Buying a house in Ohio is an exciting prospect. The Buckeye State offers residents many benefits, from a low cost of living to excellent public schools. Plus,

Ohio

is consistently ranked one of the best places in the country to start a business.

But while buying a home can be exciting, it’s by no means easy. There is a lot of legwork that goes into making the process run smoothly.

Car and home insurance

broker

Jerry

can help. This guide will tell you everything you need to know about buying a home in Ohio so you can make a more informed decision.

Figure out your finances

If you haven’t figured out your finances yet, now is the time. From checking your credit score to coming up with a down payment, these are the financial factors you need to have in order before buying a house:

Check your credit score

Your credit score might be the most important factor in getting approved for a mortgage—almost everything else rides on that one little number.

You want to shoot for a score of at least 620 to get a conventional mortgage. If you’re not quite there, there are a few things you can do to bring your score up to snuff:

Correct any errors you find on your credit report

Get caught up on late or missing payments

Build your credit through on-time payments and smart use of credit

Also, keep in mind that there are private loans and government programs geared toward people with low credit. Depending on the lender, you can sometimes qualify with a score as low as 500.

Calculate your debt-to-income (DTI) ratio

Mortgage lenders use your debt-to-income ratio to determine if you’ll be able to afford future loan payments.

In layman’s terms, that means they want to be sure you’re bringing more money in than you’re paying out each month.

To figure out your DTI, add up your recurring monthly payments and divide it by your gross monthly income (before taxes).

Don’t forget to include:

Child support and alimony

Student loan payments

Minimum monthly credit card payments

Auto loans

Personal loans

Estimated monthly mortgage payment

Lenders usually look for a DTI less than 36%, though some go as high as 43%. Generally, the higher your debt-to-income ratio, the less likely you’ll be approved for a mortgage.

With a median monthly income of $4,676 in Ohio, your DTI should look something like this:

$1,683 / $4,676 = 43%

Determine your down payment

Do you know how much down payment you can afford? This will play an important role in determining what kind of house you can buy.

Conventional mortgages usually require about 20% of the total loan amount as a down payment. So, in

Ohio

, where the average home costs about $196,213, you’d need a down payment of $39,000.

Unfortunately, coming up with that much money in cash is difficult for many people, but there are other options.

Government-backed loans, like VA and FHA, have lower down payment requirements for people who qualify. For instance, military veterans may be eligible for a VA loan with no down payment, while FHA loans require a minimum of 3.5%.

Prepare for closing costs and other fees

Closing costs are the fees and expenses due before completing a real estate transaction.

Depending on your lender and your contract with the seller, closing costs can vary, but they typically include things like:

Appraisal fees

Credit report fees

Title searches

Document recording

Inspections

Property taxes

Mortgage insurance

Homeowners insurance

The seller is responsible for some of these fees, but the buyer usually pays the bulk. The buyer’s total is generally between 2-5% of the loan amount.

MORE: What is an escalation clause when buying a house?

Key Takeaway: Costs for buying a home can add up. Make sure your finances are in order before you start the process.

Look for homeowners insurance

Although homeowners insurance isn’t legally required in Ohio, your mortgage lender will likely expect you to have it before closing.

This can add a significant expense to your budget: in Ohio, the average cost of homeowners insurance is $1,111/year.

To save money on insurance, it pays to shop around. Check with several insurance carriers and see who offers the best coverage for the cheapest rates. Most offer a discount if you

bundle your home and auto policies together

Not sure where to start? Let car and home insurance broker

Jerry

handle it for you, and get dozens of quotes in a matter of minutes!

MORE: What is a new home insurance discount?

Key Takeaway: Shopping for home insurance shouldn’t be a one-and-done experience. Take your time to compare different policies. Make sure you are getting the coverages you need at a price you can afford.

Get preapproved for a mortgage

We cannot stress this enough: getting preapproved for a mortgage is one of the best things you can do when you’re shopping for a home.

First and foremost: many sellers won’t show you a house unless you have a mortgage preapproval letter. They don’t want to waste their time with buyers who might fall through later.

More importantly, preapproval can save you from potential heartbreak. Working out what you can afford before you start looking means you’ll know what homes fall within your budget.

How to pick the right mortgage in Ohio

When choosing a mortgage in

Ohio

, compare lenders. There are three main things to look for: the loan type, the interest rate, and the term.

Loan type: First, decide what kind of loan you’re looking for. Options include traditional lenders, like banks and credit unions, mortgage brokers, government programs, and more.

