Now that the housing market is finally calming down after the pandemic, buyers are facing a new challenge: Soaring mortgage rates.
In Ohio, the average 30-year fixed mortgage rate is 5.55% — up from 2021's historic lows. This raises the average monthly mortgage payment to $990 (assuming a 20% down payment at the median home value).
But buying a home in Ohio is still possible, even for first-time home buyers. Many markets are seeing frequent price drops and fewer offers, giving motivated buyers the upper hand in negotiating for the best price.
In this guide, you’ll learn how to buy a house in Ohio with confidence no matter what the market brings. Learn why you can trust our advice.
Whether you're actively house hunting or just starting to browse homes on Zillow, it's never too early to find a great local realtor to guide you on your search. An experienced agent can help you navigate a tricky housing market, explore your financial options, and negotiate the best deal possible.
Best of all, hiring a real estate agent comes at no extra cost to you — since the seller typically pays both their listing agent and your buyer's agent.
Ready to find a great local realtor, but not sure where to start? The best (and easiest!) option is to try a free agent matching service like Clever Real Estate. Answer a few simple questions about your home buying goals, and Clever will match you with hand-picked agents from Keller Williams, RE/MAX, and other top brokerages in your area. Find a top local agent and make your home buying dreams a reality today!
Step 1: Save for a down payment
Your down payment is the first part of your home's purchase price that you pay at closing. Your mortgage lender will pay the remaining balance.
Typically, mortgage lenders in Ohio want you to contribute 20% of the purchase price as a down payment. That would be $43,349 for a $216,746 home — the typical home value in Ohio.
However, you have options to lower your down payment amount.
Government backed loans, like VA and FHA loans, allow you to contribute 0% and 3.5% of your home's purchase price respectively. Even conventional loans allow for down payments as low as 3-5% (though the minimum varies by lender).
Minimum down payment (%)
Down payment ($)
Based on typical home values from Zillow (August 2022)
But making a down payment of less than 20% comes with some risks.
First, because you're borrowing more money, you'll have a higher monthly payment and pay more in interest over the life of your loan.
Based on home values from Zillow (August 2022) and a 5.55% interest rate for a 30-year loan.
Second, you may have to purchase mortgage insurance.
Conventional loans require private mortgage insurance (PMI) until your loan balance reaches 80% of the purchase price. FHA loans, on the other hand, require a mortgage insurance premium (MIP) for the life of your loans.
Mortgage insurance costs around 1% of your mortgage balance annually. However, rates vary based on your down payment and credit score. Typically, your mortgage insurance payment is added to your mortgage payment each month.
VA loans don't charge mortgage insurance. Instead, you'll pay a VA loan funding fee at closing, which can range from 1.4% to 3.6% of the purchase price.
Ohio down payment assistance programs
The state of Ohio offers several down payment assistance (DPA) programs for first-time and low-income homebuyers. Eligible buyers can utilize these programs and receive a grant or second mortgage to cover closing costs or a down payment on a home.
Here are a few DPA programs geared towards Ohio residents:
The Ohio Housing Finance Agency (OHFA) offers second mortgages for first-time and repeat homebuyers through it's YourChoice! DPA program. Participants can choose from second mortgages between 2.5% and 5% of their home's purchase price, and the loan is forgiven after seven years if the buyer doesn't sell, transfer, or refinance the property.
Eligible borrowers must have a credit score of at least 660, complete a homebuyer education course, and meet household income limits.
Communities First DPA Program
The Port offers grants to eligible homebuyers through its Communities First program. Participants can choose financial assistance of 3%, 4% or 5% to receive the aid they need without increasing their interest rates.
Income limits are based only on the borrower, not the entire household. To be eligible, you need to have a credit score of 640 or higher and not exceed a 45% debt-to-income ratio.
U.S. Department of Housing and Urban Development
Alternative DPA programs in Ohio can be found here.
Step 2: Find a great real estate agent in Ohio
Your real estate agent will be your main ally during the home buying process. Besides finding and showing you properties, your agent will help you make offers, negotiate contracts, and navigate the closing process. Plus, they can recommend other service providers like title companies and inspectors to help you buy your home in Ohio.
Don't rush into choosing an agent. Instead, take the time to research and interview multiple real estate agents who have experience in the neighborhoods you're interested in. You should pay attention to a realtor's:
- Years of experience
- Number of transactions in the last year (the more the better!)
- Experience in your price range
- Overall review score
- Individual reviews and complaints
Step 3: Get preapproved for a mortgage
A mortgage preapproval letter is an offer to lend you up to a certain amount of money to purchase a home. It shows sellers that you are a serious buyer who is financially qualified to make an offer on a home.
Most sellers in Ohio will require preapproval before showing you their home.
You don't have to decide on one lender right now. In fact, you should compare interest rates and preapproval amounts from several lenders to make sure you're getting the absolute best terms when you buy your Ohio home.
Step 4: Choose the right location
Currently, the typical home value in Ohio is $216,746, but don't worry if that doesn't perfectly match your budget. Home prices vary dramatically from city to city and even from neighborhood to neighborhood!
Also, look at past home value trends. This will give you an idea of how much your home's value could go up over the next few years.
To give you an idea of how appreciation could impact what your house is worth in the future, consider these examples from three neighborhoods in Cleveland:
Home value appreciation in Cleveland
Step 5: Start house hunting in Ohio
Searching for homes in Ohio is the fun part of the home buying process! You'll get to look at a variety of homes and discover what you really want in a home.
