How to Buy a House in Ohio: A Homebuyer’s Guide

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Edited byAshley Jacobs
Contributions by4 experts
Edited byAshley Jacobs
Contributions by4 experts

Updated: April 5, 2024

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The average property value in Ohio has increased by about 11.8% in the past year, reaching approximately $216,875. This is substantially less expensive than the $357,589 average home value nationwide.

Although price and finding the cheapest places to buy a house in Ohio are major considerations when buying a property, there are other aspects to take into account, such as the mortgage terms. You will also want to consider the cost of living in the locations you are considering.

Long-term advantages can come from knowing how homebuying works. For Ohio homeowners, MoneyGeek's homebuyers guide covers the essentials, including filing an application, calculating mortgage rates, closing the deal and avoiding significant debt.

Key Takeaways

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Ohio's average home value rose by roughly 11.8% over the previous year to roughly $216,875.

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To be eligible for a mortgage, a homebuyer must fulfill the minimum credit score, debt-to-income ratio and income requirements. You typically pay a down payment upfront as well.

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Some essential steps when buying a home in Ohio are identifying the ideal location, calculating mortgage rates, completing your requirements and closing your mortgage loan.

Choose an Ideal Location

When buying a home, location is one of the main factors purchasers look at. Where you choose to live has a big impact on how much your house and mortgage will cost.

Along with choosing the best place to buy a house in Ohio, you should also consider the area's cost of living, ease of access to facilities, local culture and other readily available resources.

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WORK WITH A REAL ESTATE AGENT

If you're looking for the cheapest places to buy a house in Ohio, reaching out to a real estate agent to speed up the process is a wise idea. This is especially true because the housing market can be overwhelming at first.

The ideal real estate agent will be:

  • Knowledgeable about the housing market;
  • Able to communicate ideas precisely; and
  • Reputable in the industry.

Still, which real estate agent is best for you will ultimately depend on the factors that matter to you when purchasing a home.

Contact your family and friends for recommendations if you're unsure of where to start. Another good practice is to request client recommendations from current customers.

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CALCULATE THE COST OF LIVING

The cost of living in Ohio can vary considerably based on the city or county you reside in. Here are some of the expenses that need to be considered as you evaluate certain neighborhoods:

  • Transportation and car insurance
  • Food and groceries
  • Health insurance costs
  • Utility bills
  • Taxes
  • Child care, pet care and more

To determine your monthly costs and how much it may cost an average family to identify the best place to buy a house in Ohio, you can use MoneyGeek's cost of living calculator.

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CONSIDER AFFORDABLE NEIGHBORHOODS

Ohio is a very affordable state to live in, but there are benefits and drawbacks to living there. If you're on a tight budget, you might wish to purchase a home in one of Ohio's less expensive neighborhoods. These include:

  • Beavercreek
  • Bexley
  • Gahanna
  • Heath
  • Lancaster

Note that even though you can buy a house for far less money here, you might have restricted access to public amenities such as hospitals, schools, supermarkets and malls.

Calculate Mortgage Rates

There are many options to choose from when getting a mortgage. MoneyGeek recommends taking a close look at some aspects that have a big impact on your mortgage cost since you might be able to better your rates if you understand how mortgage rates are determined.

Take the time to evaluate your credit score, income, interest rates, loan type, terms and loan amount before making a final decision on a lender.

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SEE YOUR MORTGAGE OPTIONS

There are several different mortgage options available to prospective customers looking for the best place to buy a house in Ohio. It should be noted that different loan types have different rates, terms, conditions and lending restrictions.

MoneyGeek lists below the average interest rates for each type of 30-year loan:

It is advisable to confirm your eligibility before submitting an application because some loans are only available to certain applicants. For instance, VA loans are only available to military members.

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USE A MORTGAGE CALCULATOR

By calculating your mortgage, you can figure out how much it will cost you to buy a home in Ohio.

Using MoneyGeek’s FHA vs. conventional loan calculator can help you see which loan option is best for you. If you're uncertain, MoneyGeek has a number of tips that can help you decide what kind of loan you need.

Once you have determined your rates and estimates, you can determine which home is the best option for you to purchase so that you don’t end up in debilitating debt.

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KNOW YOUR QUALIFICATIONS

Do not forget that each lender has different qualification requirements. Mortgage lenders frequently consider the following factors when assessing your application:

  • Credit score: Although not all lenders require it, creditors frequently favor customers who have a good score.
  • Down payment: Your down payment can impact your ability to get a loan as well as your interest rate.
  • Debt-to-income (DTI) limits: Your DTI ratio shows how much of your income is used to pay off debts that aren't current.
  • Gross income: Your income level is a good indicator of your ability to repay the mortgage.

If you don't have the necessary qualifications, you can try to make up for any gaps in your application.

Prepare Down Payment Requirements

When buying a home in Ohio, you’ll generally have to provide a down payment. This is a percentage of the value of the home and can be as much as 20%.

