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First-Time Homebuyers Guide For Indiana

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From house hunting to closing day, we've got you covered. 

Want to know how you can make the American dream of homeownership come true for your family? In this Indiana homebuyers guide, we break down the financial considerations and steps in the process.

At First Bank, we know that the Hoosier state is a wonderful place to call home. From the Indiana State Parks network to our state school districts, there are many resources to attract individuals and families. When you’re ready to start the mortgage application process, our knowledgeable mortgage team is here to make great things happen for you.

How much house can you afford?

The median home price in 2024 in Indiana is $221,600, according to Here in Southwest Indiana, median prices are lower than the state average:

  • Evansville: $173,900
  • Poseyville: $180,000
  • Princeton: $140,300

How much do I need for a down payment on a home in Indiana?

Determining the amount needed for a down payment is a crucial step in planning for a home purchase. It's essential to assess your financial situation, calculate costs, and understand various factors that influence your choice of home loan and borrowing capacity.

For a Fixed-Rate Conventional Mortgage, aim for a minimum of 20% down. If you put down less than 20%, you will be required to pay Private Mortgage Insurance (PMI) premiums monthly until your equity in the home reaches 20%.

For our FHA (Federal Housing Administration) Mortgage, you'll need a minimum 3.5% down payment and a minimum 620 credit score. This is a popular for first-time home buyers and those looking for a more accessible route to owning a home.
A VA (Veterans Affairs) Mortgage offers 100% financing, no PMI, plus a fixed rate and payment for the life of the loan for those who have served.

With a clear understanding of the various down payment requirements for different mortgage types, you're now better positioned to navigate your home-buying journey. At First Bank, we pride ourselves on offering a diverse range of mortgage programs, each designed to cater to the unique financial needs of our customers. Whether you're prepared for a 20% down payment or are exploring low down payment options, we have a mortgage plan that aligns with your financial circumstances. We encourage you to reach out to us with any questions or for guidance on which program is the right fit for you. Our team at First Bank is here to assist you every step of the way, ensuring you make the best decision for your homeownership dream.

Get a Mortgage Pre-approval in Indiana

Before beginning your property search, it's important to obtain a pre-approval letter from your lender, as many real estate agents require this. A pre-approval letter is an estimate, not a guarantee, of the maximum amount a lender is willing to loan you for your home purchase. This document is crucial as it helps you understand the price range of homes you can afford, although you might choose to borrow less than the maximum amount offered.

At First Bank, we encourage you to contact us to initiate the pre-approval process. Our team is ready to guide you through this important step, ensuring you have a clear understanding of your budget as you embark on your home-buying journey.

Estimate Your Monthly Mortgage Payment With Our Calculator

Once you have your down payment in hand and a price range in mind, you can start estimating your monthly mortgage payment. Use our monthly budget calculator to test out different combinations of loan amounts, interest rates, and loan terms. Remember to account for property taxes and home insurance premiums, which are usually paid through the monthly mortgage payment as well.

Should I Get A Home inspection?

While this is an optional expense, it’s one you don’t want to skip. A professional home inspector will provide a detailed report on the condition of your prospective home, from the roof to the furnace in the basement. You may be able to use the inspection report to negotiate a lower price, seller’s assist, or pre-closing repair.

The national average price for a home inspection is around $300. You can shop around by getting quotes from a few different companies. The total cost will depend on the size of the home and location.

How Much Are Closing Costs in Indiana?

Your lender will provide a final summary a few days before the scheduled closing, but you can estimate that closing costs will total about 1-2 percent of the sales price. This includes:

  • Lender Fees
  • Title Fees
  • Other prepaid costs

Ongoing Costs of Owning a Home

Buying a home is a significant investment, often the largest one you'll make in your life. Beyond the initial costs like the down payment and closing fees, owning a home brings continuous and future expenses. Here's an overview of what to expect:

Utilities: Moving into a bigger space usually means higher utility bills, especially during peak seasons like winter and summer when heating and cooling systems are heavily used.

Appliances: While you might not need replacements immediately, appliances like water heaters and refrigerators will eventually wear out. It's wise to start saving now for these inevitable expenses, avoiding the need for debt.
Yard Maintenance: Consider whether you'll handle lawn and hedge trimming yourself or hire someone. Don't forget to budget for occasional costs, like tree removal or stump grinding.

Essential Repairs: Homeownership involves various repair jobs, ranging from small to large. Whether it’s plumbing issues or fixing broken screens, setting aside a repair fund is a prudent move.

Decorating and Renovations: Personalizing your home is one of the joys of homeownership. Plan your budget for paint, furniture, and other decor items, and consider allocating a monthly amount to manage these expenses without overspending.

Your New Indiana Home Awaits: Connect with First Bank for Expert Mortgage Advice

Let our in-house Mortgage Team guide you through your home buying journey. With extensive knowledge and experience in the Indiana real estate market, they stand ready as your go-to resource. Before you begin your search for the perfect house, we encourage you to reach out to us for assistance in assessing what you can comfortably afford. Discover more, explore our helpful mortgage calculators, connect with our knowledgeable Mortgage Expert, or start your application process now. Make your home-buying experience smooth and informed with First Bank by your side.