Make a list of everything you want in a home and prioritize them. At the top of the list should be the items that are most important to you. This will help you separate your "must-haves" from your "nice-to-haves."
Your agent can help you understand if your wants are realistic for your budget and favorite neighborhoods or if you need to rethink what you're looking for.
Look at current housing inventory
The timing of your house hunt in Ohio can have a big impact on your number of options. For example, in Ohio, June has historically seen the most homes for sale. Searching in this season could give you more options and a greater likelihood of finding your dream home.
On the other hand, December gives you the fewest choices in Ohio. Historically, there are 50.0% fewer homes for sale than during Ohio's peak season.
Housing inventory in Ohio by season
New listings per month
Based on data from Realtor.com (September 2022)
Step 6: Make an offer
Once you find a Ohio house you love, it's time to make an offer. Your real estate agent will help you write a compelling offer that gives you the best shot of convincing the homeowner to sell to you.
Currently, in Ohio, homes stay on the market for 59 days before going under contract. However, every market goes through seasonal changes. During busier months, homes get snatched up more quickly than others.
Historically, Ohio homes sell fastest in July, where the average property is only on the market for 47 days. If your home search falls around this time, you should be prepared to move quickly and potentially make offers on several homes before yours is accepted.
On the other hand, if you buy in February, you have a bit more time to search. Homes typically stay on the market 20 days longer than Ohio's annual average.
Average time homes spend on market in Ohio
Based on data from Realtor.com (September 2022)
» LEARN MORE: What should an offer include?
Step 7: Inspections and appraisals
Inspections and appraisals are an opportunity for you to better evaluate the home's condition and value before officially purchasing it. You may have an opportunity after this step to renegotiate the terms of your contract with the seller if something unexpected pops up.
Home inspections in Ohio
Having your Ohio home inspected by a licensed inspector gives you peace of mind about the condition of the property before you commit thousands of dollars to purchase it.
Your inspector should check out the following parts of the property:
- Electrical system
- HVAC system
If the home has a septic system, you should also pay for a septic inspection to make sure it doesn't have any problems that wouldn't be covered in a typical home inspection.
Although Ohio law requires sellers to alert buyers of issues with a property, it's possible that the seller isn't aware of all the problems. This is why it's recommended to have a general home inspection and more specialized tests before closing on a house.
Here are a few important tests you might want to consider conducting:
- Radon testing: Radon levels in certain areas of Ohio can reach dangerous levels, so it's best to do a radon test if the seller hasn't done one in the past year. Ohio residents can get a free radon test kit by filling out a form here.
- Pest inspection: Some lenders require pest and termite inspections because these critters can often spread unnoticed. However, even if you're not required to have a pest inspector check a home, it's a good idea to catch potential infestations before they cause expensive damages.
Appraisals determine the value of the property. If you're using a mortgage to buy your new home, your lender will order an appraisal to make sure the home is worth the money that it's loaning you.
Step 8: Close on your new home!
To finalize your home purchase in Ohio, you'll have to meet at the title company on the closing date. Here, you'll complete the required paperwork and settle your closing costs.
Prepare to spend about an hour reviewing and signing several legal documents, including:
- Your final loan application
- The deed
- The mortgage promissory note
- The disclosure statements
Make sure to read each form carefully to ensure that the title transfer goes smoothly. If any information is incorrect or you don't understand something, consult with your agent before you sign.
After the paperwork is finished, you'll pay your closing costs to the title company. The title company will collect the total amount you owe and take care of distributing the funds to each recipient.
As a buyer, your closing costs can be divided into four categories:
- Lender fees: Fees paid to your lender for originating and underwriting your loan. These fees may also cover the appraisal and survey costs.
- Title and escrow charges: Fees paid to the title company for facilitating the closing and conducting the title search.
- Prepaid costs: Predictable costs of homeownership that are paid in advance. Lenders often require their borrowers to pay for specific expenses up front, such as their property taxes and homeowners insurance.
- Other closing costs: Miscellaneous expenses that differ for each buyer. Common miscellaneous expenses can include pest inspection fees, natural disaster certification fees, and real estate attorney fees.
Buyers in Ohio typically pay 3–5% of the purchase price in closing costs. For a $216,700 home — the typical home value in Ohio — that's between $6,501 and $10,835!
Frequently asked questions
In Ohio it's required for a real estate attorney to be part of every home sale. While your agent can make recommendations, remember you get to make the final decision. Interview lawyers before hiring them to make sure they have the experience you need.
- Save for down payment
- Get pre-approved for a mortgage
- Choose your preferred Ohio neighborhoods
- Partner with the right real estate agent in Ohio
- Go house hunting
- Make a strong offer
- Inspections and appraisals
- Do a final walkthrough and close
Yes, the OHFA homebuyer program offers 30-year, low interest loans and a few down payment assistance programs. For instance, OHFA’s YourChoice! Down Payment Assistanceprogram can offer a forgivable loan of up to 5% of the home's purchase price.
To qualify for the program, you must have a minimum credit score of 640 and meet the income and purchase price limits set for your county.
Federal Reserve. "Housing Market Tightness During COVID-19: Increased Demand or Reduced Supply?." Accessed October 11, 2022. Updated July 08, 2021.
Consumer Protection Financial Bureau. "The Fed is raising interest rates. What does that mean for borrowers and savers?." Accessed October 11, 2022. Updated March 17, 2022.