Compare Current Mortgage Rates in Ohio

You’ll notice during the home-buying process that different lenders may offer you different mortgage rates within a similar percentage range. That’s because many lenders determine their mortgage rates in Ohio by using the same key components: market and personal factors.

Personal factors are based on the borrower, such as your credit score, down payment, and loan type. For example, if you have an excellent credit score and can afford a large down payment, you may get a lower mortgage rate than someone who has a fair credit score and minimal down payment funds.

Market factors also influence the rates, but these factors are largely uncontrollable. Lenders look to both national and local trends to set rates. For instance, while the Federal Reserve doesn’t set mortgage rates, it does set the rate at which banks make short-term loans to other banks. This can influence how a bank sets its rates to compensate for the borrowing cost. 

Lenders may also look at other market conditions like inflation rates. More localized factors may include the economic conditions, housing market, and buyer demand in the area. With so many factors at play, it’s a good idea to speak to multiple lenders about their average rates so you can get a sense of the current range available when you’re applying for the loan. 

Yes, Ohio has a first-time homebuyer program offered through the Ohio Housing Finance Agency (OHFA). This government organization offers a variety of options for diverse homebuyers, including:

• OHFA Homebuyer Program: This program helps first-time homebuyers find a 30-year, fixed-rate loan from an OHFA-approved lender. The OHFA specifically helps borrowers with low-to-moderate income secure conventional, FHA, VA, and USDA loans.
• Down payment assistance: Borrowers beneath a certain income threshold may qualify for down payment assistance of either 2.5% or 5%. The amount can be forgiven in seven years if the borrower does not sell their home.
• Grants for Grads: Recent college graduates may qualify for down payment assistance of 2.5% or 5%, and that grant is forgiven if they remain a resident of the state for five years.
• Ohio Heroes: Select public service professionals such as teachers, health care workers, and emergency response personnel may qualify for a discounted mortgage interest rate. 

OHFA also offers other support that may benefit first-time homebuyers now or in the near future, including:

• Mortgage tax credit: Borrowers using the OHFA Homebuyer Program can receive a 40% tax credit on the home mortgage interest. 
• Next Home: While the Next Home program isn’t for first-time homebuyers, it might be useful for buyers who are planning a second home purchase. Next Home offers 30-year, fixed-rate mortgages on VA, FHA, USDA, and conventional loans. Borrowers must meet income, debt-to-income ratio (DTI), and credit score limits, as well as move into the house within 60 days of closing and make it their primary residence. 

Mortgage rates will fluctuate from year to year, but you shouldn’t be discouraged if you’re trying to purchase your first home when mortgage rates are high. There are multiple ways that you can proactively either find or make yourself eligible for the lowest rates available. Consider these tips before starting your home search: 

• Check your credit report and remove any errors.
• Improve your credit score by paying bills on time and paying down your debt. 
• Save for a larger down payment, as much as 20%, to potentially avoid paying private mortgage insurance.
• Do not take out other loans, apply for new credit cards, or make large purchases on your credit cards within the months leading up to your loan application filing.
• Shop around to learn about different lenders, including traditional lenders like banks and online lenders.
• Compare loans from several lenders to see who has fewer fees, better terms, and more flexible qualifications.
• Compare different loan types to see which ones you’re qualified to apply for.
• Negotiate with lenders to see if they can beat another lender’s rates or terms.
• Get pre-approved before you make an offer on a home.
• Consider adding a cosigner to your loan to get approved for the amount you need at a potentially lower interest rate.
• Determine your budget range for a mortgage before you start your house search.

Purchasing property in Ohio doesn’t require one specific type of mortgage. There are many different home loans that borrowers can qualify for, some with better incentives than others. For example, a first-time homebuyer who is a veteran might benefit more from a special loan program than from conventional loan programs. 

Conventional

• Description: A loan that is offered through a private lender, like a bank or credit union, that’s not part of a specific government program.
• Qualifications: Borrowers typically need good credit and meet a minimum down payment amount.
• Terms: Varies.
• Pros: As little as 3% down payment accepted.
• Cons: Lenders may have stricter requirements.

FHA loan

• Description: A loan made through a private financer like a bank but insured by the Federal Housing Administration (FHA).
• Qualifications: Must meet the qualifications of a lender approved by the U.S. Department of Housing and Urban Development (HUD).
• Terms: Max 30 years.
• Pros: Low down payments, low closing costs, easy to qualify with less-than-ideal credit.
• Cons: May be charged additional fees, not all homebuyers will qualify.

VA loan

• Description: Similar to an FHA loan, VA loans are offered through banks with a portion guaranteed by the U.S. Department of Veterans Affairs.
• Qualifications: Must be a qualified veteran, service member, or eligible surviving spouse.
• Terms: Varies.
• Pros: May secure more favorable terms from the lender.
• Cons: Limited only to service members, veterans, and surviving spouses.

USDA loan

• Description: These loans are designed for low- and very-low-income borrowers who want to secure a loan for a home in a designated rural area.
• Qualifications: Borrowers must be without sufficient housing, fail to secure a loan from other lenders, and live in the purchased home as a primary residence.
• Terms: Typically 33 years; very-low-income borrowers may qualify for 38 years.
• Pros: No down payment required, fixed interest rates as low as 1%.
• Cons: Must meet the adjusted income level in the area where they’re purchasing the home.

Jumbo loan

• Description: A type of loan for amounts over $766,550 in certain counties.
• Qualifications: Only for a loan amount over the conventional limit and under the maximum limit allowed by the government.
• Terms: Varies.
• Pros: Secure a loan for a more expensive property.
• Cons: Typically need a high down payment and good credit to qualify.