Home ownership is a dream that many of us work tirelessly to achieve for what often seems like an eternity; only to find out that finding the best mortgage can actually seem like the hardest step in the real estate purchasing chain.
This is especially true if you live in Idaho. I know many people who have wondered how to find the best mortgages in Idaho; several of them ultimately found great deals, others, sadly, got burned.
The following information is specific to Idaho, but the principles are the exact same for every state throughout the United States. What I'm saying is that you don't have to live in Idaho to bennefit from this article.
When you're shopping for a mortgage, the two biggest variables you'll be looking at are the following:
- Term Length: how long will the mortgage last? Most home loans last 30 years, but there are other options, such as 15, 10 and any number of custom options.
- Interest Rate: this is how much the lender will charge you for the unpaid balance of your mortgage. The lower the interest rate, the less money your bank or lending institution will tack on. Usually (not always) this translates to lower monthly payments.
These two variables ultimately shape your mortgage. The shorter the mortgage term and the higher the interest rate, the higher your monthly payments will be. Similarly, the longer the term and the lower the rate, the lower you'll probably pay each month.
Ultimately, you'll want to find the mortgage with the lowest interest rate available. This is often based off of your credit score, but in many instances you'll find that certain lenders will offer lower rates to people with similar scores. So shop around.
Variable Rate Versus Fixed Rate Mortgages
This is one of the most important decisions you'll ever make when you choose a mortgage. Fixed rate mortgages will never change the interest rate. Whatever you signed up for is what you'll get throughout the life cycle of your loan, or until you pay it off. Variable rates, on the other hand, can change at any time. Just because you signed on at a low 5% rate doesn't mean it will stay there; it could lower (which is always nice, but rarely happens) or increase - sometimes on a monthly basis. For the sake of this article I'm not going to offer my opinions on which one is better, but I will say that this is an important decision you should think through.
Finding The Best Mortgage In Idaho
Idaho, unlike many states, is very large and diverse - both in terms of geography and culture. With several distinct "zones," you'll quickly find that certain mortgages aren't available across all territories. The way most lenders break up Idaho are as follows:
- Southwest Idaho: Boise and the "Treasure Valley"
- Southern Idaho: Twin Falls and the "Magic Valley"
- Southeast Idaho: Pocatello
- Central Idaho: Sun Valley
- Northern Idaho: Lewiston
In many instances, many banks offer packages that differ from zone to zone. Sometimes you'll find a great deal in an area you don't live in. Here's what you do: Call the bank in the zone offering the best rate, then ask if you can sign through them. It doesn't always work (from what I hear) but if it does you stand to walk away with a much better Idaho mortgage.
Other Mortgage Options: Online
Given our modern reliance on the Internet, it's no surprise that many people have shopped for and found mortgages through online sources. Many claim that the interest rates are better than what they could find through a traditional lender. This is likely because online banks don't have the same overhead costs as brick-and-mortar businesses, which means they can afford to pass the savings on to their customers.
One big word of warning, though: Be sure to check, double check, then check again the reputation and background of any online mortgage lender.
Finding A Mortgage Broker In Idaho
Mortgage brokers typically have connections to mortgage lenders that the average person doesn't. This means they can find things that would boggle our minds. And because they've been working in the mortgage industry for some time, they have plenty of experience to pass on to home buyers - and sometimes this experience relates to topics far beyond the simple "numbers game" of mortgage shopping. In many instances, they know who is credible and who isn't.
What do mortgage brokers get out of this? Usually a nice, fat commission check. That's a good thing and a bad thing. It's good because most of these folks work off of referral clients; and if you're happy, you're more likely to refer them to your friends and family. But it can be bad if you find a less-than-credible broker who gets a higher percentage kick back from a particular mortgage company, as he or she might push a product on you that doesn't fit your circumstances as well as other mortgages would.
You can find an Idaho mortgage broker in your local phone book or online. Or if you're working through a Realtor, he or she might be able to recommend a couple.
Personally, I'm a huge fan of interviewing potential mortgage brokers before agreeing to do business with them. Explain your personal situation, ask them questions and evaluate their experience. Ask yourself: "Is this person the right fit for me?" We all have different priorities, and when it comes to signing the bottom line of a mortgage document that will dominate your financial life for the next 30 years, make sure you're comfortable with the person handing it to you. There's nothing wrong with interviewing multiple mortgage brokers, then choosing the one you like the best.
Some people scoff at that idea, but keep in mind that this person stands to gain thousands of dollars from you. In many ways, he or she is your employee. It's your money that will provide their paycheck. You wouldn't hire the first employee that answered your help wanted ad without talking with other applicants, would you? The same is true for finding a good mortgage broker in Idaho.
By following these simple steps, you should be well on your way to finding the best mortgage in Idaho - or for that matter, any state.