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This next life stage is all about nurturing what you've built so far. By now you have likely started building a nest egg, maybe you've built or purchased your first home and even started a family. Nurturing your goals and dreams takes patience and sometimes sacrifice, but the financial security it brings down the road is invaluable. Spend some time reviewing these calculators and other tools to help you through this second stage of your financial journey.
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 from house hunting to closing day.
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 Indiana is $142,600, according to BestPlaces.net. Here in Southwest Indiana, median prices are lower than the state average:
First, you will need to calculate costs and other factors to consider before buying a home. That
will determine what type of home loan you select and the maximum amount you can borrow.
Now that you understand the range of potential down payments, consider how much you already have saved for a down payment. Are you ready to put 20 percent down or do you need more time to grow your savings?
Many real estate agents will ask for a pre-approval letter before they start showing you properties. This document comes from your lender and provides an estimate (not a promise) of the maximum amount they’re willing to loan you. Pre-approval letters
can help you figure out how much home you can afford, though you may want to borrow less than the maximum.
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.
In addition to a down payment, there are two other primary costs associated with buying a home.
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.
When you close on your home, you’ll need to bring a cashier’s check for the costs associated with the transaction. If the costs are over $10,000, the state of Indiana requires that the funds be wired. 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:
Buying a home is likely the biggest purchase you’ll ever make. After saving a down payment and closing costs, and holding the keys to your house in your hand for the first time, you still need to save for ongoing and future expenses. Here’s what to expect:
Our Indiana-based Mortgage Loan Specialists are here to make your home buying experience as smooth as possible. With all of their knowledge and experience in the Indiana real estate market, they are an excellent resource. Don’t hesitate to ask for
help in determining what you can afford before you start house-hunting. Visit our Mortgage Loans page
to learn more, speak with a lender, or apply now.
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