Considering a move to the “Sooner State?” Oklahoma has only about 4 million residents, but it provides a dramatic backdrop of towering mesas, prairies, rivers and a slice of the Ozark mountain range.

It’s also an affordable place to buy a home. In 2017, the median owner-occupied home in Oklahoma was valued at $137,400, compared to a median value of $217,600 nationwide, according to an estimate for that year from the U.S. Census Bureau.

Affordability isn’t limited to rural parts of the state. In a recent international housing affordability survey that looked at 91 major metropolitan areas worldwide, researchers at Demographia found that Oklahoma City, the state’s capital, ranked as the third most affordable city after Pittsburgh, Pa., and Rochester, N.Y.

Sale prices in Oklahoma have been trending upward over the last few years. According to data compiled by the Oklahoma Association of Realtors, the average sold price at closing in 2018 was $186,619, up 2.88% from 2017 and up 7.06% from 2016. Homes typically sit on the market just under two months prior to sale. Nationwide, homes were on the market for 42 days in November 2018, according to a report from the National Association of Realtors, making Oklahoma’s housing market competitive, but not hectic.

As with other states, rules and regulations govern the housing market in Oklahoma.

Home seller and buyer laws

• Property disclosures. Oklahoma law requires sellers to complete a residential property condition disclosure statement to inform potential buyers about the condition of the property, known defects and whether appliances and utilities, such as heating and plumbing systems, are in working order. Sellers are required to give this disclosure statement to buyers before accepting a purchase offer.If a seller never occupied the home and has no knowledge of any property defects, they have the option of completing a residential property condition disclaimer statement. The disclaimer is aimed at confirming that a seller is not making any disclosures about the condition of the property.For homes built before 1978, sellers in Oklahoma are also required to disclose any lead-based paint that they know of in the home. In addition, they need to give prospective buyers copies of reports from any lead testing that was done at the home. Buyers, meanwhile, have the right to request a 10-day window during the buying process, so they can have a lead-based inspection performed.
• Foreclosures. Oklahoma law allows for both judicial and non-judicial foreclosures. In a judicial foreclosure, lenders must file a lawsuit and obtain a court order to foreclose on the property. In a non-judicial foreclosure, a “power of sale” clause is included in the deed of trust or mortgage. With this kind of foreclosure, after an established waiting period, the lender can foreclose on the house if the homeowner defaults on their mortgage payments.If a lender chooses to do a non-judicial foreclosure, Oklahoma state law prevents so-called deficiency judgments. This means a lender can’t sue the borrower for additional money to cover any shortfall if the sales price of the foreclosed property does not cover the outstanding mortgage balance.
• Equitable distribution. Oklahoma is an equitable distribution state, as opposed to a community property state. This means that in a divorce, assets that were acquired during a marriage aren’t necessarily split 50/50 and instead are distributed as fairly as the court sees fit. On the other hand, property that either spouse acquired separately before marrying, as well as inheritances, legal settlements and gifts, remain the property of the owner.

In Oklahoma, a husband and wife can hold real estate as:

• Joint tenants. When one owner dies, the other will automatically become the sole owner of the property.
• Tenants in common. Each spouse owns an interest in the property as if he or she is a sole owner. One spouse’s share of the property is not passed automatically to the other spouse when one dies.
• Community property. This form of ownership is only available to married couples who purchase a property during their marriage. Each spouse owns 50% of the property and can dispose of his or her interest in the property or will it to someone else.
• Escrow state. In some states, a lawyer is required to represent a buyer during the course of a home purchase, and that person may also prepare mortgage documents and assist with clearing title work. Oklahoma, however, is an escrow state, which means that an independent escrow officer can oversee closing details and the signing of a purchase agreement.

Taxes

Oklahoma’s real estate transfer tax is based on the property’s sales price and calculated at the rate of 75 cents per $500, according to the Oklahoma State Tax Commission.

This means if a home sold for $250,000, the transfer tax would be $375 ($250,000 divided by $500 and multiplied by 0.75). Your lender is required to disclose the exact amount of transfer taxes payable once you’ve identified a property.

Oklahoma has one of the lowest property tax rates in the U.S. According to a 2018 analysis by the Tax Foundation, a policy nonprofit group, Oklahoma’s property tax collection per capita in 2015 was $678. This means Oklahoma had the second lowest property tax rate in all 50 states, with only Alabama coming in lower, at $540 per capita.

Like some states, Oklahoma provides either full or partial property tax exemptions for certain homeowners, according to these guidelines:

• Every homeowner receives an exemption of $1,000 of the assessed value for their primary residence.
• Households with gross income under $20,000 can receive an additional $1,000 exemption on their primary residence.
• Property values are frozen for seniors if their income is at or below the median for their county or metropolitan area.
• Seniors with income below $12,000 can claim a credit of up to $200 against their income tax if their property tax exceeds 1% of their total income.
• Seniors who live in manufactured homes and whose annual income is under $10,000 can claim a $2,000 exemption.
• Honorably discharged veterans who are 100% disabled, as well as surviving spouses of veterans killed while on active duty, are fully exempt from property taxes on their primary residence.

