Best Mortgage Lenders for First Time Home Buyers in Ohio

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Contributor, Benzinga
November 9, 2023

If you’re like most people, you’ll feel a ton of different emotions when you go through the home buying process for the first time. You might be thrilled at the idea of moving into a bigger space, excited at the prospect of building equity in your future and stressed at the idea of searching for the right home. You might also be confused about mortgages, mortgage types and lender choice — and that’s where we come in.

We will take a look at how you can make buying your first home in Ohio a little easier. We’ll show you what you’ll need to get a mortgage, how you can get a purchase quote and compare interest rates and even how you can save more money when you buy a home. We’ll also introduce you to some of our favorite lenders in the Buckeye State. 

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Best Mortgage Lenders for First Time Home Buyers in Ohio

6 Best Mortgage Lenders in Ohio for First Time Home Buyers

Now that we’ve gone over how to get a mortgage and what you’ll need to do before you apply, it’s time to choose a lender. Let’s take a look at some of the best mortgage companies offering loans in Ohio. 

1. Best for Bank Statement Loans: Angel Oak Mortgage Solutions

Angel Oak Mortgage Solutions is a full-service mortgage lender offering traditional and portfolio mortgage loans. Among their many customized loan solutions is their Bank Statement product for self-employed borrowers across Ohio. This loan does not require tax returns and includes a 1099 Income option for 1099 earners. 

  • Loan amounts up to $3 million
  • 12 or 24 months personal or business bank statements
  • Two years out of bankruptcy, short sale, foreclosure, or deed-in-lieu
  • Owner occupied, non-owner occupied, second homes
  • 1099 option available
  • 40-year fixed interest only
  • Delayed financing available
  • Non-warrantable condos allowed

Angel Oak Mortgage Solutions offers a wide range of loan options allowing you to obtain any home loan as long as qualification requirements are met. Ohio residents can also refinance into any of these loans. The customer service team is easy to reach via email, phone or the online contact form, and you can begin your journey by searching for a local advisor right on the website.

Angel Oak is headquartered in Atlanta, Georgia and is licensed in AL, AZ #0927070, licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act, CO, CT, DE, DC, FL, GA #32379, ID, IL, IN, IA, KS, KY, LA, ME, MD, MI, MN, MS, NV, NH, licensed by the N.J. Department of Banking and Insurance, NM, NC, OH, OK, OR, PA, Rhode Island Licensed Lender, SC, TN, TX, UT, VT, VA, WA dba AOHL LLC, WI.

Pros

  • Considers unique borrower situations
  • Quick loan approval process
  • Offers competitive interest rates

Cons

  • Stricter qualification requirements
  • Higher interest rates and fees 

2. Best for Online Loans: Rocket Mortgage®

Buying your first home can be a long, stressful process. Rocket Mortgage® has taken tons of steps to simplify the preapproval process by streamlining your application through its online app.

A product of Quicken Loans®, Rocket Mortgage® makes it exceptionally easy to view current mortgage rates, compare products and get a preapproval. Just answer a few simple questions on its app or online, enter information on your income and input your personal information to view your home loan options and see how much you can take out.

Rocket Mortgage® offers nearly every type of home loan you could need, ranging from jumbo loans to FHA loans for borrowers with low credit scores. Their simple process and comprehensive online education center make Rocket Mortgage® our first choice for first time homebuyers in Ohio.  

Pros

  • Apply online through their website
  • Faster loan processing times
  • Variety of mortgage options

Cons

  • Lack of personal interaction
  • Inability to negotiate terms

3. Best for Low Credit Score: Keller Mortgage

Do you have a low credit score? If you do, you might have trouble finding a home loan. Mortgage lenders typically require borrowers to have at least a 620 credit score to qualify for a conventional loan.

However, Keller Mortgage’s minimum credit score for a conventional loan is just 600. This can make it a great choice if your income is too high to qualify for an FHA loan but your score is still too low to qualify for a conventional loan with other providers.

Still working on increasing your income and repairing credit? Keller Mortgage also offers FHA loans to those who qualify. You might even be able to get up to $1,000 toward your closing costs with Keller Mortgage’s ZeroPlus loan program. 

Pros

  • No lender fees or origination costs
  • Competitive interest rates
  • Fast and streamlined application process

Cons

  • Limited availability in certain states
  • Limited loan options

4. Best for VA Loans: Veterans United

If you’re a current or former member of the armed forces and you’re considering a VA loan, make sure you check out Veterans United before you choose a lender. Veterans United specializes in everything related to VA loans — though they do offer conventional and other types of government-backed loans as well.

From helping you decide if you qualify to getting the paperwork you need to prove your service before you get your loan, Veterans United has a full team of former servicemen and women to help you navigate the home loan process. Their customer service team is also available 24/7 — so you’ll have support no matter when you need it. 

