Buying your first home can be overwhelming. But if you break it down into simple steps, you can feel much more confident and focus on the excitement of the process rather than the stress of it. Here’s what you can expect when buying a home in Ohio.
- Save Up for Your Down Payment and Closing Costs
Before you fill out any paperwork, start saving up for your down payment. Most traditional home loans require 20% of the home’s purchase price up front, while other types of mortgages, like an FHA loan, require much less. Regardless, you’ll want to make sure you have enough on hand to put down a good amount of money. The more you put down up front, the lower your monthly mortgage payments will be. You’ll also need money to pay for your closing costs if you’re not financing them into your mortgage. The average closing costs for a $200,000 Ohio home are $3,376, without taxes. - Clean Up Your Credit
Check your credit report and credit score before applying for a loan. By law, you can get a free copy of your credit report every 12 months at annualcreditreport.com. Be sure to review your credit report for any errors and dispute them early on in your home buying process. It can take time for credit bureaus to change incorrect information, so cleaning up your credit as soon as possible is helpful. - Determine How Much Home You Can Afford
Before you start shopping for houses, determine your budget to get a sense idea of what you can afford. Use KEMBA Financial Credit Union’s mortgage calculator to get started. This will give you and your real estate agent a good idea of your range. Remember, you may get approved for more than you can realistically afford, since most calculators and mortgage companies don’t ask about or factor in every regular expense. It’s wise to add a dose of common sense to any mortgage payment decision to ensure you can comfortably afford your monthly payments. - Get Pre-Approved for a Mortgage
Another step you’ll want to complete before house shopping is to get pre-approved or pre-qualified for a home loan. This will show sellers you are a serious potential buyer, which can help in the negotiation process. KEMBA can help you get pre-qualified for a mortgage. - Shop for a Home Within Your Budget
Now comes the fun part: shopping for your dream home in central Ohio. Before you begin, decide which amenities are nonnegotiable for you and which aren’t. It’s also important to consider the neighborhood and quality of local school districts. Ask your friends, family, or a KEMBA mortgage advisor to refer a good real estate agent who can help you navigate the process. - Make an Offer on the House You Want
When you find the home you’d like to buy, it’s time to make an offer and negotiate. Your real estate agent should be able to guide you through this process and handle everything on your behalf. Make sure you know the selling prices of other comparable homes as well so you can negotiate accordingly. - Put a Deposit Down
Once you and the seller have both agreed to the home’s purchase price, you’ll need to put down a deposit to show you are serious and secure the home. This money will go into an escrow account. - Submit Your Mortgage Application
To finance your home, you’ll need to submit your mortgage application. KEMBA offers a variety of mortgage options, from fixed-rate mortgages and adjustable-rate mortgages to JUMBO mortgages, FHA loans, VA loans, and more. Loan payment terms also vary and typically range from 15 to 30 years for most loan types. Talk to your mortgage officer to figure out what works best for you and your family. - Close the Sale on Your Home
You’ll need to have your home inspected before you can move in. Home inspections are a great way to figure out if the house has any major defects before you are locked into the sale. This can also help with your negotiation, as many buyers ask sellers to fix things or lower the price based on the inspection results. Once all terms are met, you will need to deposit the funds and the seller will need to deposit the deed. Depending on where you live, this process may vary. It’s also important to hire an attorney who can walk you through all the paperwork that needs to be signed. - Move Into Your New Ohio Home
Once you’ve gone completed the process, you’ll be handed the keys to your new home. Start packing and calling up your friends to help you move or get ready to hire a moving company. Don’t forget to set the date for your housewarming party!
Buying a home is a major milestone and should be handled with care. Make sure you find friendly and knowledgeable people along the way to help make your homebuying journey as seamless as possible. If you’re ready to talk to one of our mortgage officers, contact KEMBA Financial Credit Union today.