Residential Home Buying 101: A Comprehensive Guide to New Buyers in Central Ohio

Welcome to “Residential Home Buying 101: A Comprehensive Guide for New Buyers in Central Ohio.” This indispensable guide is designed to aid first-time and experienced home buyers alike as they navigate the often complex home-buying process.

We’ll provide you with comprehensive knowledge and resources so you can make informed decisions about getting into your new home, whether you’re buying a quick move-in home or building new. So, let’s jump right in. We know you’re eager to move into your dream home, and at Rockford Homes, we’re here to help.

Understanding the Ohio Real Estate Market

The Central Ohio real estate market is a vibrant, evolving landscape that offers a variety of opportunities for home buyers. Known for its urban development and a diverse selection of properties, Central Ohio is a great place for first-time buyers and experienced homeowners alike. Understanding the local market is a crucial step in the home-buying process.

Factors such as the average purchase price, typical closing costs, and the role of the Ohio Housing Finance Agency, which offers resources and support for buyers, are important to consider. Additionally, potential buyers should familiarize themselves with local housing laws to ensure equal housing opportunities.

Residential Home Buying 101: A Comprehensive Guide to New Buyers in Central Ohio

Market Trends (And Competition) Matter

To say the central Ohio residential real estate market is competitive would be an understatement; it’s a veritable battleground where buyers and sellers alike vie for the best deals, with demand often outstripping supply and properties selling at a rapid pace.
Current market trends greatly influence the home-buying experience. This includes fluctuations in mortgage rates, which directly impact your monthly mortgage payments, and changes in real estate values, which can affect the price of properties.

For instance, knowing whether it’s a buyer’s or a seller’s market can help you gauge your negotiation power. Moreover, understanding the popularity of different types of loans, such as FHA loans, conventional loans, or even VA loans – can help you decide the best financing option for your situation.

It’s also beneficial to be aware of the average time properties stay on the market and the comparable sales in your desired neighborhood.

Armed with this knowledge, you can make informed decisions, whether you’re aiming to buy a new home or an investment property. Most importantly, understanding these trends can guide first-time buyers and seasoned buyers alike to successful home purchases in Central Ohio.

Market Trends (And Competition) Matter

Identifying Your Needs

Identifying your housing needs is the first step in the home-buying process. Think about the home design and consider factors such as the number of bedrooms and bathrooms you need, desired square footage, and any special features you want in your new home.

For instance, if you have children or plan to start a family, consider the proximity to schools and parks. Similarly, if an elderly relative is a member of the household, you may want to ensure they don’t have to negotiate stairs, so a main floor bedroom and accessible bathroom are figured into your plans.

Other considerations might include the number of parking spaces you need, whether you want a backyard, and if you want a finished basement.

Identifying Your Needs

Floor Plans: Traditional vs. Open Concept

Think, as well, about the floorplan itself and what type is best suited to your lifestyle. Do you plan on doing a great deal of entertaining? If so, perhaps an open-concept floorplan with an island and a spacious living area is right for you. On the other hand, if you prefer dedicated rooms sectioned off from each other, a more traditional floorplan may be the way to go.

At Rockford Homes, we offer a wide range of single-family home designs. Our floor plans can be customized to suit nearly every family’s needs. Our new home designs include Two Story floorplans, First Floor Owner’s Suite floorplans, multi-level floorplans, ranch floorplans, and condo floorplans.

Floor Plans: Traditional vs. Open Concept

Budgeting and Financing Your New Home

Another step in the home-buying process is to establish your budget. This involves understanding the maximum purchase price you can afford and factoring in your monthly mortgage payment, property taxes, insurance, and any additional costs. A mortgage calculator can be an invaluable tool for determining these costs. 

As a general rule, most lenders require that your mortgage payment, including taxes and insurance, should not exceed 28% of your gross monthly income. Additionally, all your monthly payments, including credit cards and car loans, should not exceed 36% of your gross monthly income.

