Are you a first-time home buyer in Hamilton County, Indiana? The journey to homeownership can be exciting – and overwhelming!  

This guide is here to help you understand the process, from preparing your finances to closing the deal, with tips specific to the Hamilton County area. Let’s dive into what you need to know to make your first home purchase a smooth and successful experience.

Understand Your Budget as a First-Time Home Buyer

Before you start looking at homes, it’s important to know how much you want to spend as a first-time home buyer. 

Pre-Qualification

Start by meeting with a mortgage broker to find out how much you can afford. This initial step will give you a rough idea of your price range, based on information you provide about your finances. Prequalification can be a quick process, and you may get results within an hour.

Pre-Approval

Pre-approval means you’ve applied for a mortgage and received a commitment in writing from a lender for a loan amount. You don’t have to get pre-approved right away, but begin the process once you’re seriously looking. 

Sellers are more receptive to buyers who have been pre-approved because it shows that you’re serious. It can also help you stay competitive against other potential buyers who may be able to make a cash offer. 

Pre-approval takes more time (a few days) than pre-qualification and will also give you a better idea of the interest rate you’ll be charged. However, your preapproval will likely expire in three months or less. Consider the expiration, application fees, and your buyer readiness before investing in pre-approval.

Financing Your First Home

When you’re in your budgeting phase, be sure to consider alternative financing options for your new home. Indiana offers several programs to help a first-time home buyer with down payments and financing. 

First-Time Buyer Programs in Hamilton County

First-time buyers in Indiana have access to several loan programs designed to support the home-buying process.

First Place FHA Program (FP FHA): 

The First Place FHA Program offers up to 6% of the home’s purchase price in down payment assistance for buyers using FHA loans. Recipients must be first-time buyers, live in a qualifying area, meet income requirements, and have a credit score of at least 640. To apply, you will also need to work with a participating lender who can guide you through the process.

Next Home FHA Program (NH FHA)

The Next Home Program provides up to 3.5% of the home’s purchase price in down payment assistance for 30-year fixed-rate FHA loans. This assistance helps buyers meet various down payment requirements without the need to use substantial personal savings. 

Local First-Time Home Buyer Grands and Other Assistance Programs 

Beyond programs offered through the state, you may also be able to find financial support through your local community. Consult the Department of Housing and Urban Development (HUD)’s website for more information about the specific area you’ll be moving to. 

Other financing options might include: 

U.S. Department of Agriculture (USDA) Loans

These loans are for buyers specifically in rural areas and offer low rates and no down payment requirement, but the home must be in a qualifying area.

Department of Veterans Affairs (VA) Loans

Available to veterans, active-duty service members, and surviving spouses, VA loans offer lower interest rates and no down payment is required.

Conventional Loans

These loans are not backed by the government and typically require a higher credit score but can offer low interest rates and down payments as low as 3%.

Federal Housing Administration (FHA Loans) 

FHA loans are easier to qualify for than conventional loans and require a minimum down payment of 3.5%.

Plan for Additional Costs as a First-Time Home Buyer

Beyond the purchase price, there will be additional costs to consider. 

Closing costs can include loan origination fees, title searches, and homeowners’ insurance, which typically range from 2% to 5% of the purchase price. If your down payment is less than 20% of the home’s value, you may also be required to purchase Private Mortgage Insurance. 

Property taxes and homeowner’s insurance should also be considered. 

Below is a list of potentially surprising home-buying costs. Not all of these will apply to your specific situation, so do your research and ask questions to make sure you’re as informed as possible.  

• Closing or Escrow Fee
• Home Appraisal and Inspection
• Earnest Money
• Homeowners Insurance
• Homeowners Association (HOA) Fees
• Realtor Fees
• Attorney Fees
• Taxes
• Transfer Title and Deed
• Title Insurance 
• Private Mortgage Insurance

Make sure to budget for these expenses and plan accordingly to avoid any financial surprises as a first-time home buyer. Don’t forget – sometimes certain fees can be negotiated. 

Start the Search

Make a List of What You Want

Before you begin your home search, make a list of all your “must-haves” and “nice-to-haves.” 

“Must-haves” are non-negotiables, such as the number of bedrooms and bathrooms, proximity to work or schools, and accessibility features.

“Nice-to-haves” are features that would be nice to have but aren’t deal-breakers, like a pool, a large backyard, or a finished basement. 

While, of course, you’ll want to find a home that’s exactly what you want, it’s not always feasible. Having these lists will help you stay prioritized and focused on what matters to you most. 

Research Neighborhoods in Hamilton County

Choosing the right neighborhood can be crucial depending on your family and your needs. 

Consider factors like school districts, community amenities, and commute times. Hamilton County has many attractive neighborhoods. Research these areas, visit them in person, and get a feel for the community to ensure they match your lifestyle and needs.

Find a Real Estate Agent 

Once you have an idea of what you want and where you want to move, it’s time to find a real estate agent. 

Your real estate agent will provide invaluable guidance through the property search and will be able to share insider tips about the local market. Agents can also aid in narrowing down choices based on your specific criteria and negotiating terms with the seller.

Get Organized with Your Home Search

Keep all your home search materials in one place. 

Use detailed maps of your desired areas, maintain a list of properties you’ve visited, and take notes and photos to remember details about each home. This will help you compare properties and make an informed decision once you’re ready. 

Visualize and Assess Potential Homes Objectively

When viewing homes, try to visualize them without the current furnishings. 

Assess the layout, lighting, and overall condition objectively, considering things such as if the layout fits your needs and whether there is enough natural light. 

Stay Patient

You always want your home-buying process to be quick and easy. But sometimes, delays and hiccups happen. Stay patient and be prepared to problem-solve. Finding the right home is worth the wait (and the effort!), so keep your long-term goals in mind and don’t rush into a decision.

Make an Offer 

Once you’ve found the perfect home, it’s time to make an offer. 

Work with your real estate agent to review local sales data and determine a competitive offer price. Your agent will help you draft and submit your offer letter, including any contingencies and terms to ensure your interests are protected.

Conduct Thorough Inspections

A professional home inspection is a must. It can reveal potential issues that might not be obvious at first glance and allows you to request repairs or renegotiate the offer based on what you find. 

Attend the inspection, ask questions, and review the report carefully. If significant problems are found, you might need to negotiate repairs or reconsider the purchase. 

It’s also smart to request a second walk-through 24 hours prior to closing, just to ensure the changes that you have agreed on have been made. 

Close the Deal 

Closing the deal is the final step in the home-buying process. 

During this phase, you’ll review and sign all necessary legal documents, finalize your mortgage, and pay any remaining closing costs. Once everything is signed and settled, you’ll receive the keys to your new home and officially become a homeowner! 

Conclusion

Buying your first home in Hamilton County is an exciting journey. By following these tips for first-time home buyers and working with knowledgeable professionals, you can navigate the process with confidence. 

At The Brokerage Co, we are dedicated to helping first-time homebuyers make informed decisions to find their perfect home. Our team of experienced agents is here to guide you every step of the way. 

Reach out to us today to start your journey toward homeownership in Hamilton County!