A Guide for First-Time Home Buyers in Ashland, Oregon

So, you want to buy your first home in Ashland, Oregon. We don’t blame you. After all, Ashland is a wonderful community where a great quality of life awaits.

Located at the base of the Siskiyou and Cascade mountain ranges, Ashland offers breathtaking views the moment you step out the door. Here, you have an endless choice of outdoor fun. There’s hiking, biking, fishing, and great boating all year round. During the winter, you can ski, snowshoe, and do other cold weather activities on Mount Ashland.

The city is also well-known for being Southern Oregon’s cultural capital. Aside from acclaimed galleries, theaters and restaurants, it is home to the Oregon Shakespeare Festival, a world-famous tradition since 1935. And if you like wine—well, wine not? Nestled in Rogue Valley, Ashland houses some of the area’s best vineyards and wineries, which you can visit any day of the week.

Furthermore, Niche.com has ranked Ashland 13th among suburbs with the best public schools in Oregon. Also found in the city is Southern Oregon University, known for its quality education on liberal arts, and considered one of the state’s top colleges. No wonder Ashland is included in Niche’s 10 best suburbs to live in Oregon.

With everything the city has to offer, the real estate market here has always been robust and competitive. It’s not unusual for homes for sale in Ashland to receive multiple bids and be snapped up in just 23 days – some even as quickly as 7 days.

If you’re buying a home for the first time, it pays to be well-prepared especially in a dynamic market like Ashland. Go through this guide to help you get started.

Guide for first-time home buyers in Ashland, Oregon
What you should know about the home buying process
Homes for sale in Ashland
Why work with Ashland Homes Real Estate

Guide for first-time home buyers in Ashland, Oregon

With your first home purchase, you may be making the transition from tenant to homeowner. Buying a home may fulfill the American dream, but it is also a huge responsibility. Before you take next step, it’s best to be aware of the pros and cons of buying a home.

Homeownership benefits

You have the opportunity to build equity and gain a valuable asset as you pay down your mortgage.
You don’t need to worry about increasing rent prices or being evicted at any time.
You get a sense of pride and accomplishment from owning a tangible, high value asset.

Homeownership risks

You are solely responsible for the home’s maintenance and repairs, which can impact your finances
You have less flexibility in moving around and must be ready to live in your purchased home for several years to get a good return on your investment.
In addition to mortgage payments, you must also be prepared to pay property taxes, insurance costs, and other financial requirements of homeownership.

You can use a free rent-versus-buy calculator to give you a general idea of the comparative costs and benefits of buying vs. renting a home.

How do you know you’re ready to buy a house?

Whether you’re ready to become a homeowner depends solely on your own circumstances. Ask yourself these questions and let your answers guide you in making that big decision.

Am I financially ready?
Before browsing through listings of homes for sale in Ashland, it’s best to first check your finances. Remember that you’re buying a house on top of your current living costs. It’s not enough that you have money for the down payment; you should also be able to afford the mortgage, interest, insurance, taxes and other costs. In fact, experts recommend that before purchasing a home, you have to be free from major debts or have down a large chunk of them. It’s also ideal to have ready cash for three to six months’ worth of expenses.
What is my credit score?
A good credit score is important in acquiring a mortgage and securing favorable lending terms. In general, lenders require a minimum credit score of 620 for a home loan. While you may still qualify for a mortgage with a lower credit score, you might have to settle for a higher interest rate and shorter repayment period.

