Indiana Mortgage Rates

Just as nearly every other state in the nation, Indiana’s real estate market took a beating during the recession. This state is known for its diverse economy, offering a wide array of jobs to residents who live there. It has long been preferred for relocation by families with two working spouses because of this fact. Biofuel, hydro, solar, wind and geothermal energy are all major sources of the state’s revenue. Mining, agriculture and pharmaceuticals are also fields where a good portion of the people of Indiana are employed. The state also boasts two of the most prestigious universities – Notre Dame and Purdue. Thanks to new federal laws prohibiting predatory lending practices, buying a home is now much easier. Choosing to buy real estate in Indiana is a complex process and involves inside knowledge of the real estate procedures, laws and documents. This article will explain the many details that every consumer needs to know about buying real estate in Indiana.

Indiana Real Estate Prices

There are a few cities, such as Indianapolis, that are larger than most towns in Indiana. Because of the diversity in size and location of Indiana’s cities, the real estate prices always vary greatly. The overall most desirable places in respect to price in this state are the suburban areas near the larger cities. Real estate prices are less than they are in the large cities, but slightly higher than small towns. The average median home price in Indiana is about $90,000. This is a state-wide average. Most homes in the larger cities sell for this price average or higher. The national average hovers around $170,000, so Indiana’s average is half the nation’s average.

Best Places To Live In Indiana

As mentioned in the introduction to this article, Indiana is a prime location for those who work in fields related to alternative and traditional energy sources, among several other fields. Since the economy is diverse, business entrepreneurs also have a great chance of starting a new business in this state. With real estate prices being about half the national average or less, buying a home is a possibility for everyone, regardless of their budget. Right now, the real estate prices in the state are at all-time lows. With the recession being declared as over in 2009, the rates are expected to rise again in the next two years – this applies to both residential and commercial properties. The state welcomes many different cultures and nationalities; each city has a diverse mix of people, adding to the overall appeal of the state. To better illustrate how pricing varies by location and city size, read the following overviews of some of the best places to live in the state.

Carmel

This city was named the 14th best city to live in the U.S in Money Magazine. Home sales range between $80,000 and $170,000 recently. In addition to the lower than national average home prices, the schools received some of the highest ratings in the state and nation. Crime rates were much lower than national, state and even county averages for both crimes against personal property and violent crimes. Job prospects are good, with a wide array of opportunities in various fields. The ratio of job seekers to open jobs in this city is also lower than average in most cities, which means it takes less time to find a job.

Fishers

In 2008, Money Magazine rated Fishers as the 10th best place in the nation to live. Average home price sales there currently range between $98,000 and $190,000, making it overall less than the national average. Crime rates for violent crimes and those against personal property were lower than national, state and county averages by at least half in each bracket. Public schools for minor children were given an average rating of 5 stars by parents on a 5-star scale. In the 1960s, the town had about 350 residents and now boasts about 70,000. Due to the low crime, great schools, low real estate taxes, friendly community spirit, jobs and real estate values, the city continues to grow quickly.

Bloomington

Lush and green, Bloomington was named a tree city recently. There are plenty of diverse job opportunities in the city because of the many colleges. Indiana University is located there, along with their branches for the schools of Optometry and Law. An extension of Purdue University is also found in Bloomington. The Kelley School of Business and Kinsey Institute are two more schools located there. Crime rates are lower than state and national averages and schools for children have received high ratings from parents in satisfaction. Home values range between $56,000 and $280,000. There are plenty of options to purchase properties below, at or above the national average. Bloomington’s population is currently about 70,000 and this number is rising steadily.

Santa Claus

Santa Claus is a very unique city in Indiana. Every year, due to the Christmas-related name, the local post office receives a large quantity of letters to Santa. Volunteers in the city who established a “Santa’s Elves” group, ensure each child’s letter is graced with a reply. The friendly spirit of this city is one of the many reasons it continues to grow. Also the crime rates are lower by more than half on both national and state averages. Schools are highly-rated for providing quality education and a lower student-teacher ratio. The city’s economy is diverse, but also includes a good portion of revenue from the many holiday-themed amusement parks, fairs and a museum. Homes usually range between $50,000 to $200,000, with the overall average being $136,000, which is much less than the national average. The population of this small town is about 2,000 – and it is growing.

