The Buckeye State has some of the most beautiful cities in the world. Whether you’re seeking a lively urban sprawl like Cincinnati or a more rural community like Batavia, you’re still about to buy a house in Ohio, which is totally exciting. Ohio was recently named one of the best places for families in the US and has an affordable real estate market. You can’t go wrong with relocating here, and we’re looking forward to helping you get your dream home.
Buying a house in Ohio is a great accomplishment. Whether this is your first time purchasing an abode or your fifth, buying regulations, real estate markets, and home loans vary from state to state. Here’s how to buy a house in Ohio and what to expect throughout this hectic process.
Steps to Purchasing a Home in Ohio
Buying a house in Ohio is a process that requires ample time and patience.
Save Money for Your Down Payment and Closing Costs
Knowing how to buy a house in Ohio won’t do you any good if you don’t have the finances to pay your down payment and closing costs. Some traditional home loans require 20% of the home’s purchase price, but there are plenty of other options to consider.
First time home buyers in Ohio qualify for FHA loans; FHA loan mortgages are insured by the Federal Housing Administration (FHA). These loans aren’t as difficult to qualify for and require a much smaller down payment; you can put down as little as 3.5% on an FHA loan. Regardless of your loan type, the more money you have, the better, as the larger the sum you put down initially, the lower your monthly payment will be.
While common, conventional loans are more difficult to qualify for. Applicants need a minimum credit score of around 620—the highest requirement among mortgage options—and must keep their debt-to-income ratio at or below 43. Typically, a down payment of at least 20% is required to get our of having to pay private mortgage insurance (PMI).
Whether you’re able to get a conventional loan or choose a more affordable route, you’ll want to have your finances in a row. Closing costs are a significant expense most buyers will have to pay; closing costs include fees like appraisal, home inspection costs, title insurance, the origination and underwriting of the loan, and more. While some steps may seem like overkill, these cautions help protect both the buyer and seller from a faulty transition.
Closing costs in Ohio typically cost around 2 to 5 percent of the total loan amount. The median home price in Ohio is $263,100, which would make the closing costs anywhere between $5,262 and $13,155.
Consider Your Credit
Before you buy a home in Ohio, you’ll need good credit. Mortgage companies consider a few things when pre-approving you to buy a home in Ohio, and your credit score is one of them. Your FICO score can be as low as 300 and as high as 800. The average credit score in the US is 716; anything above 700 is considered good (or average), 740 to 799 is considered very good, and 800 to 850 is excellent. The better your credit score, the lower the interest rate you’ll qualify for.
How to better your credit score:
- Pay loans on time
- Pay off any credit cards
- Fix any errors on your credit report
Determine Your Budget
Buying a house in Ohio requires proper planning. The best way to determine what you can afford is by examining your income, debt, and current bills. Experts suggest keeping your monthly mortgage payment below 28% of your gross monthly income. The median household income in Ohio is $66,990, so if you earn around $65,000 to $70,000, your monthly mortgage payment should be around $1,500 to $1,700 per month or below.
It’s important to note that your mortgage payments will include more than what you borrowed from your lender. Often, expenses like property taxes, homeowner’s insurance, and PMI (if applicable) are included in your monthly mortgage.
Get Pre-Approved & Find a Lender – Mortgage Pre Approval Process
Before you start really looking into Ohio homes for sale, you should get pre-approved for a mortgage, which will help you narrow down your search, as you’ll know just how much you’ll be able to borrow from your mortgage lender. It also tells the sellers you’re a serious buyer and that you shouldn’t be overlooked.
You can apply to multiple mortgage lenders at once, ensuring you get the best rate possible. Buying a house in Ohio is a big commitment, and who you get your mortgage through is a crucial step.
The type of loan you take will affect your mortgage rate. For example, there are conventional and FHA loans, but there are also VA loans, which are government-backed mortgages for veterans and their families, and USDA Loans, which are mortgages provided by the United States Department of Agriculture for low—to moderate-income families in designated rural communities. Each of these loans has different incentives, which can affect your rate.
