Indiana isn’t just naturally beautiful, although this is one of the primary reasons many Americans call it a home and why it continues to garner tourists. It also has an amazing and diverse culture, paired with a great education system. To name a few of its top-ranking cities are Indianapolis (its capital), South Bend, and Fort Wayne. Add to this the stable economy driven by the powerful agriculture and manufacturing industries, and it’s easy to see what attracts home buyers and property investors to it. (Source: Livability.com)
Indiana also has quite the low cost of living, further making it an ideal place to live and start a family in. (Source: Sperling’s Best Places)
How Much Homes in the State Cost
In The Hoosier State, real estate costs less than many other parts of the country. For instance, its median home value is $119,500, as opposed to the countrywide median of $195,300. (Source: Zillow)
It’s also worthy to note that single-family homes, which make up 92.30% of the housing market, fetch an average value of only $81,990.12. Condominiums, with a market share of 3.50%, have an average value of $126,112.67; PUD homes (2.70%) at $96,226.12; and townhomes (1.50%) at $98,663.03.
Differentiating Fixed- and Adjustable-Rate Mortgages
There are two primary types of mortgages IN home buyers can choose from: the fixed-rate and the variable-rate (or adjustable-rate) mortgages. It’s important to understand the basics of how each one works, as they are the biggest determiners of the overall cost of housing loans.
Borrowers who want to have the least risk may find a fixed-rate mortgage the best option. With this, the interest rate the lender applied on the first monthly payment will remain the same throughout the entire term of the loan. Regardless of how poorly the market may perform within, say for example, the next 30 years (for a 30-year fixed-rate mortgage), those who have this kind of loan will have relatively unchanged monthly payments.
There are still a lot of people who opt for an adjustable-rate mortgage (ARM) though. Primarily drawn to ARMs because of their lower initial interest rates, home buyers who take out this type of housing loan often don’t intend to stay in the same house for more than a decade. Some also choose this over the fixed-rate kind because they have the finances to repay their entire debt before the teaser rate ends.
Getting Assistance for Mortgage Concerns
Many different government entities provide much-needed aid to those having difficulties securing a mortgage. Some even assist existing borrowers at risk of missing payments or even in danger of foreclosing.
One of these is “Helping to Own” (H2O), a program that offers buyers the chance to receive a down payment grant together with 100% financing on their first, outside-of-target-area home. There is also the “Mortgage Credit Certificate” (MCC), which provides federal tax benefits for qualified first-time homebuyers. The “Next Home” program, which even non first-timers can apply for, can help with down payment requirements.
Reducing Odds of Having to Get Mortgage Insurance
Those new to the world of mortgages will encounter the term “mortgage insurance” a lot. Basically, lenders require their borrowers to purchase this as a way of protecting themselves in the event that the home buyer defaults on the loan. Not everyone needs to spend a considerable amount of money on this insurance product though.
One of the best ways to avoid the need for this is to meet the necessary down payment. In most cases, this is equivalent to 20% of the property’s buying price. For example, to close the deal on a house that costs $100,000, the seller may require a 20% down payment amounting to $20,000. Although some lenders require a smaller amount, it still pays to save up more, so that there are less financial responsibilities to think of.
Indiana Housing and Community Development Authority: http://www.in.gov/ihcda/
First Time Homebuyer Down Payment Assistance Program: http://www.in.gov/ihcda/2421.htm
Mortgage Credit Certificate: https://www.in.gov/myihcda/files/MCC_PROGRAM_GUIDE_2016_.pdf