Living in North Idaho can be as good as a dream, so the housing market is booming and hot in the area. Buying a house in North Idaho is considered to be a milestone for most buyers and thus the buying process might take some time.
Especially for first-time buyers, buying a home in North Idaho might be especially challenging. To guide you through the process and give your search a proper direction, we have brought you a buyers guide with eight steps to buying a house in North Idaho.
1. Saving up money for the down payment
Down payment is what you pay at the closing. It is a percentage of the purchase price that needs to be paid by the buyer, while the rest of the fee is paid by the mortgage company at the end of the home buying process. The minimum down payment that lenders in North Idaho need you to pay maybe somewhere near 20% of how much the house costs.
Thus, before even starting with your search for the perfect house, you have to save money to pay your down payment.
If you are struggling with the down payments, there are ways to reduce them.
To reduce your down payment, there are certain government-backed loans like VA loans or an FHA loan, or a Federal Housing Administration loan. A conventional home loan can work in your favor too.
2. Getting your pre-approved Mortgage
If you are buying a house in North Idaho, most sellers across the region will only entertain your offer if you have a pre-approved mortgage letter. A pre-approval is basically a written offer from a mortgage lender that they are willing to lend you money for the purchase of a home. A pre-approval is proof that the buyer is actually financially capable to buy a house and thus should be considered to be a serious buyer.
The best way to choose a mortgage lender is to not choose and finalize one in haste. So, get pre-approval from multiple mortgage lenders and compare their mortgage amounts and interest rates to make sure that you are getting the absolute best deal.
Leaders consider certain aspects of an applicant to ensure that the applicant is indeed eligible for a mortgage. Those aspects are;
Without a proper and stable income, you cannot really afford to pay the mortgage installments. Thus, the mortgage broker checks how much money you make every month to make sure that you are eligible for the offer since you make enough money to pay for the mortgage. The mortgage lender calculates the ratio of your monthly mortgage payments and your gross monthly income to make sure that it is less than 28% for you to be eligible.
Secondly, the mortgage lending services will check for your debts. The debt includes any kind of debt that you have, for example, a vehicle loan, student loan, personal loan, and credit card bills. The lender then calculated the debt to income ratio; your total debt divided by your total income. In most cases, the mortgage application gets approved if the ratio is less than 48%, but for safety, it is always advisable to keep your balance under 36%.
The best way to achieve a low debt to income ratio is by paying off some of your debts and then planning to buy a house and applying for a mortgage loan.
A Mortgage banker will also check your cash reserves to ensure your eligibility during a conventional loan procedure. They will limit how much money is in your bank account to ensure that you can pay for your downpayment and your closing costs without completely exhausting the cash reserves.
However, the required criteria for different lenders may vary according to their company policies. Most lenders will consider you eligible if you have enough money to cover two monthly payments with mortgage insurance and taxes.
3. Finding your ideal location and locality in North Idaho
Finding your dream house that matches all your requirements is important, but what people don’t realize sometimes is that the location and the locality it is in matters greatly. The neighborhood you live in affects your lifestyle and can even become the deciding factor in your quality of living.
Since North Idaho has a housing market that has been pretty hot for the last couple of years, you may find for a fact that most homes are pretty expensive in the region. For first-time buyers, choosing the locality becomes even more important in such situations as it ensures that you make the most out of your purchase and live peacefully in the home after you own it.
Here are some factors to consider while choosing your locality;
How much is your budget?
Some neighborhoods can be more expensive than other neighborhoods. The expensive localities will naturally have homes in a higher price range.
After you get a mortgage pre-approval, you will get a tentative idea about how much the lenders are going to lend you. This will help you set a buying range. After that, you can simply narrow things down and choose the localities in North Idaho that are selling houses in your range.
Also, make sure to check the past trends of the locality to understand how much the value of your house can go up in the future. This ensures that when you decide to sell your home, you will get a good return on the sale.
What amenities and lifestyle does the neighborhood have?
After you have decided the budget and divided the neighborhoods according to the budget, now it is time to make sure that it has the kind of lifestyle that you need. To make sure that the amenities of the neighborhood match your requirements, consider these factors;
- crime rates
- the distance of schools and hospitals from the locality
- restaurants and cafes
- transportation and your daily commutation
4. Hiring a good real estate agent in North Idaho
The house hunting and buying experience that you will have in North Idaho directly depends on what kind of real estate agent you have selected for yourself. Hiring a great, knowledgeable, and experienced real estate agent in North Idaho will make your buying process easier by providing you with a list of the best houses in the region. They will also help you make offers and negotiate with the seller’s agent. They can also suggest the best title insurance companies, contractors, and home inspection specialists while also helping you navigate through the final walk-through and closing process.
There are many great and well-known real estate agents in Idaho real estate agent business who can help you explore the region, find the best home for you, and help you close the deal at the best prices with their expertise and negotiation skills.