To use the Rockford Homes Mortgage Calculator, go to Financing Your New Home | Rockford Homes

Budgeting and Financing Your New Home

Understanding Your Financing Options

The most common financing options include loans and mortgages.

A mortgage is essentially a loan provided by a bank or another financial institution that assists a borrower in acquiring a home, with the property serving as collateral. Mortgages enable a home buyer to spread payments of the contract amount over a specific period instead of paying the entire balance upfront.
If the home buyer defaults on the mortgage, the property can be seized by the institution from which the mortgage was obtained.
Selecting the appropriate lender is a crucial decision, and securing a loan for a newly constructed home can differ from financing an existing one. If you’re uncertain about where to start, Rockford Homes’ Preferred Lenders could be a game-changer.

The Rockford Homes Preferred Lenders possess a demonstrated history of successful collaboration with us, and they bring invaluable insights into the homebuilding process and its requirements. Plus, they deliver the exceptional level of customer service that everyone deserves.

Understanding Your Financing Options

Which Loan is Right for You?

FHA (Federal Housing Administration)

Operated by HUD (The Department of Housing and Urban Development), the Federal Housing Administration provides FHA loans. These loans permit you to purchase a home with a down payment as low as 3.5%, and they also allow “gifts” from family members to be put towards the mortgage.

These features make FHA loans particularly appealing. All FHA loans come with an upfront mortgage insurance premium usually included in the mortgage. While there are no income restrictions for an FHA loan, loan limits based on counties do apply. For instance, Franklin and Delaware counties have an FHA maximum loan amount of $546,250 in 2024.

If you’re a first-time buyer, consider FHA loans which are specifically designed to help make your home purchase more affordable. Using a mortgage calculator can help you estimate your monthly payments and ensure they align with your budget.

Which Loan is Right for You?

Conventional Mortgage Loan

Government-sponsored agencies Fannie Mae and Freddie Mac establish the underwriting terms for conventional mortgages. These loans are quite popular, accounting for nearly 50% of the mortgage market. They generally appeal to home buyers with higher credit scores who can make a larger down payment.

A conventional mortgage can require as little as a 5% down payment unless you’re a first-time home buyer or haven’t owned a home in the past 3 years, in which case, the required down payment can go down to 3%. With a conventional loan, it’s possible to avoid monthly PMI (private mortgage insurance), though it’s typically required in some form with less than 20% down.
The maximum loan limit for a conventional/conforming loan in our area is $766,550. Our preferred lenders can also offer you other mortgage options to avoid PMI.

Conventional Mortgage Loan

VA (Veterans Administration)

If you’re a veteran of the U.S. military, a VA loan might be the ideal loan for you! The underwriting guidelines for these loans are established by the Veterans Administration.

VA loans offer benefits like purchasing a home with no down payment and no monthly PMI. They also have less stringent credit guidelines. The Veterans Administration insures all VA loans. Most VA loans come with a funding fee, generally included in the mortgage, unless you’re a disabled veteran, in which case you’re likely exempt from the funding fee.

VA (Veterans Administration)

Pre-Approval

Now let’s talk about pre-approval in the home-buying process.

Getting pre-approved means a lender has reviewed your financial information and can tell you how much you can borrow. This is a crucial step in the buying process as it sets a realistic budget and shows sellers you’re serious about buying.

Most people find it beneficial to get pre-approved before starting the house search. At Rockford Homes, we work with a select group of preferred lenders who streamline the process by performing pre-approval for our customers.

Pre-approval can also give you all the answers you need when coming up with a budget for your new home. It can factor in potential closing costs and help you understand the impact of your mortgage payment on your monthly budget. Moreover, it can guide you when considering comparable sales in the neighborhood you’re eyeing, ensuring you’re paying a fair price for your property.

Pre-Approval

Working with Real Estate Agents

What is the role of real estate agents in the home-buying process?

Real estate agents play a pivotal role in the house-hunting process. They act as intermediaries between the buyer and the seller, ensuring that both parties’ interests are protected and the transaction is completed successfully.

