Best Mortgage Lenders for First Time Home Buyers in Indiana

Are you on the hunt for your first home in the Hoosier State? Being a first-time home buyer in Indiana can be exciting, but finding the right mortgage lender is essential. So, how do you choose the best mortgage lender in Indiana? Benzinga has compiled a list to get you on the right track.

7 Best Mortgage Lenders in Indiana for First-Time Buyers

Here are 7 of the top lenders for first-time buyers in Indiana to help you get started.

1. Best for Self-Employed Borrowers: CrossCountry Mortgage

CrossCountry Mortgage makes it easy for all types of home buyers to get approved for a mortgage. Their flexible requirements can help you get financing, with no employment or income verification and no minimum DTI. CrossCountry Mortgage offers traditional loan terms, as well as more flexible mortgage payment plans with its 40-year loan program.

It’s also easier to get approved for a mortgage loan if you’re self-employed. Tax returns are not required and you’ll only need 1 year of self-employment income history and a minimum credit score of 580. CrossCountry Mortgage can also help you get approved on assets alone, like your bank statements, stocks and bonds, or retirement accounts. 

CrossCountry Mortgage is licensed to lend in California, Colorado, Connecticut, DC, Florida, Georgia, Illinois, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Virginia, and Washington.

2. Best for Bank Statement Loans: Angel Oak Mortgage Solutions

Angel Oak Mortgage Solutions is a full-service mortgage lender offering traditional and portfolio mortgage loans. Among their many customized loan solutions is their Bank Statement product for self-employed borrowers in Indiana. This loan does not require tax returns and includes a 1099 Income option for 1099 earners. 

• Loan amounts up to $3 million
• 12 or 24 months of personal or business bank statements
• Two years out of bankruptcy, short sale, foreclosure, or deed-in-lieu
• Owner-occupied, non-owner occupied, second homes
• 1099 option available
• 40-year fixed interest only
• Delayed financing available
• Non-warrantable condos allowed

Angel Oak Mortgage Solutions offers a wide range of loan options allowing you to obtain any mortgage as long as qualification requirements are met. You can also refinance into any of these loans after you get into the house and want to take advantage of an improving financial situation or increasing equity. The customer service team is easy to reach via email, phone or the online contact form, and you can begin your journey by searching for a local advisor right on the website.

Angel Oak is headquartered in Atlanta, Georgia and is licensed in AL, AZ #0927070, licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act, CO, CT, DE, DC, FL, GA #32379, ID, IL, IN, IA, KS, KY, LA, ME, MD, MI, MN, MS, NV, NH, licensed by the N.J. Department of Banking and Insurance, NM, NC, OH, OK, OR, PA, Rhode Island Licensed Lender, SC, TN, TX, UT, VT, VA, WA dba AOHL LLC, WI.

3. Best for Online Service: Rocket Mortgage

Rocket Mortgage is one of the top names in mortgage lending — and for good reason. Its streamlined application process makes it quick and easy to apply for a mortgage loan online. You can move at your own pace through the application process and have access to 24/7 customer service.

Loan types offered: Conventional, FHA, USDA and VA

Credit score requirement: 620

4. Best for Low-Income Buyers: Caliber Homes

If you need help with the upfront costs of buying a home in Indiana, Caliber Homes can help match you up with qualifying state financial assistance grants and programs. This lender is a great choice for first time home buyers because it offers educational tools and a streamlined online application process.

Loan types offered: Conventional, FHA and VA

Credit score requirement: 620

5. Best for Face-to-Face Service: Chase Bank Mortgage

Chase Mortgage offers both online and in-person mortgage application processes so you can get the help you need from a dedicated loan officer. Chase has a large variety of mortgage options to choose from and even offers rate discounts for existing bank members.

Loan types offered: Conventional, FHA, USDA and VA

Credit score requirement: 620

6. Best in Customer Service: SunTrust

Is customer service is at the top of your incentive list? SunTrust is one of the highest-rated lenders in the Hoosier state. This trusted lender has a variety of online customer service tools and can offer help in person by phone or via webchat. SunTrust also provides a fully Spanish version of its site and application.

Loan types offered: Conventional, FHA, USDA and VA

Credit score requirement: 620

7. Best for VA Loans: Veterans United

If you’ve logged some time in the military, Veterans United’s loans will likely be the best deal. Unlike other veteran-marketed loan programs, Veterans United only accepts active duty and veteran military members.

In addition to no-down-payment loans, you’ll also eliminate the private mortgage insurance you’ll have to pay with other mortgages.

Veterans United is also more forgiving of lower credit scores. Interest rates are lower than average.

The Housing Market in Indiana: An Overview

Knowing your state’s housing market like the back of your hand can help you predict home and mortgage prices.

Here’s a quick snapshot of the market in Indiana:

Total households: 2,336,306

Median list price: $169,888

3 most expensive cities in Indiana to buy a house:

• Carmel: $389,160
• Topeka: $354,025
• West Lafayette: $235,602

3 most affordable cities in Indiana to buy a house:

• Muncie: $82,482
• Richmond: $89,423
• New Castle: $105,428

These median home values can help you prepare for what you might pay on your home — depending on where it’s located.

Preparing for a Mortgage

There are many steps in the mortgage process. We’ll walk you through each one so you know how to get ready ahead of time.

