11 Tips for Buying a Home in Oklahoma City

First-time homebuyers often don’t know where to begin in the process. From how much they will need to save, to understanding mortgages, to the actual house hunting itself, many of the numerous steps will be new to the first-time homebuyer. If you are a first-time homebuyer or are moving to Oklahoma City, F&M Bank is here to facilitate the homebuying process and help you find your perfect first home.

Follow these 11 tips to get started on your homebuying journey!

1. Start Saving, and Early

Knowing how much you need to save will help you create a manageable budget for homebuying costs. Plan on paying between 3% and 20% of the home’s cost as a downpayment. 20% is ideal. Many lenders require mortgage insurance if you put lower downpayment, which adds to your overall costs long-term. There are other costs to consider as well—moving costs, closing costs, and the expense of furnishing your new home.

2. Know what options you have.

There are many ways to finance your new home. F&M Bank offers a variety of paths to home ownership based on your goals and financial status such as conventional mortgages, FHA home loans, and Jumbo home loans. Research these different options to get a sense of which might be right for you. If you’re a first-time homebuyer in Oklahoma City, down payment assistance is available through Open Door, a program for new homebuyers from F&M Bank.

3. Understand the Current Market

The market will directly affect the amount of money you spend on a home. However, tracking the fluctuating interest rates and home prices will give you a sense of when to begin house hunting. If homeownership is not an immediate but a future goal, you should anticipate that the median prices for homes will increase, and budget with that in mind. Currently, the median sale price in Oklahoma is $252,900, but that will likely go up. Familiarize your self with the Oklahoma real estate market to make a wise investment in your first home.

4. Choose The Right Location

Whether you are looking to live in a bustling urban area, or have more space in the suburbs or country, there are different factors to consider. Begin by investigating cities and neighborhoods that fall in your price range.

Want to live in an area with good schools? You’ll want to research different district ratings.

Looking to build equity through your home? See which areas have rising housing prices.

A good real estate agent can help determine where in Oklahoma City bests fits your homebuying needs.

5. Work on your Credit Score

Your credit score indicates to lenders your level of financial responsibility and will affect your pre-approval odds as well as your interest rate. If your credit score is less than desirable, there are ways to improve it. Paying down your credit card debt, asking for credit limit increases, opening up new lines of credit, and monitoring for credit report errors can help improve your overall credit health. Keeping your credit utilization under 30% is key—it tells lenders that you use your credit wisely and are less of a risk.

6. Decide When and How You’ll Be Ready to Buy

Once you determine how much home you can afford as well as which type of home financing is right for you, you’ll have a sense of when you’ll be ready to begin house hunting. Knowing this early allows you to create a budget and timeline to keep you on the right path to home ownership. F&M Bank offers different financial calculators to assist you in anticipating when you’ll be ready to purchase your first home.

7. Start Pre-Qualification Process Ahead of Time

There are many steps to securing a mortgage, so it’s best to begin early. Getting pre-qualified allows lenders to review your finances (income, debts, available credit, etc.) in order to give you an estimate of how much money you’ll be able to borrow from them.

Why is getting pre-qualified important? For one, it gives you a better estimate of how much you’ll be able to spend on a house, which can then influence your budgeting, mortgage choice, and location. It can also help you determine if you need to make some financial changes to improve your credit score or lower your debt to credit ratio prior to securing a mortgage.

8. Find the Right Real Estate Agent

A good real estate agent does much more than just show you houses. They understand the current market and housing landscape in Oklahoma City, they can find houses in your price range in your desired locations, and they can help navigate the complicated homebuying process.

Experienced real estate agents will help to negotiate deals and make offers, and they can help with closing, inspections, and other financial or logistic details that accompany the homebuying process. Because of this, it’s important to be patient and look for an agent that fits your needs.

When interviewing real estate agents, you’ll want to find someone with experience, knowledge of your target towns or neighborhoods, and someone who has positive online reviews. You’ll also want to see how many homebuyers they’ve helped in the past year and in what areas. It’s important to find an agent who has been successful working with homebuyers similar to you. Browse local online lists or recommendations for Oklahoma’s top agents.

9. Decide When to Start House Hunting

Different times of year offer different benefits to homebuyers, but it is generally agreed upon that late summer through winter is the best time to buy a home. There is more competition in the spring, which leads to lower inventory and higher prices and competition. In August, demand begins to drop, but this can often be a tricky month to move, especially for parents with children who might need to enroll in a new school district at the last minute. According to Forbes, October through January are the best months to purchase a home. While inventory is generally lower than in the spring, there are far fewer buyers, which leads to lower prices and less competition.

However, if you are a first-time homebuyer and are now renting, you may be looking to purchase when your current lease ends. If it ends in the spring or summer, consider talking to your landlord about a month-to-month or short-term lease, so you can begin your house hunting when you want.

10. Stick To Your Budget

Knowing your budget and staying within it will save you time on your housing journey. You won’t have to waste time researching and seeing houses you can’t afford, nor will you find yourself without your 20% down payment. Homebuying is all about planning. Making the plan is only one part. Sticking to your plan is the most important.

11. Get Pre-Approved Before House Hunting

A pre-approval is a conditional offer from a lender. It is more formal than pre-qualification, but it also involves a hard credit check and proof of finances which pre-qualification does not require. Having good credit, being employed, and having a responsible payment history are necessary for pre-approval. In Oklahoma City, sellers often require that potential buyers be pre-approved before they’ll even show you the home. Being pre-approved means that lenders have vetted your finances and gives you an advantage over other buyers.

These tips will help first-time home buyers, but our lenders are here to help and hold your hand through the process. Contact F&M Bank Oklahoma to speak to a lender and learn how to qualify for your first home!