For a first-time home buyer, an agent provides guidance during the entire purchasing process, from the initial house search to the closing. Agents have in-depth knowledge about price trends and neighborhood specifics and can help negotiate the best price for the house.

They also assist in coordinating a professional inspection to ensure the house is in good condition, which makes the home inspection part of the process less stressful for the buyer.

Moreover, real estate agents are well-versed in the paperwork involved in a home purchase. They can help you understand complex documents and ensure that all legal requirements are met. In essence, they provide a comprehensive service to make the process of buying a home as smooth as possible, allowing you to focus on moving tips and settling into your first home.

Working with Real Estate Agents

How to Choose a Real Estate Agent

When it comes to choosing a real estate agent, start by seeking recommendations from family or friends who recently purchased a house. Once you have a few names, research each agent’s reputation, experience, and area of expertise. It’s crucial to choose an agent who specializes in the location you’re interested in, as they will have the most relevant knowledge and contacts.

Next, meet with those potential agents to discuss your needs and expectations. Pay attention to their professionalism, responsiveness, and understanding of your situation, especially if you’re a first-time home buyer. An excellent agent will listen to your needs, provide useful tips, guide you through the purchasing process, and help you find a lender that suits your financial situation.

A professional agent typically has an extensive network of other professionals and can connect home buyers with a home inspector, contractor, plumber, real estate attorney, lender, and more.

Remember, the agent you choose will be your advocate and guide throughout the home-buying journey, so it’s essential to select someone you trust and feel comfortable with.

How to Choose a Real Estate Agent

The Benefits of Working with Rockford Homes’ Expert Team

Working with Rockford Homes’ expert team offers numerous advantages. Our team is made up of experienced real estate professionals who understand the nuances of the market and are dedicated to helping you achieve your home-buying goals. We excel in providing personalized services that cater to your unique needs, whether you’re a first-time home buyer or looking to upgrade to a larger property.

The Rockford Homes team understands the importance of location and can provide valuable insights into different neighborhoods where Rockford has developed luxury communities. We can also offer guidance on crucial aspects such as your home design and layout, home inspection, moving tips, and closing procedures, making the entire process seamless for you.

When you choose to work with Rockford Homes, you’re not just getting an agent; you’re gaining a partner committed to supporting you in every step of your home-buying journey, whether you’re looking to build new or want a move-in ready luxury home. Reach out and contact our team today to experience the Rockford Homes difference.

The Benefits of Working with Rockford Homes’ Expert Team

Closing the Deal

The closing process, also known as settlement, is the final step in the home-buying process. It involves several steps, starting with a home inspection and appraisal to ensure the property’s condition and value.

Once these are complete and the mortgage is approved, a closing date is set. On the closing day, all parties involved meet to sign the final paperwork, exchange funds, and officially transfer ownership of the property.

Before closing, your lender will send you a closing disclosure detailing your loan terms, final closing costs, and any outstanding charges or fees. It’s crucial to review this document carefully and compare it with your original loan estimate.

At the closing meeting, you’ll sign legal documents, including the mortgage note and the deed of trust. Once all documents are signed and funds are disbursed, you’ll receive the keys to your new home.

Closing the Deal

Let Rockford Homes Facilitate the Smooth Transaction into Your New Dream Home

At Rockford Homes, our goal is to ensure a smooth and seamless transaction for our clients. From the moment you find the home you’re looking for to the final closing, our experienced team is there to guide you every step of the way when you purchase one of our outstanding quality-crafted homes.

Our team understands that buying a home is one of the biggest decisions you’ll ever make, and we strive to make the process as stress-free as possible. We answer questions, provide updates, and handle any issues that arise.

Rockford Homes is committed to delivering an outstanding and superior home-buying experience. We don’t just facilitate transactions; we build relationships, ensuring every client feels supported and confident in their home purchase.

Let Rockford Homes Facilitate the Smooth Transaction into Your New Dream Home

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Stephanie Ferner

Stephanie is here to help with your New Home search!
Text us at (614) 604-6373