First Internet Bank

First Internet Bank offers loans with fixed and adjustable rates. It’s often up to you whether you want a fixed-rate mortgage with predictable monthly payments or an adjustable-rate mortgage (ARM) with payments that could rise or fall with market conditions.

A fixed rate may be better for borrowers who plan to live in their homes for several years and whose financial situation isn't likely to change all that much.

However, because the intro rates on ARMs are often lower than fixed rates, an adjustable rate could help a borrower secure a better rate initially. This makes them a good option for homeowners who have plans to sell their homes in a few years and need a short-term lending option.

In 2021, First Internet Bank had a slightly lower average rate than the national average. However, in 2020, the company had slightly above-average rates.

First Internet Bank average home purchase rate vs. national average

First Internet Bank has an instant quote tool on its website that you can use to check what rates you qualify for given your financial situation. This tool includes estimates of your interest rate, annual percentage rate (APR), principal and interest payments and closing costs.

To actually get a mortgage with First Internet Bank, you can begin the preapproval process on the company’s website by creating an account and initiating your loan application. Be prepared to answer questions about your financial situation. You’ll need to provide information like your account balances and annual income.

Having the required documentation handy before you begin your application should be helpful. The company requires two years of W-2s and the previous month’s pay stub (or year-to-date financial statements if you’re self-employed). You may also need to submit other financial documentation, though.

Once you submit an application, the company will connect you with a loan officer to gather additional information and help you decide between different loan options.

Marius, a ConsumerAffairs reviewer from Massachusetts, had this to say about getting a mortgage with First Internet Bank:

“First Internet Bank provided a very good rate and a smooth experience for our first mortgage. After seeing the rate on their website, I called and spoke with loan officer Grant **, who confirmed the rate and was quick in providing us a full loan estimate. Throughout our communication he was professional, courteous, and extremely prompt, usually replying within five minutes.”

After your application and the underwriting process are complete, you could receive a preapproval decision immediately. Your loan officer will continue to assist you through the closing process.

First Internet Bank application features

First Internet Bank’s mortgage options include conforming conventional loans, jumbo loans (for nonconforming loan limits), FHA loans and VA loans. The company does not currently offer USDA loans.

First Internet Bank also offers construction loans for borrowers who plan to build new homes. However, this type of loan is only available to borrowers in Central Indiana.

In 2021, First Internet Bank saw 1,202 home purchase applications. About 61% of applications (737) made it to closing, and about 6.5% (78) were denied.

Loan applications for home purchases only by year

Refinancing

You can refinance your existing mortgage with First Internet Bank, whether you’re looking to lower your monthly payment or get cash out. In 2021, the majority of loans the company originated were for refinances (about 69% were either rate-and-term or cash-out refinances). The remaining portion of loans was for home purchase (about 30%).

Borrowers choose to refinance for a number of reasons, but many took action in 2020 and 2021 when rates were very low. If you refinance your mortgage to a lower rate, you not only save on monthly payments, but you can likely reduce the total amount of interest you pay over the loan term.

According to data from Freddie Mac, borrowers who refinanced in the first six months of 2021 lowered their rates by more than 1.2% on average, resulting in an average annual savings of over $2,800.

Fewer borrowers are expected to refinance in 2022 because rates have been steadily rising. The federal funds rate, which influences mortgage rates, increased from 0.08% in June 2020 to 1.68% in July 2022, according to data from the Federal Reserve Bank of St. Louis.

However, you may still decide to refinance when rates are high if you can secure a lower rate than you currently have. For example, your credit score may be significantly higher now than when you first obtained your mortgage, which could help you qualify for a lower rate despite the economy.

Just be sure to consider all the costs associated with refinancing and compare them with the potential interest savings over time before making a decision.

Home purchase vs. refinance loans by year

HELOC and home equity loans

First Internet Bank offers both home equity lines of credit (HELOCs) and home equity loans. However, it doesn’t publish much information about these products, so you’ll want to check with the company directly for more details.

HELOCs offer an open credit line to draw from over a few years, so a HELOC can be helpful if you anticipate future expenses that are somewhat unpredictable. Just know that HELOCs generally carry adjustable interest rates, which means your monthly payments could vary over time.

A home equity loan may be a better option if you plan to fund something with a lump-sum payment (such as putting a new roof on your house). With this type of loan, you’ll receive cash upfront and begin making payments on the loan immediately. Home equity loans generally also have fixed interest rates, which may be desirable if you don’t want your monthly payment to change.

First Internet Bank requires a 620 credit score for both conventional loans and government-backed mortgages (like FHA and VA loans). This credit score requirement is higher than the industry standard for government-backed loans (usually 500 for FHA loans and 580 for VA loans).

However, its down payment requirements are in line with most other lender requirements. You’ll need to offer at least 3% down on a conventional loan and at least 3.5% for an FHA loan. VA loans generally have no down payment requirements.

First Internet Bank mortgage requirements by type

Read our guide to USDA loans for more information on these loans.

If you use the instant rate quote tool on First Internet Bank’s website, you can get an estimate of your closing costs; however, the quoted amount only includes lender fees, so you’ll still need to account for other closing costs.

Other closing costs (usually called third-party fees) may include appraisal fees, mortgage insurance (if you plan to offer less than a 20% down payment) and title fees. Total closing costs generally add up to 2% to 5% of the loan amount.

To help you plan for these expenses, you’ll receive a Loan Estimate after you apply for a mortgage. This document outlines all of your closing costs and the approximate total for each expense. Three days before the actual closing, you’ll also receive a Closing Disclosure that finalizes the closing costs you'll pay.