Pros

  • Streamlined loan application process
  • Competitive interest rates and loan terms
  • Excellent customer service

Cons

  • Funding fees
  • Limited physical locations

5. Best for Large Loan Selections: Flagstar

If you aren’t sure which type of mortgage loan is right for you yet, get a quote from Flagstar. Flagstar offers a variety of loan terms, every type of government loan and jumbo loans up to $3 million. You can quickly apply for a preapproval or get a refinance quote online through their site while also browsing all of your options and visiting their mortgage education center.

Flagstar even has customized mortgage options for professionals who just graduated from a highly specialized degree program — like law or medical school. With a wide range of mortgage options and some very unique customization options, Flagstar offers some of the best personalized mortgages in Ohio. 

Pros

  • A broad range of loans are available
  • You can obtain loans for construction or renovation
  • Brick-and-mortar locations are available
  • Quality information on the website

Cons

  • Applications may take some time to complete

6. Best for In-Person Service: Chase

Sometimes, the speed of an online mortgage preapproval isn’t worth giving up the face-to-face contact that comes with getting a mortgage the traditional way. If you’re the type of person who wants to get a mortgage loan in-person, consider a home mortgage loan from Chase. Chase has a large number of locations across Ohio — no matter where you live, chances are that you’re close to a Chase bank.

Chase’s team of Home Lending Advisors can help you select the best loan in-person at one of their branches, and they offer both conventional and government-backed loans. If you’d like to get started online, you also have the option of applying for a preapproval before you visit through Chase’s web-based prequalification system. 

Pros

  • Qualify to purchase a high-value primary or secondary residence
  • Low down payment requirements
  • Customizable sample rates
  • Excellent customer satisfaction

Cons

  • Must be prequalified before accessing a full online application
  • Higher-than-average origination fees

The Housing Market in Ohio: An Overview

Before we jump into mortgage loans and lenders, let’s take a closer look at the current housing market in Ohio. 

Total households: 4,445,773

Median list price: $160,000

3 most expensive cities in Ohio to buy:

  • The Village of Indian Hill
  • New Albany
  • Moreland Hills

3 most affordable cities in Ohio to buy:

  • Bellevue
  • Wapakoneta
  • Hubbard

Preparing for a Mortgage

The mortgage loan can be confusing for first time buyers. Here’s what you can expect when you start searching for a mortgage loan.

Step 1: Compare Loan Options

There are multiple types of mortgage loans. Each loan has its own requirements, and not every lender offers every loan type. We’ll take a closer look at the different types of mortgage loans in later sections.

Step 2: Compare Lenders

Once you decide on a type of mortgage loan, compare lenders in your area that offer your home loan of choice. Take a look at current interest rates and get to know each lender’s application process.

Step 3: Make Sure You Qualify

Every lender and loan type has different regulatory qualifications that determine who can and cannot get a loan. Some factors that influence which loans you can get include your credit score, income, where you live and how much debt you have. Check both your loan’s standards and your lender’s standards to make sure you qualify before moving forward.

Step 4: Gather Your Documentation

You’ll need to give your lender some financial information when you apply for a loan. The specific documents you’ll need will depend on your lender, but most require the following of your last:

  • 2 W-2s
  • 2 paystubs
  • 2 monthly bank statements

If you’re self-employed, you might need to provide more documentation.

Step 5: Apply for a Preapproval

Once you’ve got all of your documents, it’s time to apply for a home loan preapproval. Many lenders for first time buyers now allow you to apply for a loan online. Check your lender’s process and apply for your preapproval. Once you have your preapproval in hand, you can begin shopping for a home. 

There are many different lenders operating in Ohio, and each of their standards can vary widely. As an example, let’s take a look at how credit standards can vary by lender.  

Mortgage Options

Let’s take a look at the different types of mortgage loans that you can use as a first time buyer.

  • Conventional: Conventional mortgages are the most common type of mortgage loan. You can use a conventional loan to buy any type of property so long as you qualify. Conventional loans have higher credit and income requirements than other types of loans, but they also usually have lower interest rates.
  • FHA: FHA loans are government-backed loans for people who have a lower income or credit score. You can qualify for an FHA loan with a score as low as 500 points depending on your down payment. You must meet income standards before you can get an FHA loan.
  • USDA: USDA loans are government-backed loans for people who want to buy a home in a rural area. You must meet local income standards to qualify for a USDA loan and your home must be in an approved rural area. You can get a USDA loan with a 0% down payment.
  • VA: VA loans are government-backed loans for veterans, men and women who are serving and some qualifying spouses of servicemembers. You must meet service requirements before you can get a VA loan, and VA loans have 0% down payment requirements.
  • Jumbo: A jumbo loan is a large mortgage loan that exceeds the limits set by mortgage investing companies Fannie Mae and Freddie Mac. If you want to buy a very expensive property, you may have no choice but to get a jumbo loan. Jumbo loans have much higher income, credit and debt standards than other types of loans. 

First Time Home Buyer Programs in Ohio

As a first time homebuyer in Ohio, you may be able to secure a lower interest rate or assistance buying a home through a state or federal program. 

