When looking to purchase a home in Ohio for the first time, there are a number of things that you will need to know so that you can get a home that is most affordable for you. Anyone who is looking to purchase a home will want to consider a number of factors. These include the down payment, the interest rates, the loan amount and also the types of financing options available. By considering these things, you will be in better position to more easily buy a home as a first time home buyer.
Down Payment
The first thing that you will need to find out whenever you are looking to buy a home in Ohio is the down payment. In most cases, you will likely need to put 20% of the purchase price down. This means that you will need to pay 20% of the purchase price up front in cash. However, there are a number of options where you can put down as low as 3% of the home price. The down payment will help you lower your monthly mortgage payment as well as the overall mortgage loan amount. Therefore, it will be beneficial to put as much down as possible when looking to buy a home for the first time.
Interest Rates
Another thing that you will need to consider when purchasing a home is the interest rates. This is a percentage of the loan that you pay to the lender on top of the principal balance. The interest rate is essentially the profit margin of the financial institution on the loan. With all loans, interest rates will vary. However the interest rates in Ohio are within the national average. A 30 year fixed rate is 4.72% and a 15 year fixed rate mortgage is 4.04%. However, these interest rates are based on having a credit score of over 750. Therefore, the interest rates will vary depending on an individual borrower’s credit score. A higher score will result in a lower rate while a lower credit score will result in a higher interest rate.
Loan Amount
Whenever you are looking to get a Montgomery OH first home loan, the next thing you will need to evaluate is the total loan amount. Depending on the type of loan you are seeking, you can get certain amount of financing. One of the most popular loans available is the FHA loan. This is a government loan that allows you to get a considerable amount of money financed to purchase a home.
FHA lending limits vary depending on the type of home you are looking to purchase. Anytime you are looking to finance a home, you will also want to consider other loan options such as conventional home loans and Veterans Administration home loans. Each of these types of loans will usually offer you a certain amount of funds. In most cases, a typical loan amount will be between 80% and 97% of the purchase price.