It’s vital to keep an eye out for deceptive mortgage lenders. For example, if a lender offers you a mortgage with an extremely low payment, it may be a red flag. Lenders can set up mortgages to have you only pay the interest (for a certain amount of time), but you will eventually have to pay the principal.
Once you’ve found a mortgage lender you trust, you must gather the following before actually applying for your mortgage:
- Bank statements from the last three months
- Pay stubs from your employer
- Driver’s license or passport
- Most recent W-2 forms or tax reports
- Investment account statements
- Documents representing your monthly debt payment
- A gift letter (only applicable if a friend or family member is assisting with the mortgage or down payment.)
Find a Good Real Estate Agent
You should work with a trusted agent. They should have excellent reviews and a reputation for finding their clients exactly what they need.
Start House Hunting – Should I Buy a House in Ohio?
With all that dreadful paperwork and planning comes the fun part: house shopping! There are tons of factors to consider when looking for your dream house. Everyone has different non-negotiables, amenities they want, budgets, and neighborhood requirements, which all affect where you’ll begin your hunt.
Best Place to Buy a House in Ohio
Blue Ash was rated among the top 20 best US towns to live in, whereas Hyde Park and Old North Columbus are popular as well. Canton and Leetonia are considered more affordable places to call home, and Dublin and Bexley are among the most affluent.
Now that you know how to buy a house in Ohio, and are starting to narrow down your search, first time home buyer programs may be an option for.
Consider Ohio First Time Home Buyer Programs
If you’re a Ohio first time home buyer, you should consider the state’s terrific incentives to help people purchase their first homes.
The first time Ohio home buyer requirements are:
- Someone who has never owned a home.
- Someone who has not owned a home in the past three years.
These requirements can differ depending only on your loan type.
First-Time Home Buyer Loans
The Ohio Housing Finance Agency (OHFA) helps first-time homebuyers in Ohio purchase their dream homes by working with banks and savings institutions to offer specialized loan programs. Eligible buyers can obtain a fixed-rate 30-year mortgage that meets specific purchase price limits and income guidelines suitable for those with low or moderate incomes. Available loan options include 30-year FHA, USDA, VA, and conventional loans, which can be combined with other OHFA benefits like down payment assistance or a mortgage tax credit.
It’s important to note that OHFA does not directly issue loans; to take advantage of these programs, you will have to apply through an approved lender.
Ohio Housing Finance Agency, 57 E. Main St, Columbus, OH 43215 (614) 466-7970
Ohio Heroes Loan
If you are a qualifying veteran or public servant, the Ohio Housing Finance Agency (OHFA) provides a special loan option known as the Heroes Loan. This program isn’t limited to first-time homebuyers and offers reduced mortgage rates to individuals in specific careers, including:
- Teachers, counselors, and school administrators
- Police officers, EMTs, paramedics, and both paid and volunteer firefighters
- Veterans, active duty members, Reserve members, and surviving spouses
- Physicians, RNs, LPNs, nurse practitioners, and STNAs
Additionally, this loan can be paired with down payment assistance.
Ohio Housing Finance Agency, 57 E. Main St, Columbus, OH 43215 (614) 466-7970
Make an Offer on the House You Want
The next step to buy a house in Ohio is to make an offer! Your expert real estate agent will write up a compelling letter to the seller; various points and contingencies will be included. Sometimes, an earnest money deposit is needed, which is typically 1% to 2% of the home purchase price. This deposit sort of reserves the home for you, as the seller will remove your potential future home from the market.
Moving Tips With Bell Moving
- If you’re moving from out of state, you must know how to become an Ohio resident.
- Knowing how to change your driver’s license is crucial, too.
- Are you trying to break a lease in Ohio to relocate to a new OH city? We can help.
Move Into Your New Ohio Home
Buying a house in Ohio is exciting! Now that your home buying process is complete, let Bell Moving & Storage move you into your new Ohio home. No matter where you’re purchasing property in the Buckeye State, we can help! Call our top-rated Cincinatti movers at (513) 942-7500. Or ring Bell Moving’s trusted Columbus movers at (614) 503-0035. We have 100 years of experience and are ready to make this step practically stress-free and fun.