Conforming loan limits

The conforming loan limit for mortgages purchased by either Fannie Mae or Freddie Mac is $314,827 for one-unit properties in every county in Oklahoma.

Conforming loan limits are a cap on the size of a mortgage that Fannie and Freddie are willing to buy as they work to both stabilize the mortgage market and make loans more affordable. For consumers who have good credit, conforming loans usually offer the best interest rates. Loans above the limit are known as jumbo loans, and they tend to be riskier and command higher interest rates.

Prospective homebuyers in Oklahoma have access to several in-state assistance programs.

OHFA 4Teachers / OHFA Shield

The Oklahoma Housing Finance Agency (OHFA) offers two mortgage programs that can make owning a home more affordable. OHFA 4Teachers is available to borrowers who have a current Oklahoma State Department of Education teaching certificate and who are currently under contract with any accredited Oklahoma public, private or parochial school. Meanwhile, the OHFA Shield program is available to:

• Borrowers who are either currently employed as a firefighter with a fire department for an Oklahoma municipality or represent a volunteer department as a volunteer firefighter.
• Borrowers who are currently employed in law enforcement by an Oklahoma municipality or serve as volunteer law enforcement officers or reserve law enforcement officers.
• Borrowers who are currently employed either as emergency medical technicians (EMTs) or as paramedics for an emergency medical services provider.

Both OHFA programs offer qualified first-time buyers a quarter-percent reduction off the daily published interest rates. However, to qualify for either program, a property can’t cost more than $276,100. Also, maximum income amounts apply per county and are based on family size. For government-backed loans, borrowers can’t have a debt-to-income ratio that is greater than 45%, or 50% for conventional loans. They also need a credit score of 640 or more.

OHFA Dream

OHFA Dream is a down payment assistance program that’s available for either conventional loans or loans insured by the federal government.

Eligible borrowers can receive either 3.5% or 4% of their total loan amount to put toward the down payment on a home. The buyer does not have to be a first-time homebuyer.

To qualify for down payment assistance with a government-backed loan, a borrower’s income can’t exceed a maximum limit. For 2019, that limit is $120,000 for every county in Oklahoma. To qualify for a government-backed loan, a property’s purchase price in Oklahoma also can’t exceed the current conforming loan limit of $314,827.

For conventional loans, a borrower’s income must not exceed 115% of the area median income (AMI) for their county. For 2019, AMIs in Oklahoma counties range from $75,325 to $93,265. A maximum loan limit of $453,100 also applies.

OHFA Gold

The OHFA Gold program is available to first-time homebuyers (exceptions apply in certain counties) and provides down payment assistance equal to 3.5% of the total loan amount. This program can be used together with OHFA 4Teachers and OHFA Shield.

Under the Gold program, the maximum purchase price for a home in all Oklahoma counties is $276,100. Maximum income limits also apply per county and are based on family size and whether the home is in a targeted or non-targeted area. For 2019, they range from $65,500 to $93,265.

Targeted areas are either:

• Census tracts in which 70% or more of the families earn income that is 80% or less of the statewide area median; or
• An area of chronic economic distress.

To learn more about the help OHFA offers to prospective homebuyers, go here.

To get your best rate on your mortgage, follow these tips:

Contact at least three lenders on the same day

Mortgage rates change constantly and also vary depending on the type of lender. If you’re shopping for a mortgage, get quotes from lenders on the same day to make your best possible comparison.

Give each lender the same information

Make sure you provide the same information to each lender. This includes information about your income, assets and debts. Also, let your lender know what type of loan you are interested in. You’ll have a hard time comparing a quote for say, a 30-year, fixed-rate loan to a 7/1 ARM, a type of adjustable-rate mortgage where the interest rate is fixed for the first seven years.

Add up all the lender fees to confirm the costs

Getting a mortgage involves many fees, including loan origination and underwriting fees, broker fees and other closing costs. Potential lenders should provide you with an estimate of the fees you’ll pay with your loan. Some of these are negotiable, while others are set by state or local statute. Add up the fees to compare costs for each lender. If you don’t understand some of the fees on the estimate, ask the lender to explain.

Know when to lock in the rate

Once you have loan terms that work for you, you may want to lock the interest rate with your lender. Locking a rate holds the interest rate for a set period of time, usually 30 to 60 days, and also prevents your loan from being affected by rising interest rates while it is being processed. If your closing extends beyond that date, the lender may charge a fee to extend your rate lock.

Of course, the downside to a locked-in interest rate is you may end up paying a higher mortgage rate if rates should fall. Check to see whether your lender offers a “float-down” rate-lock option, so you can benefit from a drop in mortgage rates.

The information in this article is accurate as of the date of publishing.