Prepare for your home-buying journey and secure your dream property
with these streamlined, step-by-step first-time home buyer guides.
Buying your first home is an exciting milestone, but it’s completely normal to feel a bit overwhelmed by the process. The good news? Indiana is a fantastic place to start. With a median home price of $280,055 — well below the national average of $398,771 — the state offers plenty of accessible opportunities. This guide is designed to cut through the noise, offering clear, actionable steps to help you navigate your path to homeownership with confidence.
You might assume that being a first-time homebuyer strictly means you’ve never owned a property before. While that’s one way to qualify, the definition is actually a bit broader.
According to the U.S. Department of Housing and Urban Development (HUD), you generally qualify as a first-time homebuyer if you haven’t owned a primary residence in the last three years. You may also qualify if:
If you fall into any of these categories, you may be eligible for various state and federal programs designed to help you secure the right home loan for your situation.
You don’t have to navigate the path to homeownership alone. Indiana offers several state and local incentives designed to make buying your first home more affordable, often by helping you manage upfront costs like down payments.
The Indiana Housing and Community Development Authority (IHCDA) is a key resource for prospective buyers. They provide various programs to encourage homeownership, including the First Step Program. This offers down payment assistance in the form of a second mortgage. Because this is a nonforgivable loan, keep in mind that you will repay the assistance when you sell your home or reach the end of your loan term.
Depending on where you plan to settle, you may find additional support through city-specific programs. For example, the Housing and Neighborhood Development’s Down Payment and Closing Cost Assistance program in Bloomington provides up to $10,000 for qualifying buyers.
Eligibility for these programs generally depends on your household income, credit history, and property location. When you begin your mortgage application, be sure to ask your mortgage loan officer which assistance programs you might qualify for. They can help you evaluate your options and determine the best path forward for your financial situation.
Recommended: Indiana First-Time Home-Buying Assistance Programs
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The path to homeownership involves a lot of moving parts, and it’s natural to feel a bit overwhelmed. But don’t worry — breaking the process down into manageable phases can make all the difference. This checklist walks you through 11 essential steps to help you navigate your first home purchase with confidence.
Before you start house hunting, take a moment to evaluate your financial readiness. Buying a home involves more than just a mortgage payment; you’ll need to account for down payments, closing costs, property taxes, homeowners insurance, and ongoing maintenance. To gauge your financial health, consider these key areas:
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Creating a budget is the best way to determine your comfort zone and avoid overextending your finances. When mapping out your numbers, don’t just look at the mortgage payment; remember to account for the full picture:
If you’re wondering where to start, try using a home affordability calculator to estimate your price range.
When it comes to your down payment, many buyers aim for 20% to avoid private mortgage insurance (PMI) and snag better rates. However, if that’s not realistic, no problem: Conventional loans for first-time buyers can go as low as 3% down, and some government-backed loans require even less — sometimes nothing at all. You can use a down payment calculator to see what’s possible for your savings.
Choosing the right mortgage is a big decision, and it helps to know what’s out there. Here are the most common types of mortgage loans to consider:
Shopping around is one of the smartest ways to find a more affordable loan. Fees and rates can vary significantly between financial institutions, so don’t just look at the advertised interest rate — look closely at the total costs.
When evaluating offers, compare the annual percentage rate (APR), which includes your interest rate plus specific lender fees and discount points. Remember that this figure doesn’t include all closing costs, so ask for a full breakdown.
As you compare, consider:
Before you start touring homes, you’ll need to know exactly how much you can borrow. This usually happens in two stages:
Having a preapproval letter is a major advantage when making an offer, as it shows sellers you’ve already cleared the lender’s financial check and are ready to move forward. Understanding the difference between prequalification vs. preapproval is an important step before you start your home search.
Partnering with a dedicated real estate professional to represent your interests as a buyer can make the process more efficient. A buyer’s agent can help you understand how to buy a house for the first time. They can also protect your interests throughout the home-buying process.
While you may feel that an agent isn’t needed, an agent can tailor your home search so that you spend less time looking at homes that don’t meet your criteria. They may also have access to new listings that aren’t yet on the market and may be willing to preview homes for you.
Before working with an agent, read about how real estate commission fees are changing to understand how compensation works.
This is the fun part: Begin shopping for houses! Your home search will depend on your household needs and financial budget. Consider researching neighborhood safety, daily commute times, school districts, and the local cost of living.
It’s also important to know your rights regarding fair housing guidelines. Federal laws strictly prohibit housing discrimination based on race, national origin, religion, sex, or family status. If you encounter discrimination, you have the right to file a complaint.
Recommended: Best Affordable Places in the U.S.
Once you’ve found the right home, your agent will help you draft a competitive offer. They’ll provide data on recent local sales to help you land on a fair bid. Your offer letter will outline:
If the seller accepts, you’ll officially enter the contract stage and submit an “earnest money” deposit. This is a good-faith payment that shows the seller you’re serious about moving forward.
Think of a home inspection as a health checkup for your potential new house. A professional inspector will examine key areas — like the roof, foundation, plumbing, and electrical systems — to uncover any hidden issues.
Before your lender finalizes your mortgage, they’ll require an appraisal to ensure the home’s market value aligns with the loan amount. This protects both you and the lender from overpaying.
Congratulations! You’re in the home stretch of this journey. Before you sign the closing documents, do a final walk-through of the house with your agent to verify its condition.
You’ll receive a closing disclosure document three business days before signing paperwork.
This document outlines your loan terms, monthly payments, and final closing costs. Lenders require proof of homeowners insurance before issuing funds. Make sure your policy includes any regional environmental hazards that require extra coverage.
Once the paperwork is signed and the loan is funded, you’ll get the keys to your new home.
An online calculator can be a big help in comparing home equity loan rates and terms. And it’s not the only calculator you’ll find helpful during your home equity loan process:
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
Use SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay.
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
This is just the beginning of your homeownership journey. To ensure a smooth transition, here’s a final checklist:
Purchasing your first home in Indiana might feel like a big project, but it’s completely manageable when you have the right roadmap. Remember, you don’t have to do it alone: Take advantage of local assistance programs, and lean on your support team — like a knowledgeable buyer’s agent. By focusing on your credit health, setting a realistic budget, and staying organized, you’ll be well-positioned to find a home that fits both your lifestyle and your financial goals. You’ve got this!
To buy a house for the first time, you need enough money for your down payment and closing costs. Closing costs range from 2% to 5% of the mortgage amount. Down payments range from 3% to 20% of the purchase price for conventional loans, while government-backed loans require 0%-3.5%.
Conventional mortgage loans for first-time homebuyers usually require a credit score of at least 620, while FHA loans allow you to qualify with a score between 500 and 579 with a 10% down payment or a score of at least 580 with a 3.5% down payment. Specialized options such as VA and USDA loans don’t establish a set minimum credit score requirement, but lenders typically want scores of at least 620 and 640, respectively, to approve your application.
It’s a good idea to begin the home-buying process by gathering your financial records and reviewing your monthly income and outstanding debts. Calculate your debt-to-income ratio to understand your realistic price range. Once you have a clear picture, you can contact mortgage lenders to compare available loan options and apply for a formal preapproval letter.
Good loans for buying your first home depend on your circumstances. FHA loans are popular because they feature low down payment options and accessible credit score requirements. VA loans offer benefits to eligible active-duty service members, veterans, and surviving spouses, including no down payment requirements. Conventional loans are ideal for buyers with strong credit scores and the ability to make larger down payments.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
This article is not intended to be legal advice. Please consult an attorney for advice.Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Take the first steps to homeownership today. Get prequalified for an FHA loan online.
