How to Buy a House in Idaho: A Homebuyer’s Guide
Updated: January 23, 2024
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Based on Zillow's Home Values Index, the average home value in Idaho is $467,694. This data indicates that, on average, it's significantly more expensive to own a home in the state than in the rest of the country, as the average home value in the U.S. is $357,589.
In comparison to the rest of the U.S., the average value of a home increased by significantly less over the past year. Last year, home values in the nation increased by 13.5%, while home values in Idaho only increased by 4%.
While it may seem time consuming to learn all about the ins and outs of the homebuying process, spending a few hours researching now could help you avoid falling into crippling debt. To help you, MoneyGeek went into detail about factors like mortgage rates, location, home inspection and other details.
Choose an Ideal Location
Your property’s location is one of the most important factors in the homebuying process, as it impacts multiple factors including access to amenities, price and property tax. For instance, the median cost of a home in Boise is $497,877 while it’s $896,608 in Stanley.
Choosing the best home location comes down to your lifestyle and your personal preferences. Homes in rural areas may be less expensive than those in urban areas. However, access to certain amenities, like dining options and recreation, may be limited.
Calculate Mortgage Rates
There are multiple types of mortgages to choose from, depending on your borrower profile. Key factors that significantly affect your mortgage interest rates include your credit score, home location, down payment, property price and loan amount, loan term and loan type. If you want the best rate, you should evaluate your needs first, shop around and compare lenders.
Prepare Down Payment Requirements
Down payment requirements differ by mortgage type and lender. For instance, some lenders offer loans that require at least a 20% down payment. On the other hand, many low-down-payment and zero-down-payment options are also available.
Get Pre-Approved for a Mortgage
After finalizing a lender, it’s best to get pre-approval for a mortgage loan. A pre-approval is essential as it shows your ability to secure a mortgage.
However, know that there’s a difference between pre-approval and pre-qualification. In pre-qualification, the lender reviews your information and lets you know if you will be able to get a loan. On the other hand, pre-approval usually involves hard credit checks and the lender might make a conditional commitment to lend you the loan amount.
Conduct a Home Inspection
Before you close a home purchase, it’s essential to conduct a home inspection. This will allow you to get a better idea of the home’s current condition and identify any necessary repairs. Depending on the lender you choose, you may be required to conduct a home inspection before your loan is approved.
Close Your Mortgage Loan
After you have gone through your loan terms and are satisfied with them, you can move forward with closing your mortgage loan. At this stage, you will have to pay closing costs, which are usually 3% to 5% of the loan amount. These include costs for various expenses like taxes, attorney fees, appraisal costs, mortgage insurance, title insurance and loan origination fees.
Idaho Homebuying Details
Finding the best place to buy a house in Idaho generally involves analyzing your needs, lifestyle and other important factors. The cost of a home in the state is generally higher than in the rest of the country, making it essential to shop around and compare rates from different lenders to find the most affordable deal.
You can benefit from various national and state first-time homebuyer programs if you can’t afford a large down payment.
Idaho Heroes Program
This helps first-time homebuyers by providing down payment and closing cost assistance up to 7% of the home’s purchase price. However, since it’s only available for borrowers with a specific background, it’s best to check first if you’re eligible.
IHFA First Loan
Borrowers in Idaho can get a fixed-rate loan through this program. They may also qualify for the down payment and closing cost assistance, low mortgage insurance and affordable rates.
USDA Loans
No down payment is required for borrowers intending to purchase a home in USDA-designated rural regions across the U.S.
Frequently Asked Questions About Buying a Home in Idaho
The road to homeownership might be challenging for some buyers. To make it easier, MoneyGeek analyzed the following frequently asked questions about how to buy a house in Idaho.
Before you buy a house in Idaho, you must ensure that you’re choosing the right one based on your needs. You can start by assessing which type of location will suit you best and then analyzing how much you can afford. It’s also important to consider the eligibility requirements of the lenders.
It depends on your current financial and life situation. If you feel like you’re ready to take on a long-term financial commitment and can comfortably afford mortgage payments, you can proceed with buying a home in Idaho.
Although the average value of a home in Idaho is more expensive than the rest of the country, data indicates that the average home value in the state is growing slower than in the rest of the U.S. It’s best to analyze your financial situation to determine if buying a house in this state makes sense.
To obtain a home in Idaho, you should ensure that you have sufficient income to make at least a 20% down payment and afford your monthly payments.
In 2021, the average real estate property tax rate in Idaho was between 0.698% and 1.043% for rural and urban locations, respectively.
Based on MoneyGeek’s analysis, Payette, Preston, Ammon and Idaho Falls have the cheapest cost of living.
sources
- LivingCost.org. "Cost of Living in Idaho." Accessed October 21, 2022.
- U.S. Department of Housing and Urban Development. "Homeownerhip Assistance Programs: Idaho." Accessed October 21, 2022.
- Zillow. "Idaho Home Values." Accessed October 21, 2022.
- Zillow. "United States Home Values." Accessed October 21, 2022.
- Zumper. "The Most Affordable Cities in Idaho." Accessed October 21, 2022.