Buying a Home in Indiana
Indiana is often called “The Crossroads of America,” and for good reason: the Hoosier State is the embodiment of the Midwest and one of the coolest places in the nation.
Indiana has a population of more than 6.5 million people. More than one in eight live in the capital city of Indianapolis, and one in five live state’s six biggest cities:
- Indianapolis (state capital)
- Fort Wayne
- South Bend
Buying a home in Indiana can be surprisingly inexpensive. Indiana ranks 44th in US homes for sale at average price, and 35th for homes over $1,000,000. Before you start attending open houses, it’s a good idea to get preapproved to learn your realistic budget parameters.
Programs administered by the Indiana Housing & Community Development Authority’s (IHCDA) are in place to help first-time homebuyers purchase homes in Indiana, and the most popular program offers down payment and closing costs assistance — two major pain points for FTHBs.
IHCDA First Place program provides an interest-free, payment-free, forgivable second mortgage of up to 6% of the home’s purchase price. As long as you stay on top of your responsibilities as a homeowner and live in the house for at least nine years, the loan will then be forgiven. If you sell or refinance before that time limit, you will have to repay the second mortgage.
Borrower requirements for the First Place program include:
- A 640 minimum credit score with a debt-to-income ratio below 45% OR
- A 680 minimum credit score with a debt-to-income ratio between 45% and 50% AND
- Income within IDCHA limits ( $72,300 to $120,820)
Refinancing in Indiana
Lower Indiana mortgage rates may tempt you to refinance your home in the state. You can do any of the following:
- Reduce costs over the loan term by lowering interest
- Reduce your monthly payment by extending the loan term
- Cash-out equity you’ve accumulated in your home
- Ditch a PMI (private mortgage insurance) requirement
A streamlined refinance could be an option if you have the right loan type. Ask your lender for more information.