Idaho Mortgage Rates at a Glance

Mortgage Rates - What Idaho Home Buyers Need to Know

A mortgage is a legally binding contract between you (a future homeowner) and a lender (usually a bank) in which the lender agrees to loan you the money for your home on the surety that you’ll repay the debt by a set date. You’ll make monthly payments towards the loan in addition to paying a monthly interest rate. Should you fall behind, the lender can seize your home in foreclosure. Therefore, understanding Idaho mortgage rates is essential to making wise decisions when taking out a loan.

Generally, prospective homeowners will secure a conventional loan or a government home loan (government home loans are better known as FHA loans because the Federal Housing Administration backs the loan). Both have pros and cons. As an example, conventional loans, typically, require lower down payments. FHA loan lenders accept lower credit scores and higher debt-to-income ratios, such as up to 50%. A conventional loan lender prefers a much lower debt-to-income ratio.

Farmers Bank’s conventional loans are more affordable than government home loans. Thus, you’ll pay less on interest rates, principal, annual percentage rate, and monthly payments when you take out a conventional loan with us instead of getting a government-funded loan. The Idaho loan specialists at Farmers Bank can tell you more about home mortgage loans.

Current Idaho Mortgage Rates

Mortgage rates fluctuate daily. For instance, on April 21, 2023 the fixed mortgage rate in Idaho for a 15-year conventional loan had an interest of 5.375% and annual percentage rate (APR) of 5.658%. The monthly principal and interest payment was $972.56 (excluding taxes and insurance). For a 30-year fixed conventional loan, the interest rate was 5.990% and the APR 6.163%. The monthly principal and interest payment was $718.69 sans taxes and insurance. As of April 26, 2023, the mortgage interest rate for 15 years is 6.30% and 6.93% for 30 years. 

5 Home Mortgage Loans

Idaho is one of the fastest-growing states in the country. The influx of new residents combined with the ever-shifting housing market means you should know which loans are out there. We, however, have decided to compose a non-comprehensive list of the most common and best mortgage loans for ideal Idaho mortgage rates. 

Conventional Loan

With this choice, you can access a conforming or a non-conforming loan. A loan is conforming if it abides by the standards promulgated by the Federal Housing Finance Agency (FHFA). Regardless of whether you choose a conforming or non-conforming loan, you must have general eligibility. You’ll need a credit score of at least 620 to qualify for a conventional loan. Your debt-to-income ratio also needs to be 50% or less. Plus, the lender will also require you to make a minimum 3% down payment. 

Moreover, the maximum loan amount a single-family home can borrow, in most counties, is $726, 200 as of 2023. In towns where the cost of living is higher, a single-family home may borrow up to $1,089,300. 

On the other hand, if your credit portfolio is atypical or you want to buy a home that’s more than the $1,089,300 limit, you can take out a non-conforming conventional loan.

Fixed-rate Mortgages

A fixed-rate mortgage is a mortgage rate that doesn’t change. This means you won’t have differing monthly payments that vary due to fluctuating interest rates. But bear in mind, should the interest rates in Idaho drop significantly, you’ll still have to pay the fixed rate–unless you refinance your loan. On the upside, taking out a fixed-rate mortgage means budgeting just became easier. Another possible upside is that you’ll have 15 or 30 years to pay back most fixed-rate mortgage loans.

Adjustable-rate Mortgages

Adjustable-rate mortgages have interest rates that change. Initially, your interest rate stays the same for a set period. Later, the interest rate will vary depending on different factors, like your home’s market value. The following description is an example of how adjustable-rate mortgages work. 

Suppose you take out a 5/6 mortgage loan in Idaho. Accordingly, your interest rate will remain unchanged for five years. Then, your interest rate will vary every six months. Sometimes, your interest rate will increase. Other times, it will decrease. You may want an adjustable-rate mortgage because it has a lower interest rate, up front, than fixed-rate mortgages.

Jumbo Mortgages

Jumbo loans are for future home buyers who need a large amount of money. Most buyers who take out a jumbo loan live in cities where the cost of living is higher than the national average (e.g., San Francisco, D.C., NYC). But that doesn’t mean a bank won’t offer you a jumbo mortgage loan in Idaho. If you think you will need a jumbo mortgage loan, expect to have an impeccable credit score and make a big down payment.

A noteworthy consideration about jumbo mortgages is that a bank will want you to show you’re able to make payments for the first six to twelve months, such as through listing your liquid assets (i.e., your free-flowing cash that’s not tied up in anything).

Second Mortgages

Do you already have a home, but you want to purchase another one? If so, your lender will probably suggest a second mortgage.

When lenders mention “second mortgage” loans, they’re referring to either a home equity loan or a home equity line of credit. Whether you select a home equity loan or home equity line of credit, your home is collateral. This means the bank can recover their money by foreclosing on your home if you miss too many payments. Knowing that you could lose your home may leave you questioning why you’d want this option.

Well, second mortgages tend to offer lower interest rates. Not to mention, you’re using money you already have (your current home’s equity) to buy another home. Moreover, your credit score isn’t relevant, making this a reasonable option if you have a less-than-ideal credit score.

The Best Idaho Mortgage Rates are at Farmers Bank

You can find the best Idaho mortgage rates at Farmers Bank. Farmers Bank has serviced the Magic Valley area for more than 100 years with exceptional service! Our slogan isn’t just for show. By continuing to ensure you get the best mortgage rates in Idaho, we are a tradition you can count on. Contact us to speak with one of our mortgage rate experts today.