Different loan types have different down payment requirements. Lenders may also let you put down a smaller down payment if you purchase insurance.

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DETERMINE DOWN PAYMENT REQUIREMENTS

Your down payment may vary depending on the mortgage loan you select. For a conventional loan, a 20% down payment is typically required. USDA and VA loans require no down payment, while a 3.5% down payment is required for FHA loans.

You can determine your down payment rate once you know which loans you are qualified for. Your down payment has a significant impact on your monthly spending. For example, larger down payments usually translate into reduced monthly payments.

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CALCULATE MORTGAGE INSURANCE

Ohio homebuyers should also pay attention to mortgage insurance. This is a tool that protects lenders in case the borrower defaults on their loan.

Loan programs like the FHA and USDA loans, in contrast to VA loans, demand mortgage insurance. Additionally, insurance is necessary for applicants who put down less than 20% of the total cost.

For conventional loans, you can be required to pay monthly private mortgage insurance (PMI). Borrowers might, in some circumstances, be able to eliminate their PMI after several periods of prompt payments.

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DOWN PAYMENT ASSISTANCE PROGRAMS

A 20% down payment may be out of reach for some homebuyers. Fortunately, Ohio has a selection of programs to help with down payments:

  • OHFA YourChoice! Down Payment Assistance: For a down payment, closing or additional costs, this program gives 2.5% to 5%. If the property is not sold or refinanced for seven years, the borrower is not required to repay the cash.
  • OHFA Grants for Grads: This includes down payment assistance of 2.5% or 5% to recent graduates. As long as you stay in Ohio for five years, down payment assistance is forgiven.

If these loans don't meet your needs, you might check into other loans for home assistance. There are other initiatives supporting first-time homeowners if you're researching how to buy a house in Ohio.

Get Pre-Approved for a Mortgage

After choosing an Ohio lender, the next important step is to get a mortgage pre-approval. You can discuss your budget and the lender's requirements once you get pre-approval.

Pre-approval is different from prequalification. When you prequalify, your lender just provides an estimated loan amount. A hard credit check is not necessary for prequalification, but it usually is for pre-approval.

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GATHER NECESSARY DOCUMENTS

To apply for a mortgage in Ohio, you generally need to provide the following documents and information:

  • Photo ID
  • Proof of Social Security number
  • Pay stubs (past 30 days)
  • W-2s (last two years)
  • Property information (if required in the contract)
  • Information about other debts

Learn what your lender needs so you can gather the relevant paperwork. Ask for alternatives if a document isn't available. Also, if you are self-employed, be ready to provide financial data about your business.

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TIME YOUR PRE-APPROVAL

It can be advantageous for you to time your pre-approval. You can speed up the mortgage approval process by gathering the required documents in advance.

Generally, you’ll receive your pre-approval letter within 10 days. The length of your lender's pre-approval letter is typically between 30 and 90 days. It is prudent not to apply for pre-approval until you are ready to make an offer on a house so that you don’t have to reapply for your pre-approval.

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RECEIVE PRE-APPROVAL LETTER

Obtaining a pre-approval letter will allow you to learn how much money you can borrow from a lender. Additionally, it demonstrates that you are a dedicated homebuyer with the means to get a mortgage. You are not limited in how many pre-approval letters you can request, but lenders do a hard credit check that could impact your credit score each time you get one.

A pre-approval letter typically contains the information below:

  • Purchase price
  • Loan program
  • Interest rate
  • Loan amount
  • Down payment amount
  • Expiration date
  • Property address

The specifics of a pre-approval letter, however, vary from lender to lender.

Conduct a Home Inspection

As the buyer of the house, you will usually foot the bill for a home inspection. This is a crucial stage in the purchasing process.

You can learn more about the current condition of the home and whether or not repairs are necessary by getting a qualified third-party home inspection.

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CONTACT A LICENSED INSPECTOR

Hiring a licensed home inspector is a sensible move. You can get recommendations for an inspector from your family, friends or realtor.

The following are often included in standard home inspections:

  • Interior
  • Exterior
  • Doors and windows
  • Electrical
  • Roof
  • Plumbing
  • Fireplace
  • Ventilation
  • Basement

Meanwhile, a house's foundation, mold, wood-destroying organisms (WDO), vermin, sewer and hazardous materials are all examined during special home inspections.

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FOLLOW OHIO-SPECIFIC INSPECTIONS

Some Ohio cities or counties may request that you have inspections before you buy a house, even if it's not typically required. Finding out in advance what your house inspector intends to look at is a good idea because additional checks may be required for your potential home.

Homebuyers can take a few steps to make more logical choices about buying a home rather than ones based on emotion through a house inspection. If you want to feel confident about your home purchase, you can take additional steps throughout the house inspection process to ensure there are no surprises after you buy your home.