To improve your credit score, get a copy of your credit report from any of the reporting bureaus and identify the factors that may be pulling your creditworthiness down. Then come up with strategies to improve these factors. Monitor your spending habits, and make sure to have a secure job and income.
Do I have a healthy debt-to-income (DTI) ratio?
Aside from your credit score, lenders also look into your DTI ratio. Simply put, the DTI ratio measures how well your income can accommodate a debt. This lets lenders know how risky of a borrower you are. Typically, 43% is the maximum DTI ratio that qualifies you for a mortgage. However, some lenders have a DTI ceiling of 36%. It’s wise to be prudent. Work on your finances at least one year before planning to buy a house.
Which lender should I choose?
Not all loan companies are created equal, so don’t just take the first offer that comes along. Scout around for the lowest interest rates to cushion the long-term impact of your loan. Use an online mortgage calculator to help you choose the right financing option for you. Apart from interest rates, also decide on the loan terms that work for you. Are your savings compatible with a fixed or adjustable rate? Should you go for a loan term of 15 years? 30 years? Remember that you will also pay lender fees on top of the mortgage interest.
How much loan should I take out?
When making a loan, it’s best to make a conservative estimate. This means borrowing the smallest amount of money possible. A lot of people get so giddy with the thought of owning their first home that they overlook the expenses beyond the monthly mortgage payment. Apart from basic living costs, you need to look into the range of property taxes in your future neighborhood. Set aside money for inevitable repairs and maintenance. The Federal Housing Administration (FHA) recommends that you use a maximum of 31% of your monthly income for housing expenses.
Which home is best for me?
Location is always a top concern when choosing a place of residence. Other factors include the area’s economic health, safety, and proximity to amenities, basic services and schools. After considering these aspects, it’s time to decide on which type of home suits your lifestyle. Because each residential property type has its own benefits and downside, scan our property listings so you can get a feel of what is right for you.
Is the current real estate market favorable for buyers?
Are there more people selling than buying homes in your preferred neighborhood? If so, now is a good time to purchase your dream home. In this situation, you can negotiate prices, especially if the seller is in a hurry to unload the property. But if there is more demand than supply of homes, be prepared to compete with other buyers. This may even equate to paying more than the listing price to close the deal.

What you should know about the home buying process

After you have made a thorough review of your finances and have determined that you are now financially ready to be a homeowner, it’s time to make your dream of owning a home a reality.

While this is an exciting moment for anyone, it’s important to remain grounded and keep your eyes open for opportunities and potential pitfalls. As you go through your options of gorgeous homes for sale in Ashland, keep the following pointers in mind:

Look into your financing options.
- Decide on the down payment size
  Down payment is what you pay upfront to the seller, while your monthly mortgage covers the rest of the house’s cost. A full down payment is usually 20% of the price. However, you can also opt to pay less than 20%, and compensate for the remainder though private mortgage insurance (PMI)— paid monthly with interest. The PMI is for the lender’s protection. In case you are unable to pay for the mortgage, the lender can convert your PMI to cash.
- Know the benefits of being a first-time home buyer
  By getting a Federal Housing Administration (FHA) loan, first-time home buyers can have access to the following:
  - Smaller down payment (3.5% or 10% depending on your credit score). For down payments below 20% however, you will likely need to pay mortgage insurance until you have achieved 20% equity.
  - Loan approval despite a low credit score
  - Lower mortgage rates and closing costs
- Learn about other loan types
  Aside from the FHA loan, there are many other types of loans to consider. These include:
  - Conventional home loans
    Also called conforming home loans, these meet guidelines set by Fannie Mae and Freddie Mac.
  - Department of Veteran Affairs (VA) home loan
    Open to veterans, military members and those associated with them, this home loan allows you to make zero down payment on a home and enjoy the lowest possible mortgage rates.
  - The U.S. Department of Agriculture (USDA) home loan
    Like the VA loan, this allows you to make zero down payment but is available only for homes in a rural area with less than 20,000 residents.
- Look into these housing programs in Oregon:
  - First-Time Homebuyers Savings Accounts (FHSA)
    If you’re buying your first home in Ashland, you can take advantage of the state’s FHSA program. Your savings in this account can grow without taxes. It also gives you a state tax deduction for your contribution. You can keep your FHSA for 10 years without a deposit limit before purchasing a home. Take note that you can open your account only until December 31, 2026.
  - Oregon Bond Residential Loan Program
    Also for first-time home buyers in Oregon, this program offers affordable fixed interest rates payable in 30 years. With down payment as low as zero percent, this program also links you to experienced local lenders.
  - Southern Oregon Housing Resource Center (SOHRC)
    Located in Medford, the SOHRC provides housing programs in Jackson County where Ashland is located. Its state-certified “ABCs of Homebuying” teaches buyers what to expect before purchasing a home. SOHRC also offers assistance programs for down payment and closing costs.
Get preapproved for a mortgage
Before house hunting, you must first secure mortgage approval from a lender. Why? Because this shows you’re a determined buyer. In fact, most sellers require a preapproved mortgage before accepting an offer.