Interest rate: Based on their pricing models, different mortgage lenders offer different interest rates.

Term: The two most common mortgage terms are 15 years and 30 years.

Longer-term mortgages generally come with lower payments and a higher interest rate (usually around 3.5%), while shorter-term mortgages come with higher payments and a lower interest rate (usually 2.5% or lower).

Look for a house

Looking for a house is fun! It can also be frustrating and discouraging—especially when you can’t find “the one.” You can make your hunt less stressful (and successful) by figuring out a few things first.

Pick your city or neighborhood

Location, location, location: the neighborhood you choose to live in is just as important as the house. By carefully evaluating communities before making an offer on a home, you can avoid disappointment.

Think about what’s important to you. Do you want a neighborhood with a great school system? Easy access to public transportation? A hot food scene?

Even if you already have a city in mind, take the time to research other spots. Ohio has some amazing cities—like

Toledo

Cincinnati

, and

Cleveland

—and offers a reasonable cost of living.

Make a list of all the places that meet your needs and fit into your budget, and then decide where you’d like to live.

MORE: What is additional living expenses (ALE) coverage?

Buyer’s market vs. seller’s market

Whether your local area is experiencing a buyer’s market or a seller’s market can have a massive impact on the price you pay for a new home.

If you’re looking for a house, you’ve likely heard those terms. However, you might not be aware of what they mean.

In layman’s terms, a buyer’s market is when there are more houses available on the market than there are buyers.

A seller’s market is when there are more buyers than available homes.

If you’re thinking about moving, a buyer’s market is the ideal time to look. You might be able to negotiate a lower price and better concessions than you would in a seller’s market.

Find a real estate agent

Ohio doesn’t require that you have a real estate agent to buy a house—but it’s still a smart idea.

Having a great real estate agent is vital to the home buying process. They will be your go-to person throughout the entire affair—from showing you houses to helping you find a lawyer to negotiating the best price.

Take the time to research different agents who are experienced in your desired neighborhood, and pay attention to things like years of experience and online reviews.

Once you have a list of potential candidates, set up interviews to see if they’re a good fit. Test their knowledge of the neighborhoods you’re interested in and the type of home you’d like to buy, and make sure your personalities click. After all, this is someone you’ll be spending a lot of time with.

Make an offer

Once you find a house that checks all your boxes, it’s time to make an offer. Your real estate agent can help you calculate the best bid and fill out the necessary paperwork.

If it’s a seller’s market, you may need to work to make the offer more attractive. That doesn’t necessarily mean offering more money—it may mean waiving contingencies or making an offer free of concessions.

It’s also important to know how quickly homes are moving in your market. In Ohio, homes typically spend an average of about 43 days on market before receiving an offer. If your dream home has been available for a month or more, consider making a bid as soon as possible.

Key Takeaways: There are many moving parts when it comes to making an offer on a house. A great real estate agent will make the process easier with their guidance and support. Once your offer is accepted, a purchase agreement will be made and a closing date set.

MORE:

Can you have a mortgage without homeowners insurance?

How to save on homeowners insurance

Buying homeowners insurance is a necessary part of owning a home. Unfortunately, it’s one that most people don’t enjoy. Luckily, with Jerry, shopping for a homeowners

Jerry

makes getting a great rate on home and auto insurance fast and easy. Just enter your information in the app and get quotes from the nation’s top insurers, all in less than a minute.

“I moved states recently and my old provider didn’t cover me anymore, so I tried using

Jerry

. They handled everything from fetching the quotes to purchasing the new policy. Now I save $30 a month with Progressive!” —Kay J.

FAQs

How much money do I need to buy a house in Ohio?

Buying a house in Ohio doesn’t have to break the bank. In fact, with a median home value of $162,933, living in Ohio is more affordable than in most other states. To live comfortably, you’ll need a household income of around $55,000/year.

What credit score is needed to buy a house in Ohio?

To get a conventional mortgage in Ohio, you’ll need a credit score of at least 620. However, you may be able to qualify for some government programs with a credit score as low as 500. For instance, if you are a former member of the U.S. military, you may be able to get a VA Loan.

What is the best place to buy a house in Ohio?

There isn’t a wrong place to buy a house in Ohio! By all accounts, the Buckeye State is a beautiful place to live. That being said, the housing market is booking in Cleveland, Cincinnati, and Columbus, where homes values are expected to increase significantly in coming years.

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