Your Next Home Program from Indiana Housing

Indiana Housing has been instrumental in providing no downpayment loan programs for first time home buyers. They now offer a loan program for home buyers who are moving up or buying their next home, aptly named the “Next Home” program. Many home sellers today are faced with breaking even after the sell of their home and do not have the additional funds to put a down payment on their next home. The new program from Indiana Housing offers up to 4% toward down payment and closing costs. So a home buyer can buy their next home with no money down. Highlights of the program: 4% given to home buyer (borrower) to be used toward down payment, closing costs or pre-paids. Seller can contribute up to 6% toward buyers closing costs and pre-paids. Income limits are higher No acquisition or purchase price limit No third party inspections No home buyer counseling classes Guidelines of the program: Minimum 650 credit score FHA loans only Income limits 0.125%  of loan amount upfront fee payable to Indiana Housing There are quite a few differences between the first time home buyer program and the Next Home program. The most significant are the income and repayment...

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Mortgage Approval is NOT Set in Stone

You’ve found the Indianapolis home you want to buy and have been approved for a mortgage. Congratulations! You are on your way to being a homeowner. Now that you have approval, make sure you don’t do anything to sabotage it. Because there may be 60 days between the application date and the closing date, it’s important for applicants to remember that mortgage approvals can be revoked at any time prior to funding. There may be last minute verification of employment or an updated credit report run before final approval. As mortgage applicants, there are many events that are out of your control — job security and health matters, for example.  But there are also events that are within your control. Knowing that mortgage approvals can be fragile, here are 8 things you should absolutely not do while your home loan is in process.  It may be the difference between being approved by the bank, and being turned down. Don’t buy a new car or trade-up to a bigger lease. Don’t quit your job to change industries Don’t switch from a salaried job to a heavily-commissioned job Don’t transfer large sums of money between bank accounts Don’t forget to pay your bills —...

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The Right Way To Take A Cash Gift For Downpayment

As lenders tighten mortgage guidelines for Indianapolis home buyers, minimum downpayment requirements are increasing.  Several years ago, you could finance a home with nothing down. Today, most conventional mortgages require at least 10 percent. Anecdotally, guideline changes have led to an increase in the number of home buyers accepting cash gifts from family. Gifts are allowed in most cases but the problem is, if you don’t accept the gift in a “lender-friendly” way, the mortgage underwriter could reject it, and negate it. You can’t just deposit a cash gift into your bank account. You have to follow a series of steps and keep records. Provide an acceptable gift letter signed by all parties Provide documentation of the gifter’s withdrawal of funds via teller receipts Provide documentation of the giftee’s deposit of funds via teller receipts Lenders require these 3 steps for two basic reasons.  First, they want to make sure that the cash gift is “clean” (i.e. not laundered).  Second, they want to make sure the gift is really a gift and not a loan-in-disguise. It’s why lenders typically require that the loan application be accompanied by a signed, dated letter. For example: I am the [relationship to recipient] of [name of recipient]...

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Mortgage Approvals Are Getting More And More Scarce

The economy's improving but lending standards are not. Nationally, banks are making mortgage approvals harder to come by. Underwriting guidelines are tightening.

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Separating FHA Fact From Fiction : Mortgage Insurance Premiums

Because of how frequently bank rules are changing, it can be hard for laypersons to distinguish between mortgage fact and fiction of what's coming next. Recently, we saw this with respect to FHA home loans.

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