Your down payment won’t be your only out-of-pocket cost during the home buying process. Even if you qualify for a low down payment, you’ll still need plenty of cash on hand when purchasing a house.
Do your homework and work with an experienced, local real estate agent to ensure you have realistic expectations and are prepared before you pull the trigger on a home purchase. If you’re moving to Idaho, it’s important to be prepared for all of the costs you’re going to face.
Want to connect with a top-rated, Idaho buyer’s agent? Clever can help! Fill out our online form and we’ll be in touch to answer any questions you might have and introduce you to one of our local Partner Agents for a no-obligation consultation.
Closing Costs for Idaho Homes: What to Expect
If you’re closing on a home, you’ll find a number of small items add up to your total closing costs. Closing costs include things like loan origination fees, appraisal fees, taxes, title insurance, and more.
Mortgage fees add up quickly. According to recent data from Bankrate, Idaho buyers have to pay an average of $951 in origination fees and $1,073 in third-party fees, for a total of $2,023. However, this study didn’t account for a number of variable costs, like title insurance, title search, taxes, other government fees, escrow fees, and discount points.
As a general rule, buyers should expect to pay between 2% and 5% of the final purchase price in closing costs. The median home value in Idaho is $263,700, so buyers can expect to pay in the range of $5,274 and $13,185.
Common Closing Costs for Idaho Home Buyers
There are several common costs that all Idaho buyers can expect to see.
Mortgage Origination Fees
Your mortgage lender or bank will charge origination fees to create your loan. Generally, loan origination fees are around 1% of the total mortgage amount.
Depending on your creditworthiness and the risk factor of the loan, the amount of your mortgage origination fees may be negotiable. The more collateral you put up and the higher your FICO score, the more likely you’ll be able to negotiate.
The appraisal fees are the costs of having a professional appraiser assess the value of the real estate. These fees are usually paid by the buyer and typically cost between $300 and $500+, depending on the location, property size, and type of property.
Title insurance protects you from losses from defects in the title, like outstanding taxes and liens from previous owners. Essentially all mortgage lenders and banks require title insurance, and even if you’re paying cash, it’s still an important thing to have.
There are two types of title insurance policies. The lender’s policy protects your mortgage company’s investment. The owner’s policy protects your investment. Customarily in Idaho, the seller pays for the owner’s policy and the buyer pays for the lender’s policy. It’s a one-time fee you’ll pay at closing.
Discount points are a type of prepaid interest paid by the buyer at closing. Discount points can be purchased up front to reduce the interest rate charged by your mortgage lender.
Private Mortgage Insurance (PMI)
Private mortgage insurance, or PMI, is another closing cost for buyers. PMI is required for all home purchases with a conventional loan and a down payment under 20%.
If a buyer forecloses, PMI protects the lender from losing money. PMI fees vary, but are generally somewhere around 0.3% to 1.5% of the original loan amount annually. For a median Boise home worth $213,700, buyers should expect a PMI between $641 and $3,200.
Your lender may require you to prepay things like property taxes and homeowners insurance. Prepaid costs are some of the buyer’s closing costs that are paid in advance. Your lender will list these costs in your closing cost estimate, called the Good Faith Estimate. Your Good Faith Estimate will be given to you within three days of applying for a loan.
You’ll need to get the property surveyed. A surveyor charge is usually between $350 and $500.
When you’re buying a home, you need to get it inspected. Home inspections are required by most lenders, but they’re also a smart thing to do before buying any property. A home inspection will ensure that the home’s foundation is strong and there are no hidden pests or problems. A typical home inspection costs somewhere in the range of $300 to $500.
Additional Miscellaneous Costs
Other common closing costs include a credit report fee, flood certification fee, loan closing fee, tax tracking service, attorneys fees, and homeowners association fees.
Other Costs to Consider
In addition to closing costs, you’ll have to cover all of the costs associated with moving, including movers and trucks. If you’re moving into a larger home, you’ll have rooms to furnish. And depending on what you negotiate with the seller, you may have large home appliances to purchase.
There are also a number of recurring costs associated with being a homeowner. In addition to your mortgage, you’ll need to pay for homeowners insurance, utilities, maintenance costs, and property taxes.
The exact amount of property tax that Idaho homeowners can expect to pay varies throughout the state, but Idaho property taxes are lower than real estate taxes in most other states. For example, the average effective property tax rate in Boise is 0.58% of the home’s assessed value, while the average effective rate in Bonneville is 0.77% of the assessed value.
It’s important to be sure you’re financially stable before you buy a house. If you’re unsure of the annual costs of owning a home in Idaho, look to your realtor for guidance.
How to Save on Closing Costs in Idaho When Buying a Home
1. Idaho Closing Cost Assistance Programs
The Idaho Housing and Finance Association offers forgivable grants to home buyers to help cover closing costs. These grants are part of the HOME Down Payment Closing Cost (DPCC) Assistance program. Unlike many other programs, Idaho Housing has no requirement that you be a first-time buyer to qualify.
There are also local and federal closing cost grants available, depending on where you live and the type of property you purchase.
2. Negotiate Closing Costs With the Seller
Closing costs are often part of the purchase agreement negotiation. If you’re willing to give the seller something they want, like a quick closing, you may be able to get them to take on more of the closing costs. Some of the costs that buyers and sellers typically negotiate include home inspection costs, appraisal fees, title insurance, attorneys fees and requested repairs.
3. Work With an Expert Real Estate Agent
In order to get the best deal possible, it’s important to work with a local expert. Realtors know how best to navigate the home buying process. Clever Partner Agents are experienced negotiators and can help you save money at every step of the way.
4. Get a Home Buyer Rebate
Idaho buyers may be able to save money with a Home Buyer Rebate. A Home Buyer Rebate, or commission rebate, is when a real estate agent gives a portion of the commission they receive from the seller back to their client. The buyer can then use this money for their down payment, closing costs, mortgage payment, or even cash at closing. Partner Agents offer $1,000 back to eligible buyers on homes over $150,000.
Get in touch with Clever’s network of real estate agents today to find out if you qualify for a home buyer rebate.
Learn More: How to Get a Home Buyer Rebate