA refinance loans.

Homeowners considering refinancing should carefully evaluate their financial situation, compare interest rates and fees, and consult with a mortgage lender to determine the best refinancing option for their needs.

Closing Costs, Taxes, and Fees in Missouri

When you buy a home, you will need to pay closing costs, taxes, and fees. These costs can vary depending on the purchase price of the home, the type of loan you get, and the location of the property. Some of the most common closing costs include the loan origination fee, the appraisal fee, the title insurance premium, and the recording fee.

The Takeaway

Getting a mortgage is a big financial decision, so it is important to do your research and compare your options before you make a decision. By following the tips in this article, you can increase your chances of getting the best possible mortgage rate in Missouri.

FAQ

What is a mortgage rate?

A mortgage rate is the interest rate that you pay on your mortgage loan. It is expressed as a percentage of the loan amount.

Will mortgage rates drop in Missouri?

It is difficult to predict whether mortgage rates will drop in Missouri. However, there are a few factors that could affect mortgage rates, such as the overall economy, inflation, and the Federal Reserve’s monetary policy.

Will mortgage rates ever go back to normal?

“Normal” isn’t a term that applies to mortgage rates. It’s important to remember that mortgage rates are cyclical and they will eventually go down again.

Will Missouri home prices ever drop?

It is difficult to predict whether Missouri home prices will drop. However, there are a few factors that could affect home prices, such as the overall economy, supply and demand, and the job market.

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

Whether or not it is a good time to buy a house in Missouri depends on your individual circumstances. If you are financially stable and you are planning to stay in the area for a long time, it may be a good time to buy a house.

How to lock in a mortgage rate?

You can lock in a mortgage rate by getting a mortgage rate lock from a lender. A mortgage rate lock guarantees that you will get a specific interest rate for a certain period of time.

How do mortgage interest rates work?

Mortgage interest rates are determined by a number of factors, including the overall economy, inflation, and the Federal Reserve’s monetary policy. When the economy is strong and inflation is low, mortgage rates tend to be lower. Conversely, when the economy is weak and inflation is high, mortgage rates tend to be higher.

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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.

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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.

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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.

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