- Maintaining creditworthiness for your Indiana mortgage is the same as it would be in any state. When you apply for a loan, the lender wants to see that you represent a safe risk. To do this, the lender will look at your credit score. A credit score at or above 660 typically qualifies the borrower for a mortgage with a competitive interest rate. To maintain your credit score, pay all of your bills on time, pay down your existing debts systematically, avoid applying for new loans or credit cards while shopping for a mortgage and maintain a low debt-to-income ratio.
- If you cannot put down 20 percent or more on the value of your home as a down payment, you will have to pay a fee known as private mortgage insurance. This is a monthly fee added to your payment that covers the lender's risk for taking on a borrower who did not have a large down payment. One way to avoid this fee is to apply for a Rural Development Guaranteed Loan through the U.S. Department of Agriculture (USDA). USDA loans require no down payment and charge no mortgage insurance. To use this loan, the home you choose must fall within an eligible area, which typically means it is not in a city or suburban location. Because of the rural nature of Indiana, many communities fall within the rural development eligibility area.
- According to Bankrate, the average closing cost for a $200,000 mortgage in Indiana is close to $2,200. This is significantly less than the national average of more than $3,600. The state charges about half of the national average for title insurance, and points are less expensive in Indiana than in other states. Always shop around for a lender with affordable closing costs, because some fees, such as the fee to set up your escrow account, document preparation fee and loan origination fee, can vary significantly from lender to lender.
- The Indiana Housing and Community Development Authority (IHCDA) offers housing assistance programs for qualified buyers throughout the state. These programs are available to moderate to low-income homebuyers who need help with a down payment or repairs on a home they have chosen. The Market Stabilization Program gives qualified buyers up to $15,000 in assistance for purchasing a foreclosed home. The First Home program offers rates below market level for qualified buyers purchasing their first home, and down payment assistance of up to $7,500 is available for this program. The Mortgage Credit Certificate provides up to $2,000 per year in a tax rebate on the interest paid on your mortgage when you buy your first home.
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