Types Of Mortgages In Indiana

Prospective real estate buyers in Indiana have plenty of options for mortgage types. The state encourages new businesses to start. Businesses that promise employment of Indiana residents also receive excellent tax breaks from the state. Home buyers will enjoy diverse choices among homes. As of current, according to real estate reports and charts, the Market Action Index implies that the cities in this state are nearly all considered a buyer’s market, meaning conditions of home buying are more favorable for buyers than sellers. Buyers also have the opportunity to choose a type of mortgage that best fits their needs. The following paragraphs will discuss the options available in Indiana.

VA Loan

These loans are offered to military veterans. The terms of the loan are highly favorable for buyers. They are offered to those who have performed their service and received honorable discharge or were enlisted at least two consecutive years during peace time before 1980. Financing is offered for 102.15% of the property value, with a limit of $417,000 in most areas. For a second mortgage, 20% is offered. There is also an allowance of up to $6,000 to make energy-efficient repairs and updates. The VA loan is offered in several different forms including:

  • Graduated Payment
  • Fixed Payment
  • Growing Equity
  • Adjustable Rate
  • Hybrid Adjustable Rate

FHA Loans

These loans are the most highly-desired type sought. There are very few restrictions placed on the buyer. People seeking homes in places that are less heavily populated and developing areas may have even better conditions on a loan. One disadvantage of these loans are the lower amount limits. It is possible to exceed the limit, but the buyer must produce the extra money at their own expense. However, they are still offered to people with mediocre credit ratings and past bankruptcies, so they are still one of the most desirable options.

USDA Loans

This loan is offered to those who choose to live in rural areas or on acreages in Indiana. The United States Department of Agriculture encourages ownership of farms, so the terms of the loan are friendly to the buyer. USDA loans are offered with up to 102% financing with no money down. The extra 2% in the loan is intended to cover closing costs. When financed out over many years, though, it is best to come up with the closing costs independently to lower the total amount spent during the life of the loan. There is also another feature of this loan that is friendly to home buyers – the Homestead Protection Act. When certain circumstances permit and the buyer is unable to make payments, they are able to convey the property to the USDA in the form of loan payments. With provisions from the Farm Bill, the buyer then may lease the home and up to 10 acres from the USDA within 30 days of acquisition.

Conventional Home Loans

There are many different types of these loans. They are the standard of loans that are offered by banks. Unlike the USDA, FHA and VA loans, there are no special requirements of being a veteran, living in rural areas or meeting narrower criteria. Buyers must have acceptable credit and a proven income to back the loans in order to qualify. The different choices of loans include:

  • Fixed Rate – this type of loan offers a fixed interest rate, meaning each monthly payment will be the same. The interest or monthly payment amounts will never increase or decrease, unless the property is refinanced later on. The life of this type of loan is usually 15-30 years.
  • Adjustable Rate – these loans will usually have a lower initial payment and interest rate. After a specific time period, the interest rate and monthly payment will be adjusted to current rates. Many buyers on a budget are wary of this type of loan, as payment amounts are never guaranteed and interest rates are unpredictable. They are intended for loans with a shorter life, such as 3-7 years.
  • Balloon Mortgage – this type of mortgage combines an element of the Fixed Rate mortgage; monthly payments are calculated by assuming a 30-year fixed rate. However, the life of the loan is much shorter, resulting in a large balance due at the end, or maturity, of the loan. This balance is called the balloon payment and is the final and most expensive payment. Because most buyers are unable to meet the demand for such a large amount in one sum, this type of loan is rarely chosen in Indiana.

Additional Real Estate Laws In Indiana

The foreclosure process in Indiana is judicial. The lender must file an action with the court and notify the buyer. After this, the proceedings continue and may last up to 12 months; sometimes it is complete in as little as 3 months. At the point of public sale, the buyer loses the right of redemption. Indiana is a full recourse state, allowing deficiency judgments, so delinquent buyers will have to produce the difference if the property sells for less than what is owed.

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