  • Ohio Housing Financing Agency (OHFA): OHFA is a state-run department offering a multitude of services and courses to low-income home buyers in Ohio. OHFA can help you buy a home with a lower mortgage rate after you complete a free online home buyer’s course, and they also offer assistance finding and securing government loans.
  • Grants for Grads: Have you graduated from an Ohio university or college in the last 48 months? If you have, you may qualify for up to 5% down payment assistance through the Grants for Grads program. You must meet minimum credit and income standards to qualify, and you must complete a free homebuyer’s education course before you can claim your grant.
  • Good Neighbor Next Door: If you work as a teacher, emergency medical technician, firefighter or law enforcement officer, you may be able to buy a home through the Good Neighbor Next Door program. Good Neighbor Next Door allows you to buy a select HUD-owned property for 50% off. These properties are foreclosure and most are exceptionally affordable — even before you apply your discount.  

Current Mortgage Rates in Ohio

When you take out a mortgage loan, you’ll pay interest on your principal balance. Interest goes to your lender in exchange for giving you a loan. Interest rates change frequently and can be influenced by everything from the bond market to the state of the housing economy as a whole.

Let’s take a look at some of the current interest rates for Ohio residents. We update our interest tables frequently to reflect the constantly-changing interest market. 

Loan TypeRateAPR
30-year fixed 6.371% 6.418%
15-year fixed 5.925% 6.087%
7/1 ARM (adjustable rate) N/A N/A
5/1 ARM (adjustable rate) 6.24% 7.572%
Rates based on an average home price of $150,374 and a down payment of 20%.
See more mortgage rates on Zillow

Closing a Mortgage

After you submit an offer to a seller and they accept, it’s time to move to close. The closing process involves a few different steps:  

Step 1: Get an Appraisal

An appraisal is a general estimate of the amount of money your new home is worth. Mortgage lenders require appraisals before you can get a loan because they can’t loan out more money than your home is worth. Your mortgage lender usually schedules your appraisal.

Step 2: Get a Home Inspection

An inspection is different than an appraisal. A home inspection tells you specifically what needs to be repaired or replaced in your home. Mortgage companies don’t require home inspections as a term to get a loan, but you should still get one before you close. Your real estate agent can assist you in scheduling a home inspection.

Step 3: Wait for Underwriting to Close

Underwriting is the process that mortgage lenders use to finalize your mortgage loan. Your lender looks at things like your financial documentation and credit report to make sure you qualify.

Step 4: Proceed to Closing

After your lender finalizes your home loan, you’ll attend a closing meeting. At closing, you’ll pay your closing costs and down payment, and then receive the title to your new home. After you walk away from the closing table, you’re officially a homeowner. 

The entire closing process can take anywhere from a few weeks to a few months depending on your lender. Let’s look at a few different times to close from different lending services. 

LenderAverage Days to Close Loan
US Bank44
Suntrust60
Rocket Mortgage®30
PennyMac 10
JPMorgan Chase21

Finding The Home of Your Dreams

When it comes to buying your first home, there’s no way to deny that knowledge is power. Be sure to take plenty of time to find the right real estate agent and compare all of your loan options before you commit to buying a home. Though getting a mortgage can be stressful, leaving yourself with time to fully understand all of your choices can help you sleep at night knowing that you’ve made the right decision. 

Frequently Asked Questions

Q

How do I get pre-approved?

A

First, you need to fill out an application and submit it to the lender of your choice. For the application you need 2 previous years of tax returns including your W-2’s, your pay stub for past month, 2 months worth of bank statements and the lender will run your credit report. Once the application is submitted and processed it takes anywhere from 2-7 days to be approved or denied. Check out our top lenders and lock in your rate today!

Q

How much interest will I pay?

A

Interest that you’ll pay is based on the interest rate that you received at the time of loan origination, how much you borrowed and the term of the loan. If you borrow $208,800 at 3.62% then over the course of a 30-year loan you will pay $133,793.14 in interest, assuming you make the monthly payment of $951.65. For a purchase mortgage rate get a quote here. If you are looking to refinance you can get started quickly here.

Q

How much should I save for a down payment?

A

Most lenders will recommend that you save at least 20% of the cost of the home for a down payment. It is wise to save at least 20% because the more you put down, the lower your monthly payment will be and ultimately you will save on interest costs as well. In the event that you are unable to save 20% there are several home buyer programs and assistance, especially for first time buyers. Check out the lenders that specialize in making the home buying experience a breeze.

Get Ready for Take Off

Rocket Mortgage® is an online mortgage experience developed by the firm formerly known as Quicken Loans®, America’s largest mortgage lender. Rocket Mortgage® makes it easy to get a mortgage — you just tell the company about yourself, your home, your finances and Rocket Mortgage® gives you real interest rates and numbers. You can use Rocket Mortgage® to get approved, ask questions about your mortgage, manage your payments and more.

You can work at your own pace and someone is always there to answer your questions — 24 hours a day, 7 days a week. Want a fast, convenient way to get a mortgage? Give Rocket Mortgage® a try.

About Sarah Horvath

Sarah is an expert in the insurance, investing for retirement and cryptocurrency space.