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Idaho Mortgage: Buying a Home
Whether you are a long time resident who has always rented your living space, or you have just newly moved to Idaho, there are many factors to consider when you find yourself looking for your first mortgage in “the potato state.” Currently, Americans are being encouraged to buy their homes rather than rent, and in Idaho this is no exception. The state has roughly 1.3 million residents, and over 72 percent of them own their own homes. Perhaps this high percentage of ownership is due to the affordability of property. With a median home price of $106,300, the property value in Idaho is well worth its money, and accessible to the population.
Trust Deeds vs. Mortgages
One unique thing about buying a home in Idaho, is that buyers don’t actually sign a mortgage. Instead of using mortgages, the state operates by using trust deeds. Trust deeds are legal, written contracts, which ultimately deed over property to a trustee. As the trustee then, the buyer legally holds the title to his or her property. Although the term “mortgage” is not used to refer to the signed documents, the relationship functions in all the same ways between a trustee and lender.
Mortgage Fraud Protection
In a world where fraud and criminal behavior are becoming ever more popular, the state of Idaho has many laws in place to protect homeowners in their state. In 1996, the state put a law into effect which requires all real estate persons and salespersons to obtain a valid mortgage broker’s license. In addition, the State of Idaho Department of Finance has designated an entire office to mortgage fraud. This department not only handles consumer information such as complaints, but it also initiates investigations into illegal mortgage lending practices and fraudulent companies.
The Importance of Your Credit Score
When you finally decide you are ready to by a home in Idaho, there are many factors you must consider. One important one is your credit score. This score can determine your interest rates on your mortgage loan, as they can sometimes vary up to a 10 percent difference, and sometimes whether or not a lender will even agree to work with you. The higher your credit score is, the easier the process will be for you. The national average credit score is 677, but in Idaho it is a bit higher, at 691. Although your credit score is not the sole determining factor in your home-buying process, it is a large one.
Mortgage Rate Options
There are three main types of mortgages you can choose when buying your home. You can opt for a fixed rate mortgage, which means the terms are fixed at the beginning of the mortgage and they will not change for the duration of the loan. There is also an adjustable rate mortgage that can be adjusted in any direction following the economy’s current interest rates. Finally there is a balloon mortgage, which works somewhat like a fixed mortgage. Payment amounts do not change, but at the end of the mortgage, the balance can be paid in one large sum. You are also not bound to only one specific type of mortgage, as often times homeowners use a combination of them.