Are you a first-time home buyer in Ohio? Continue reading to learn about the 7 tips you should be aware of to make your first Ohio real estate purchase a smooth process.
Tip 1 – Find a trusted real estate agent
Home buying is complicated, and it helps to have a real estate agent that you trust walking you through the entire process. A real estate agent can help you not only with finding your home, but also with negotiations, paperwork and dealing with any unexpected issues that arise during the closing process.
As a first-time home buyer in Ohio, you should research local real estate agents who are familiar with the area you are looking to buy in as they will have a pulse on expectations and prices as well as be able to provide you with unique insights into the communities.
For example, if you live in Granville, look up “realtors Granville Ohio” or search for local agents through the Remax Ohio search. Once you have the names of a few local real estate agents, make sure you read their reviews and meet with them to find someone you are comfortable with guiding you through this important purchase.
Tip 2 – Know your loan options
If you need to qualify for a loan to complete the purchase your home, you will need to understand what options are available and decide on which type of loan would be the best fit for your family.
If you are looking for a conventional loan, you will typically need to be prepared for a down payment of 20% or higher to qualify.
If you need a smaller down payment, see if you qualify for other loan options such as GSE-backed loans, USDA loans or VA loans. However, you need to be aware that these options will likely require you to pay mortgage insurance and your loan application may also be subject to greater scrutiny.
Tip 3 – Shop around for a mortgage
Make sure you shop around for a mortgage, so you do not potentially leave thousands of dollars on the table by only talking to one lender.
Many first-time home buyers make the mistake of going with the first lender they speak to because of all the moving parts involved, lack of familiarity with the process and the quick pace at which things need to get done.
Instead of being rushed into making a decision, make sure you are prepared with the time it takes to shop around so you can compare rates, lender fees and loan terms and are confident that you are getting the best deal on your mortgage.
Tip 4 – Know how much home you can afford
In general, experts recommend that your house payment should not exceed 28% of your gross monthly income. Make sure you get a clear understanding of what your down payment, mortgage, insurance and tax payments would be to make sure you know what price range you can realistically afford. You will also need to figure in the cost of home ownership including things like utilities and ongoing maintenance and repairs.
There are many online calculators that can help you calculate all of these factors to give you a general range of home you should be looking at.
Tip 5 – Save for closing costs
Many first-time home buyers are caught off guard by closing costs as they only focus on saving for the down payment. On average, closing costs can be about 3-4% of the purchase price of the home and will vary based on where you live, the type of property you are buying and the type of loan you are choosing.
In some situations, you can avoid paying closing costs by getting a no-closing cost mortgage but you will need to look at whether this would benefit you in the long run as the lender may charge you a higher interest rate or wrap the closing fees into the total mortgage owed.
Tip 6 – Get pre-qualified
At this point you are ready to start looking at properties and make an offer. In today’s competitive market, if you are not making a cash offer, you will need to have a pre-qualification letter from a lender in hand to even be considered a serious offer. This letter indicates that a lender believes you are qualified for a loan up to a certain amount that is based on information you provided on your assets, income and expenses.
Tip 7 – Be ready to compromise
When you are looking at properties, the top 3 priorities for most will be price, size and location. For many home buyers, especially first-time home buyers, it is important to understand that finding the “perfect” home may not be a realistic expectation.
When searching Ohio realty, make sure you have an open mind and look at properties that meet your needs and you can afford, even if it means the house isn’t exactly in the neighborhood you would like or it is not quite as large as you want it to be.
We hope that these 7 tips help you in your first home buying journey.