How to Get a Mortgage in Indiana

Are you ready to stop renting and start buying? The first step to purchasing a home is to get a home mortgage loan that fits your monthly budget. Here are a few things you should know about getting an Indiana home mortgage loan.

Instructions

Difficulty: Moderately Easy

1. Obtain a recent credit report and review it for any mistakes so it doesn't affect your home loan application. This will also help figure how much of a loan you will need.
2. Indiana has the "Indiana Predatory Lending Bill" that restricts certain lending practices deemed predatory (intentionally coercing consumers into contractual loans with unusually high payment terms and interest rates, often directed at uninformed borrowers or those with poor credit), and allows for punishment of businesses engaging in deceptive mortgage acts.
3. Call, visit, or interview several lenders from institutions like banks, credit unions, mortgage brokers (individuals and agencies that arrange financing from a variety of lenders) and online mortgage lenders. Try to get the best rate and terms possible.
4. Know that in Indiana, mortgage brokers are required to be licensed and carry a $25,000 surety bond, so seek proof of their license.
5. Stay away from Adjustable Rate Mortgages (ARM). ARMs move the interest rate risk from the lender and onto you. If interest rates rise so will your mortgage payment. If interest rates fall, your payment will stay the same or decrease slightly.
6. Think about getting homeownership assistance from Indiana or the federal government, and see if you qualify. There are programs in Indiana for rural home buyers, veterans, disabled, low-income buyers, single parents and senior citizens, such as the Indiana Housing and Community Development Authority Down Payment Assistance and the American Dream Down payment Initiative.
7. Attain pre-approval from your desired lender. They will require several documents like tax returns, proof of employment and any investment information among others.
8. Use the services of a local real estate agent, and find the home that fits your budget and needs.
9. Finalize your mortgage loan after committing to a lender, and put a formal offer on a home.
10. Complete your home transaction by paying all closing and legal fees. The lenders will be sending you your first payment information shortly.

Tips & Warnings

• Make sure you shop around for the lowest interest rates. Even one quarter of a percent can mean thousands of savings over a 30-year mortgage.
• Get your prospective home professionally inspected so as to discover problems that may exist before the deal is completed.
• Do not let a real estate agent pressure you to buy a specific home, they may have another agenda.
• Be sure that you understand the entire mortgage contract before you sign anything.
• Never pay a lender to fill out a loan application. No reputable lender engages in this practice.
• There are many unethical lending and loan scams in the US. Have an attorney review any documents before you sign them.
• Check to see that the home title is clear of liens before you purchase it.