Home Buying in Idaho

The median household income in Idaho is just below the national average at $72,000. The median home price in Idaho is $484,000. Prices can vary by location, of course, including:

• Nampa, at $440,000
• Coeur d'Alene, at $615,000
• Boise, at $570,000
• Twin Falls, at $399,000

Despite the high prices, Idaho is considered a buyer's market. That means homes generally sell for the asking price or somewhat below. More than 60 percent of Idaho homes are owner-occupied, which can make for a tough real estate market. People who have been in their homes for several years don't want to sell at this time because interest rates are high, and if they sell, they would need to get a new mortgage at a higher rate.

It takes 16 days for a home to sell in Idaho, but the season is important. In winter, it's not uncommon for homes to sit for two months or more before selling. If you're a prequalified buyer, you can move quickly when the right place is found. A 20-percent down payment is key, along with a solid work history and a credit score above 600. (It can be a bit lower if you have a 20 percent downpayment saved).

Commuting in Idaho is quicker than elsewhere in the country, averaging only 20 minutes. The cost of utilities can sway a person's choice of living space. In Idaho, residents don't spend much money on utilities, which are $297 per month on average. That's nearly $150 below the national average for internet, electricity, and natural gas. Property taxes average $1,817 per year, well below the national average of $2,800.

Known defects must be disclosed to buyers within 10 days of accepting an offer on the home. Idaho's disclosure law covers more than the property condition. It includes information like:

• If the property is within an area that will be annexed by a city
• If there is any mold or other toxins present
• If systems like air conditioning, heating, and sewer are in operating condition
• If the property has been used to manufacture drugs
• Whether it's in a flood plain.

Prospective buyers who bid on the home must get a copy of the form within 10 days. Sellers should still have an inspection to determine the extent of any issues and the potential costs. This information can prompt renegotiation of the price. Your down payment should be contingent upon the property passing inspection without significant issues.

Idaho offers urban properties to those who want to walk or bike to a coffee shop with their laptop, as well as remote farmland far from organized towns.

A competitive market can be disappointing if your budget won't stretch to bid more than the asking price of the home you really want. But if you're prequalified for a mortgage, have a significant down payment ready, and are prepared to waive contingencies for the right property, you may prevail.

Consider a buyer's agent's guidance for the process. This realtor helps you find properties that most closely match your desired location and amenities. They tailor your strategy for finding and purchasing a home, including writing your offer and negotiating the price. They may also have inside information on homes about to go on the market, giving you a slight advantage.

The price history of a home, pros and cons of the area, and property taxes are just a few of the things a buyer's agent can provide. They will help write your offer, find an inspector, renegotiate the price if there are structural or systemic issues, and keep the closing on track.

A new twist requires buyers to have a contract with buyer's agents. Instead of splitting a 5-6 percent commission with the seller's agent; buyer's agents now negotiate their commission. Buyers must sign a contract describing the agent's role and payment.

If you've been saving for a downpayment and watching your credit score improve with each debt you pay off, you're almost ready to prequalify for a mortgage. This process will spell out exactly how much home you can afford. Idaho's median household income is $72,000. With a $60,000 downpayment, a buyer won't qualify for a $340,000 mortgage (about a $400,000 home) in today's high-interest economy. That's because, with a $72,000 salary, you're limited to paying $2,000 or less per month for your mortgage. Mortgage lenders won't allow people to spend more than 30 percent of their income on mortgage payments. You'll need a higher down payment or a higher salary to get a $340,000 mortgage.

When mortgage shopping, talk to both mortgage brokers and your local bank. A banker who knows you may extend special benefits to a regular customer. Mortgage brokers have access to a wide variety of mortgage choices and should find a good deal for you. A decision may hinge on your comfort level with the mortgage industry.

Your income-to-debt ratio and your history of on-time payments are crucial for mortgage prequalification. Your credit should be above 600 for government-backed loans and above 640 for other mortgages. Check free copies of your credit report (from Experian, Equifax, and TransUnion) to correct any errors that could complicate and delay your prequalification.

The federal interest rate applies to mortgages, and it's now the highest in years. This means higher payments for buyers. That's why many longtime homeowners don't want to sell now: they would have to get a new mortgage at a higher rate and with higher payments.

Assuming the seller's mortgage can be helpful if the mortgage has a low interest rate. Most USDA, FHA, and VA loans are assumable if you qualify for them. But you have to pay off the owner's equity, which is the difference between the property's selling price and the amount left on the mortgage you're assuming. To do so, you're likely to have to take out a second mortgage.

Fixed-rate mortgages can be a good deal, but they're less desirable if rates are high (rates rise and fall incrementally over periods of years). Adjustable rate mortgages are riskier because the interest rate can change during the term of the loan. Jumbo mortgages of $760,000 to $1 million allow wealthy buyers to borrow more than the federal housing authority limit in areas of particularly high property values.

Mortgage options include these government programs:

• First-time home buyers can get downpayment and closing cost help from the Idaho State Housing Authority.
• FHA mortgages are tailored for first-time buyers with down payments of less than 5 percent.
• Rural properties may qualify for USDA loans, especially buyers with low incomes, but good credit scores.
• Military veterans and their surviving spouses may seek a Veterans Administration-underwritten VA loan. These mortgages do not require PMI and may be used multiple times by qualifying individuals.

The average property insurance in Idaho is $1,500, a few hundred dollars less than the national average. Property insurance is not required under state law, but mortgage companies often require PMI, a type of insurance the homeowner pays, to protect their interest in the property. Making a down payment of less than 20 percent triggers a requirement for PMI by lenders. The cost of PMI varies according to your credit score but is generally between $400 and $1,400 per month in addition to your mortgage payment.

Things like garages, sheds, and fences must be specifically noted in a homeowner's policy for coverage. Valuable personal possessions inside the home are unlikely to be covered by insurance unless an additional rider is written.

Home buyers should be alert to scams surrounding the down payment process. As closing approaches and buyers are busy having inspections and appraisals done, they could fall prey to fraud: scammers can infiltrate the emails of title companies and realtors, allowing them to send emails to buyers. These scammers pose as attorneys for the title company or colleagues of the realtor and instruct the buyer to send their down payment cash to an alternative bank account. Experts advise buyers to be concerned about any last-minute changes and to call the company directly to confirm details before taking unforeseen actions. If you lose money in such a scam, call the police immediately.