Moreover, pre-approval gives you a good idea of how much loan you may secure from a lender, so you can use this amount in setting your budget. Before giving you a preapproval letter, a lender confirms your financial data (bank statements, income proof, etc.) and decides which mortgage plan works best for you. This includes the amount of loan and rate of interest. Preapproval letters are effective for 60 to 90 days, giving you time to go through listings and make an
offer.
Find the right home.
We’re lucky to live in the age of the internet where homes for sale in Ashland or any part of the world can be found online. But if virtual listings aren’t for you, you can do it the old-fashioned way by driving around your target neighborhoods. You can even do some crowd-sourcing, and ask leads from family, friends, and colleagues. For a hassle-free search, contact a local real estate agent who have the expertise and knowhow in helping you find the home that matches your specific requirements at a much shorter time than if you were to do it on your own.
Make an offer.
When emotions are running high, first-time home buyers often make the mistake of putting in an offer that’s too high just to get ahead of the competition. It’s best to be guided by a real estate agent who will have the objectivity to determine a competitive but reasonable offer price . Your agent will help you craft an offer letter and determine the contingencies to include in your offer to protect your interests while being considerate of the seller’s needs and preferences.
Sign a purchase agreement.
This contract typically includes the following:
- Purchase price
- Mortgage contingency agreement which gives you the timeframe for securing a mortgage
- Other contingencies that you and the seller have agreed to
- Other details of the sale, such as the furniture and appliances included in the purchase
- Details of the escrow, wherein an impartial third party temporarily holds some funds while you and the seller finalize the sale
Finalize the financing
This is the most time consuming part of the process, but a pre-approval can cut the approval period for you. If you have mortgage preapproval, this means the bank or lender already have many of the documents they need for the final loan approval process and they have already done a thorough review of your finances.

This doesn’t mean that pre-approval guarantees final approval. The pre-approving bank may still refuse to grant you a mortgage for various reasons, such as when there are changes in your financial situation between the time of the preapproval and the final approval. In general, however, preapproval can help make the final approval process go faster and easier.

The bank will also be conducting an independent appraisal of the property, which will serve as basis in determining the loan amount you qualify for. If the appraisal is lower than the sale price you agreed with the seller, your options include:
- Renegotiating with the seller
- Paying for the difference out of your own pocket
- Getting out of the sale
Conduct home inspection.
This is done by a professional inspector to make sure that the house is structurally sound. A home inspection is required if you took out a loan backed by the government. But compulsory or not, we recommend you take this step to prepare you for future repair costs. It may also reveal serious problems not disclosed by the seller. If this happens, you can renegotiate the selling price or compel the seller to pay for the cost of repairs.
Begin the closing process.
Closing is when you and the seller sign the documents to finalize the sale and the title for the property is transferred to you.

Other things involved in closing include:
- Home appraisal required by the lender
- A title search to ensure you’re getting a clean title with no liens or encumbrances
- Payment for various closing fees, including loan origination fees, title insurance, taxes, credit report charges, and others. Closing costs usually amount to about 2% to 5% of your home purchase price.

Homes for sale in Ashland

Homes in Ashland vary from single family residences to tasteful condominiums and multifamily properties. As of November 2021, the median home price in the city was pegged at $592,500. Homes spend an average period of 23 days in the market before being snapped up, while in-demand residential property are sold after only 7 days.

Here’s a look at the home price ranges in the city to give you an idea:

Single-family home – $400,000 to $3M
Townhouse – $400,000 to $1M
Condominium – $230,000 to $800,000
Duplex or Triplex – around $700,000

Why work with Ashland Homes Real Estate

For over 40 years, our firm has seen it all—the ups and down of the real estate market through recessions and economic booms. Throughout these changes, we’ve consistently stayed in the Top 3 local companies for sales and listings. We are an independently owned and operated firm that have built a reputation for integrity and transparency over the years.

All our agents are professional, full-time, and most importantly, local. We live in and genuinely love Ashland. When you ask us about homes for sale in Ashland, you can trust us to know what we’re talking about. We live in these parts, and grew up in the neighborhoods you want to be part of. We know the nuances of living in Southern Oregon, and we’re excited to share our in-depth knowledge with you.

Innovativeness is at the heart of our service, letting us stay knowledgeable on market trends. Coupled with our years of experience, this allows us to give our clients the highest level of service.

Ready to buy your home in Ashland? Contact our accomplished agents to help you get started. You can also drop us a message here or at info(at)ashland-home(dotted)com, and we’ll immediately get back to you. Want to speak to us right away? Contact us through 800.334.7499 or better yet, visit our office at 150 East Main Street. We’re located in downtown Ashland, right next to the Oregon Shakespeare Festival and the Ashland Chamber of Commerce. We look forward to meeting you!