First Time Home Buyer Mortgage Process in Indiana

Reviewing your finances is an important first step in the mortgage process. Determine what you can comfortably afford and also understand how lenders evaluate your finances.

Before applying for a mortgage, you should:

• Know how much down payment you can afford. Mortgage lenders determine your eligibility based on the down payment you can afford. Typically, the more you put down on a home, the lower your interest rate will be.
• Know your credit score. Mortgage lenders also have different credit score requirements and will look at yours to decide whether you’re a creditworthy borrower. Typically, the higher your score, the lower your interest rate will be.

Now that you’ve examined your finances, it’s time to look at the documentation you’ll need to apply for a mortgage loan. Gather these materials ahead of time to help speed up the application process.

You’ll need:

• Your Social Security number
• Tax information from the past 2 years
• Pay stubs from the past 2 months
• Checking, savings, retirement and other investment account information

You may also need additional documentation, depending on your lender’s requirements. 

Next, we’ll look at popular lender’s credit scores in Indiana so you can determine which lender’s requirements you’ll meet.

Mortgage Options

First time home buyers should know that there are different types of mortgages available to choose from. We’ll walk you through the top 5 types to help you determine which is right for your financial situation.

Conventional Loan

This home loan is funded by banks or credit unions. A conventional loan usually has higher interest rates than other loan types because they aren’t backed by the government. They also usually have low down payment options (starting at 3%) and often have more flexible qualification requirements.

FHA Loan

This home loan is funded through the Federal Housing Administration and it’s specifically for first time home buyers. An FHA loan usually has below-market mortgage rates, low down payment options (starting at 3.5%) and low credit score minimums (starting at 580). You can apply for an FHA loan through many conventional lenders.

USDA Loan

This home loan is funded through the U.S. Department of Agriculture (USDA) and is specifically for homes purchased in rural areas in Indiana. A USDA loan usually has below-market mortgage rates, no down payment requirements and low credit score minimums (starting at 640). You can apply for a USDA loan through many conventional lenders.

VA Loan

VA loans are funded through the U.S. Department of Veterans Affairs for former and active military personnel and their families. A VA loan usually has below-market mortgage rates, no down payment requirements and no credit score minimums (except when required by a lender). You can apply for a VA loan through many conventional lenders and through VA-only lenders.

Jumbo Loan

This home loan can be a conventional or FHA loan and is used to buy a home over $484,350. This limit could be higher, depending on the area of Indiana you purchase in. A jumbo loan usually has large down payment expectations (starting at 20%) and higher credit score requirements. Online lenders like Rocket Mortgage® only require a 10% down payment. First-time home buyers can also take advantage of down payment assistance programs.

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$0 Down VA Loans for Veterans & U.S. Military

Find out if you’re eligible today! Start the preapproval process online with Veterans United.

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First-Time Home Buyer Programs in Indiana

The Indiana Housing and Community Development Authority (IHCDA) offers a variety of programs that can help first-time home buyers like you afford a home. Here are a few key programs you can apply for.

• Indiana Home Solution (IHS): This mortgage program allows first-time home buyers in the Hoosier state to obtain an affordable mortgage. Down payment assistance up to 6% is also available. You’ll need a minimum credit score of 660 and must meet Indiana’s income limits to qualify.
• Helping to Own (H2O): This unique program allows first-time home buyers purchasing in select areas to receive up to 100% financing — no down payment is required. Borrowers who do not qualify for full financing can receive up to 3.5% in down payment assistance, which does not have to be repaid. You’ll need a minimum credit score of 600 to qualify.
• Next Home Advantage with MCC: This mortgage program allows first-time home buyers purchasing in select areas or qualified veterans to receive a low-rate mortgage and up to 3% in down payment assistance. Tax benefits are also included for qualified buyers.

Current Mortgage Rates in Indiana

A loan’s mortgage rate refers to the interest rate on the loan. If you can lock in a low mortgage rate, you could potentially save thousands of dollars in interest payments throughout your loan’s lifetime.

Your mortgage rate will be determined by your lender and it’s based on factors like your credit score, down payment, mortgage type, home location and your mortgage term.

Mortgage term refers to the duration of your mortgage. The 2 main types of mortgage terms are fixed and adjustable. Fixed mortgages have a fixed rate and your payment doesn’t change throughout the lifetime of your home loan. Adjustable-rate mortgages (ARMs) have a fixed rate and payment during an introductory period. Your rate will change based on the market.

Location plays a role in how high or low your mortgage rate can be. We’ve compiled a list of 3 common types of mortgage terms to get an idea of some current mortgage rates.

Closing a Mortgage

The very last phase in the mortgage process is closing. You finalize all your loan paperwork, pay any down payment or closing costs owed and review your mortgage terms. You’ll also do a final walk through your new home. Once everything is signed and paid, you’ll receive keys to your new home. 

The closing process can take between 30 – 45 days, depending on your mortgage lender. Online lenders like Quicken Loans® can typically reduce this timeframe.

Let’s look at a few typical closing time frames from popular lenders in Indiana.

Get Ready to Buy Your First Home in Indiana

Deciding how to finance your first home is a big decision — be sure to take as much time as you need to explore all of your options before committing to a mortgage lender. Figure out which loan incentives are most important to you, then partner with a lender that can help turn your financial dreams into a reality.

Frequently Asked Questions