Idaho Mortgage & Refinancing

With its breathtaking views of the mountains, rivers and lakes teeming with natural resources, as well as its 25 state parks, there’s no wonder why quite a number of consumers choose to invest in a home in Idaho. This, coupled with its booming industries (energy, science and technology) contributing to a good employment rate, makes the state a great place to live in. (Source: Livability.com)

Although it boasts of plenty of great cities, those that secure the highest spots on the list include Twin Falls, Boise, and Idaho Falls. Cost of living in the state isn’t bad too, with it having a 95.10 rating. (Source: Sperling’s Best Places)

Home Buying Now vs. Later

In 2014, The Gem State’s mortgage rate average at 4.19%, just 0.06% higher than the national average. The following year, it went down to 3.91%. At present, rates are still a bit higher than the countrywide average. In terms of real estate pricing though, its homes cost less on average than the rest of the nation. An average home can fetch a value of $183,000. (Source: Zillow)

The final decision of whether to make the purchase now or later still depends on individual factors. These include one’s capability of repaying the home loan, how much money the borrower has saved for the down payment, and if a loan applicant can wait till his/her credit score has improved. It’s also worthy to note that borrowers can make their overall expenses easier on the wallet.

How Affordable Homes in the State Are

As mentioned above, the average price of real estate in ID is lower than many other places in the country. Single-family homes, which make up 88.40% of the housing market, have an average value of $126,393.38. PUD homes, on the other hand, has a higher average value at $138,706.03, although only 5.90% of houses here fall under this building classification. Value of condominiums average at $187,226.56, while townhomes are at $104,895.14.

Choice between a Fixed- and Adjustable-Rate Mortgage

ID borrowers have two primary options when it comes to mortgages: the fixed-rate and the adjustable-rate (known also as variable-rate) mortgages. It’s important to make the decision based on one’s short- and long-term needs, as both types of home loans come with their own benefits and drawback.

For example, the main attractive feature of fixed-rate mortgages is their locked-in interest rate. Even if the market performs poorly, borrowers don’t have to worry about a change in the rates their lender will apply on their monthly payments. And with the market still quite unstable, this represents a far less-risky choice. This is also the primary reason consumers who intend to stay in their house permanently or for more than a decade choose fixed-rate mortgages.

Mortgage applicants who plan to stay in the house for five years or less usually choose an adjustable-rate mortgage. They do so because these loans come with teaser rates – which are basically the interest rate – much lower than those of the fixed-rate ones. They’re called this for a reason: the reduction only applies for a short period of time. Some lenders offer them for the first year, but others for three or even five years. Borrowers who can repay their entire debt in a shorter period of time can save a considerable amount of money with this type of home loan.

Better Credit Score Rating Warrants Better Rates

A key factor that influences mortgage rates is credit score. The higher the score, the better the rates. Those who have exceptional scores (800 or higher) get the best rates, while those with poor scores (579 or below) often receive rejections from lenders. (Source: Experian)

Fortunately, even just a slight improvement on one’s credit score rating can already help a lot in raising an applicant’s chances of securing a mortgage, or getting a much better rate. Idaho also has several programs designed to assist low-income borrowers or those in danger of foreclosing.

References:

Experian: http://www.experian.com/blogs/ask-experian/infographic-what-are-the-different-scoring-ranges/

Idaho Housing and Finance Association: https://www.idahohousing.com/

Idaho First Time Homebuyer: http://www.idahofirsttimehomebuyer.com/about/

Home Affordable Refinance Program: http://www.harp.gov/