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(Columbus) – For many individuals, buying a home is the largest purchase they will make in their lifetime. In fact, in March 2024, Ohio Realtors reported there were over 10,700 home sales across the state, with the average sale price exceeding $275,000.
To help Ohioans successfully navigate the homebuying process, the Ohio Department of Commerce Divisions of Financial Institutions (DFI) and Real Estate and Professional Licensing (REPL) have teamed up to provide important information on this topic, including how best to secure a mortgage. Representatives from both divisions appeared on a recent episode of the “Protecting What Matters” podcast by the Ohio Department of Commerce to discuss various topics regarding mortgages and the homebuying process. That podcast is available here.
DFI Deputy Superintendent Pamela Prude-Smithers says a critical step for prospective homebuyers to take is to obtain a free credit report. By reviewing a credit report ahead of time, prospective homebuyers are able to correct potential inaccuracies and address questionable items in the report so they can improve their eligibility for favorable loan rates and amounts.
“We urge homebuyers to approach the selection of a mortgage lender with due diligence,” Prude-Smithers said. “Engaging with at least three different lenders allows for a comparative perspective, reinforcing the importance of selecting a provider that aligns with the buyer’s financial and personal comfort.”
With 80% of recent buyers financing their home purchase according to the National Association of Realtors, choosing the right mortgage lender, particularly amidst fluctuating mortgage rates, is an important aspect of the homebuying experience. Prude-Smithers says it is important for prospective homebuyers to get preapproved for a loan before starting their search for a home. This step not only can clarify what type of home someone can afford, but also what type of interest rate they might be able to secure.
Prospective homebuyers also are encouraged to consider the below tips to ensure they not only select the right lender, but that they also protect themselves.
· Do Your Research: Gather detailed information on income assets, and desired down payment in advance of lender meetings.
· Build a Relationship: Choose a lender who provides clear, comprehensive answers without rushing the process.
· Reputation Matters: Prospective homebuyers should start their search by considering companies or lenders that have strong, positive reputations. Seek personal referrals from friends and family, check online reviews and consult the Better Business Bureau.
· Utilize the NMLS: The Nationwide Multi-State Licensing System (NMLS) offers comprehensive details on a company’s license status and any past regulatory actions, serving as a critical resource for vetting potential lenders.
· Research and Compare: Not all mortgage lenders offer the same loan products or rates. Prospective homebuyers should explore multiple options and compare interest rates, fees, and the types of loans offered in order to find the best fit.
· Be on the Lookout for Red Flags: Look for red flags such as large upfront fees, a significant number of negative online reviews, and discrepancies on official websites, including mismatched NMLS numbers and unlicensed loan originators.
Additional information related to selecting a mortgage and lender is available at com.ohio.gov/Mortgage.
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