Whether you are officially relocating to Idaho or simply mulling over a move, Idaho mortgage rates will factor into your cost of living in the Gem State. You probably hear the daily interest rate reports on the morning news, but those are general numbers that should be considered a starting point for rates. Interest on mortgages varies from state to state based on local factors, and the type of loan you get will affect the interest rate you pay, as well. Consequently, if you read that average 30-year fixed mortgage rates in the U.S. are at 3.65 percent, that doesn’t mean the mortgage you get on a 15-year fixed or an IHA loan in Idaho will carry that same rate. Plus, the rate increases announced by the Federal Reserve at the end of 2015 will not only affect home loan rates across the country but will affect Idaho mortgage rates, as well.
What Aspects Factor Into Idaho’s Mortgage Rates?
There is no simple formula for taking national home loan rates, also known as “prime,” and figuring out what Idaho mortgage rates will be. You can try to estimate based on home prices because, typically, interest rates are higher in areas where home prices are lower. It costs your lender the same amount to do the paperwork whether the loan is for $150,000 or $300,000, so charging higher rates in those areas that tend toward smaller loans is how lenders pass on the cost of processing mortgages with smaller balances. Therefore, considering the average home price in Idaho is only $167,100, you can expect home loan rates in Idaho to be a little higher than in states with more expensively priced homes.
What’s more, you may have a stellar credit score, but if the average credit score in the state you want to buy a home in is low, you’ll pay the price in the form of a higher interest rate on your home loan. Idaho ranks 22nd in the nation with an average credit score of 694. While that is not a horrible number, it is below the generally accepted starting point for a “good” score which is 720. That alone means that Idaho mortgage rates will be higher than the numbers you see on the news.
Though median home prices in Idaho and the state’s average credit score mean higher interest rates in general, the type of loan you get and the term you opt for can bring your interest rate down. Additionally, you can always pay “points”–essentially a percentage of your loan amount–to buy your interest rate down.
What Are the Current Idaho Mortgage Rates?
Current Idaho mortgage rates are fairly low, especially if you have ever paid more than 7 percent on a mortgage. Just as mortgage interest rates vary from state to state, you will also find different rates for different Idaho cities. On the average, though, current Idaho mortgage rates are:
- 3.5 percent for 30-year Conventional
- 3.25 percent for 30-year FHA
- 3.25 percent for 30-year IHA
- 3.375 percent for 20-year Conventional
- 2.75 percent for 15-year Conventional
- 3 percent for 15-year FHA
- 3.2 percent for an adjustable rate mortgage
There are differences in the loan types that can be just as important as the interest rates when selecting which mortgage to go with. For example, the maximum loan to value on conventional loans is 95 percent, so you will need at least $8,355 to put down on a median-priced home. FHA and IHA loans typically require a minimum of three percent down, but some of those types of loans are for first-time home buyers only.
The shorter-term loans carry lower interest rates, but remember that the down payment requirements still apply. Also, even though you will pay less interest over the term of the loan, your payment amount will be higher because the loan amount is spread out over a shorter amount of time.
If you are determined to get a great deal on Idaho mortgage rates, remember that you can pay points to buy the rate down. Each lender determines how many points they’ll charge to give you a lower rate. You will have to call around to compare points and rates between lenders but, generally, 1 point–or 1 percent of your loan amount–will buy your interest rate down about .25 percent. That means it could be possible to get a 3 percent interest rate or lower on a 30 year FHA loan for a median-priced home by paying around $1,620, and that could save you over $7,000 over the term of the loan.
What’s the Idaho Mortgage Rate Outlook for 2016?
Because no one knows what the future will bring, experts hesitate to make absolute statements about interest rate predictions. However, most agree that home loan rates will inch up in 2016, and that includes Idaho mortgage rates. The outlook published by the Idaho State Governor’s Division of Financial Management is essentially in line with projections by mortgage industry insiders whose forecasts place interest rates in the four to five percent range over the next year. In the mortgage industry, that one percent span is a wide one, but keep in mind that no one is predicting that mortgage rates will shoot up from 3.5 percent to 4.5 percent or higher overnight. The expectation is that they will inch up 25 basis points (.25 percent) at a time, still giving home buyers time to lock in rates below four percent.
2 Point Highlight
Current Idaho mortgage rates are fairly low, especially if you have ever paid more than 7 percent on a mortgage.
The expectation is that (Idaho mortgage rates will inch up 25 basis points (.25 percent) at a time, still giving homebuyers time to lock in rates below 4 percent.