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GO THROUGH APPRAISAL

A home appraisal is a crucial stage when purchasing a home in Ohio. A specialist will assign a monetary value to the property based on its market value today. This could provide mortgage companies with more details regarding the amount of money they are willing to loan a customer.

During the house assessment step, an appraiser will inspect the inside and outside of your potential home and gather information about the area around the property. After a physical inspection, the appraiser will next provide the homebuyer with a written report and estimate of the home’s value.

Close Your Mortgage Loan

After carefully reviewing the loan terms, you can now close your mortgage. Be mindful of closing costs when deciding where is the best place to buy a house in Ohio.

In order to cover the expenses of your credit report, appraisal and document preparation, you must pay the lender a fee for closing costs.

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SIGN ALL DOCUMENTS

It can take some time to have your documents ready for closing. MoneyGeek advises reviewing important documents such as:

  • Final loan application: You’ll be asked to sign your loan application to verify that all the details are correct.
  • Mortgage note: This is the legal basis of your mortgage. It lists your mortgage amount, interest, payment schedule and more.
  • Property deed: All the details about the property are listed in the property deed.
  • Closing disclosure: The terms of your loan are listed in the closing disclosure. Lenders have to give you this document at least three business days before closing.

Before signing any documents, be sure you understand their terms and conditions. It is best to consult a specialist or your lender if you come across any unfamiliar terms.

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PAY CLOSING COSTS

You should be prepared to pay closing costs when you buy a home. Here are some of the expenses you might incur:

  • Homeowners insurance: Homeowners are covered from liability for harm done to their homes and personal belongings, as well as certain incidents that may happen on the property.
  • Origination fee: Some lenders charge an origination fee when they give you your loan. This is generally a percentage of the loan.
  • Fee for the appraisal: This is the amount paid to an appraiser to assign a monetary value to your home.
  • Escrow: The lender sets up an account in which to hold the borrower's real estate taxes, private mortgage insurance and, if applicable, house insurance.
  • Attorney’s fees: This refers to the amount you pay your lawyer for his or her services. This fee varies from one lawyer to another.
  • Title insurance: If a property is lost as a result of a title defect, the fee safeguards the lender.

In some cases, the seller may pay a portion of your closing fees.

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COMPLETE YOUR HOME PURCHASE

Before closing the deal, make sure you have researched Ohio's top neighborhoods, mortgage rates and gathered all the required paperwork. In addition, a pre-approval document, a loan closing and a full inspection should have been completed.

Being a homeowner entails a variety of responsibilities, such as creating a budget for house maintenance costs. When you complete the appropriate steps, you have made progress toward homeownership, but your journey is not yet complete. The next stage is to manage your finances and mortgage payments each month. One tip is to make a higher down payment to ensure a lower monthly rate. You can also set up autopay to ensure you never miss a payment.

Ohio Homebuying Details

If you're buying a property in Ohio, do your research on the area, consider your mortgage selections and check into lenders who can help you achieve your objectives. There may also be state-specific tasks to complete when buying a home.

Don't be afraid to contact your lender or a real estate professional to get ready to buy a home in Ohio. Additionally, you can qualify for homeowner assistance programs in Ohio that could help you with your new home purchase.

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When it comes to closing costs, you can try to negotiate to get the seller to pay the cost of real estate transfer taxes, which make up a major portion of these charges.

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If you just graduated from college, you're in luck because of its Grants for Grads program. The Ohio Housing Finance Agency can cover up to 5% of your closing fees and down payment requirements.

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As a homeowner in Ohio, be sure to budget for the taxes you will have to pay. Rates vary from county to county.

Frequently Asked Questions About Buying a Home in Ohio

Buying a home in Ohio can be confusing. To assist you in beginning your property search, MoneyGeek has provided answers to some frequently asked questions.

What are the most important questions to ask when buying a house in Ohio?
Is buying a house in Ohio a good idea?
Is it wise to buy a house in Ohio in 2023?
How much income do I need to buy a house in Ohio?
How much is property tax in Ohio?
Which Ohio city is the cheapest to buy a home?

Experts' Tips About Buying a Home in Ohio

  1. What are the key factors to consider when buying a house in Ohio?
  2. What is the minimum credit score required for purchasing a house in Ohio?
  3. What are some common mistakes that home buyers make when trying to purchase a property in Ohio, and how can they avoid these pitfalls?
  4. Are there any programs available to help first-time home buyers in Ohio?
Ron Cheung, Ph.D.
Ron Cheung, Ph.D.Professor of Economics in the Economics Department at Oberlin College
Eunjee Kwon
Eunjee KwonAssistant Professor at the Department of Finance, Carl H. Lindner College of Business, University of Cincinnati
Eric Sztanyo
Eric SztanyoOwner at Team Sztanyo and We Buy NKY Houses
Jesse Hurst, CFP®, AIF®
Jesse Hurst, CFP®, AIF®Founder of Impel Wealth Management
Jordan Patrick, CFP®
Jordan Patrick, CFP®Financial Planner at Commas
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