The path to homeownership can feel like a never-ending journey. Follow these steps to reach your destination!
1. Meet with a lender.
Contact a lender to get pre-qualified. A lender can pre-approve a borrower to a certain amount. Pre-approval could be an advantage when making an offer.
2. Determine how much you can afford to borrow.
Your debt-to-income ratio helps determine the amount of loan for which you qualify. Your monthly payment divided by monthly gross income is called front-end ratio. Your total monthly debt payments divided by your monthly income is called back-end ratio. Use a mortgage calculator to determine your house payment.
Your lender will provide you with a loan estimate of closing costs and payments due. You will need to provide down payment and closing costs to purchase your home. OHFA’s First-Time Homebuyer and Next Home products provide qualified buyers with down payment and closing costs help.
3. Hire a real estate agent.
A real estate agent can provide you with information about the homebuying process. Before sharing information, make certain that the agent is representing you.
4. Find your new home.
When looking for a home, consider the following:
- Location.
- Condition of the home.
- Expenses such as taxes, insurance and utilities.
- Availability of police, fire protection and other city services.
- Size, number of rooms and amenities of the home.
- Condominium fees or homeowners’ association dues.
5. Make the offer.
The purchase offer must be in writing. If the seller accepts, it becomes a contract. Consider having a real estate attorney prepare or review your offer. Your offer should include:
- The total price you agree to pay for the house.
- Additional items included in the purchase, like appliances or window treatments.
- The down payment amount.
- The earnest money deposit accompanying the offer.
- The time to arrange financing after the offer is accepted and the loan type.
- A time the title will transfer.
- The date you take possession.
- Provisions for inspections.
- The date and time your offer expires.
6. Obtain a home inspection.
Have inspections conducted by a qualified home inspector. An inspection contingency in the contract allows you to withdraw or amend your offer if there are unfavorable results. Request structural, mechanical, roof, furnace, wood boring insect and radon inspections.
7. Purchase homeowner’s insurance.
You will need to purchase homeowner’s insurance prior to closing. If the property is designated in a flood zone, you may be required to purchase flood insurance. If the home contains a sump pump, you may want to inquire about sewer backup insurance.
8. Close on your new home.
Once all conditions of the contract are met, the closing is scheduled. In Ohio, the closing will be a roundtable or escrow closing, depending on the location of the home. Once completed, the deed is sent to the county recorder to record your ownership of the property.
When you’re ready to make your dream of homeownership a reality, contact an OHFA-approved lender!
This article is presented with paid support by the Ohio Housing Finance Agency.
The Ohio Housing Finance Agency is the state’s affordable housing leader. The Agency provides opportunities for Ohioans to locate affordable housing and offers a variety of programs to help first-time homebuyers, renters, and others find quality affordable housing that meets their needs. The Agency also works with developers and property managers of affordable housing throughout the state. Discover how OHFA’s programs can help you. For more information, visit myohiohome.org.
