If you’re shopping around for the best refinance mortgage rates in Idaho, then you’re in luck. Here, you’ll learn about some of the different programs available and how to take advantage of them to lower your monthly payment and free up cash from your equity. Some of these programs even pay part or all of the closing costs, so you won’t have to come out-of-pocket for the expenses. Read on to discover just what programs are available and how they work.
Reasons to consider a refinance in Idaho
When the housing market declined in 2012, the median home price in Idaho dropped to $139,000. As the economy recovers, home prices are on the rise again. Zillow estimates median housing prices in Idaho to reach $192,000 by 2018. Simultaneously, interest rates in Idaho in 2008 were around 6 percent, and with the housing market crash, interest rates declined steadily.
These two factors put homeowners in Idaho in a unique situation. If your loan-to-value ratio has improved with the rise in home prices, you may be eligible for a better rate on your mortgage.
It may also be favorable for you to refinance, housing market predictions aside, if your financial situation has changed since you first took out your mortgage. If your credit score has risen, or your income has changed, you might be set to take advantage of different rates and programs with a refinance.
Lastly, if you might be moving soon, or if you secured a jumbo loan it might make sense to take out an adjustable rate mortgage over a fixed rate mortgage.
Idaho refinance options
Homeowners have many types of products to consider for their refinance. Common types of refinancing options in Idaho are as follows:
Traditional fixed-refinance options
15, 20, and 30-year refinance options are popular for refinancing in Idaho. The shorter the loan terms the lower the interest. The longer the loan terms, the lower the monthly payment. You’ll need to use an Idaho mortgage calculator to determine which loan terms make the most sense for your financial situation and in your specific zip code.
Adjustable rate mortgages (ARMs)
ARM loans are a terrific short-term solution in many instances. If you are nearing the end of your purchase mortgage, if you plan to move soon, or if you secured a jumbo loan considering an ARM may be financially sound. ARM loans tend to have lower interest rates than fixed loans, initially but will increase over time. Take into consideration the market forecast to see if an ARM fits in with your long-term goals.
The FHA streamline refinance program in Idaho
The FHA has introduced a new program that can streamline refinancing saving homeowners both in time and cost. That’s because the appraisal has been cut out of the picture. In order to qualify, you’ll need to currently have an FHA mortgage on your home. This program is only for lowering your monthly payment by getting a better interest rate, so it’s not a good option if cashing out your equity is what you’re looking for. However, those who take advantage of the program now are not prevented from taking out future loans or lines of credit on their equity.
Overall, this is one of the best programs to refinance your home without adding to the principal too much. You’ll be able to lock in a lower interest rate and enjoy more of your money each month.
Low or No Closing Cost Programs
No cost refinance
Other lenders in Idaho offer loans that allow you to pay a low amount or no closing cost at all. This practice has become more common to attract homeowners who might be deterred from refinancing because of the money they would have to pay out of their own pocket. Keep in mind, however, that the interest rate will be slightly higher than the 30-year refinance rates where you pay the closing costs yourself. If you can’t afford to pay the closing costs and you’d be getting a better rate than what you’re currently paying, then this type of loan is still a bargain to lock in interest rates while they’re still low. Be sure to combine this with a fixed rate loan in order to prevent your monthly payment from going up in the future.
Economists agree that timing may be perfect for homeowners to refinance in Idaho. (Photo/Wikimedia Commons)
Finding the best lenders in Idaho
It’s always wise to shop around before securing your refinance rates. Different lenders will offer different loan terms. Check with your current lender to see if they offer any special deals on refinancing. U.S. Bank, for instance, offers current customers a streamlined process to eliminate some of the paperwork involved in a refinance, and a $1000 discount on costs associated with a refinance. These small perks can add up.
Also, consider working with smaller community banks or credit unions. These institutions may have less of an online presence, which could make the research more cumbersome, but it’s likely they will have lower interest rates or better loan terms than larger regional banks. Customer service at small institutions may also be more customized for your needs.
Other considerations before refinancing in Idaho
What’s your break-even point?
It’s important for borrowers to consider their break-even point before securing a refinance loan. The break-even point tells you how many months it will take before you’ve paid off your refinance. This figure is especially important if you plan to move out of your home in the near-future, or if your current loan is reaching it’s end. Will you end up paying for your refinance longer than you plan to take advantage of its benefits?
Have you used a mortgage calculator?
Use a mortgage calculator specific to Idaho’s refinance rates. You can compare your current loan terms against the terms you’ve been offered from different lenders. How much will you be able to save each month? What will your interest come out to over the life of your loan? These numbers help paint the picture of which lender is right for you.
Idaho has some very good opportunities for making it easy and affordable to refinance your home. You’ll be able to free up more of your cash on a monthly basis and use it for the things that matter most to you. If you’ll be shopping around to compare different loans, then be sure to examine the APR, or annual percentage rate, for each one. This is the true number you need to know to compare multiple offers because it accounts for all costs and fees associated with the refinancing. By using the APR, you can compare different offers from multiple lenders to know which one is giving you the better deal.
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