The best way to choose your ideal real estate agent is through thorough research and interviews. The key is not to make haste and take your time with all the real estate agents and then eventually find the right one.
Check for these factors while choosing the right real estate agent;
- how many years have they been in the business?
- how many real estate transactions have they handled in the past year?
- what is their review score?
- how much experience do they have in dealing with houses in your price range?
- what do the individual reviews and complaints say about their services?
5. Finding your dream home in North Idaho
After you have hired a good agent, it’s time to begin with the actual work; house hunting in North Idaho. In this process, you get to see and explore many new homes and decide what you want in your new home.
Consider these important factors while going house hunting;
The difference between what you need and what you want
There is a huge difference between the things that you ‘need’ in your home and the things that you ‘want’ in your home.
Before you begin house hunting, make a list of all such things. Keep the things that are a must-have on the top of your list, as those should be your priorities over the nice-to-haves.
Understand the best time of the year to buy a house in North Idaho
The availability and the price range of houses can vary significantly depending on what time of the year it is. Historically, in North Idaho, the month of June has seen the most home sales during the year. Thus, starting your home search in June will find a greater variety and a lower price range.
6. Make your offer to the seller
After finding your ideal house, make your offer to the seller to take the deal forward. You can take the help of your real estate agent to make a lucrative offer to the seller.
Making an offer requires you to be a little conscious about the time. On average, homes stay on the market for 59 days in North Idaho. However, this period can change according to the year it is.
Historically, it has been observed that homes sell faster during the month of June. Meanwhile, the market becomes slower during December. If you have decided to hunt for the perfect house during June, make sure that you are ready to move in quickly and make your offer as soon as possible, as there is a chance that the house might get snatched.
The best way to navigate through the June housing market is to make offers on multiple properties and wait until one of those has been approved.
Things that your request should include
Take the help of your agent to understand the ideal option from these options to be included in your offer.
Closing a deal comes with closing costs that you have to pay. But, while making the offer, you can ask the seller to cover some of the closing costs for you. This is called the seller concession. By adding this to your offer, you can make sure that you are able to offer a higher price to the seller and include your closing costs in the mortgage.
If you realize that the house needs certain repairs before you start living there, you can ask for repairing credits from the seller rather than getting the repairs done. Usually, the repair job is a hassle for the seller, and thus they try to avoid it. So, the chances are that they will take your offer.
This also means that you can supervise the repairs yourself to make sure that they are good enough for you.
Home inspection contingencies
Home inspection contingencies are essential to make sure that the house is in good condition. This is the factor that gives the buyer the power to change the offer or even dissolve the offer at the last moment. However, if you are already confident about the condition of the house and have seen a recent inspection report, you can sweeten up the deal by letting the seller skip the contingency. This will make them feel a rare connection and a sense of confidence towards your offer.
A letter to the seller
A real estate transaction comes with a lot of emotions. The seller has lived in the house for years and thus is emotionally attached to it. So, try writing a letter to the seller assuring them that you will take care of the house and give them a picture of how you will live in the home to get on their sentimental side.
7. Home inspection
The next step is a thorough home inspection that will make sure that there are no hidden costs such as repairing costs and no hazards that may result in a harmful living environment. The inspection reports make sure that you get exactly what you are paying for.
Here are the essential elements that need to be inspected during an inspection;
- HVAC systems
- Testing for structural damages in the foundation
- Electrical lines
- plumbing system
- testing for mold and bug infestations
Essential testings in North Idaho
The housing regulations in the North Idaho market are not very strict, but there are certain essential tests that you should get done for the safety of you and your family that is going to live in the newly purchased house.
The tests include;
Radon testing is one of the most essential tests that you should run before you close the deal with the seller. Radon is a dangerous substance that can be a health hazard as it slowly leaks into the air and the water of the house. Since it isn’t mandatory for the sellers to run these tests in North Idaho, make sure you are running your own radon testing in the house you are interested in.
Inspection for Mold
Living in a mold-infested home can be a major health risk. Thus, make sure to run a thorough mold check before you have closed the deal. Get the testing done as soon as possible to make sure that the mold doesn’t spread.
8. Close the deal
You can finally close the deal as you are done with the inspections, deciding the appraised value, and your mortgage has been approved. The closing will include a title search before the transfer of the ownership.
There will be some paperwork to do afterward. The paperwork includes;
- closing disclosure statement
- the deed of the home
- mortgage promissory note
The closing ends with covering some closing costs. The costs may include;
- Prepaid costs
- Lender fees
- Title search fees
- Charges for the escrow account
- Earnest money deposit
- Miscellaneous costs including inspection costs, insurance, real estate attorney fees,
Buying a house in North Idaho can be a lengthy process, but the results can be very rewarding since the region is known for its ideal living conditions. Thus, you can make a clean real estate transaction with proper planning and following our step-by-step guide.