Although there are plenty of lenders to tap into for your mortgage, not all of them are the same. Each lender has its own range of mortgage products, minimum qualifications, coverage terms, and quality of customer service. Choosing the right lender can spell the difference between a smooth, hassle-free home buying experience and a stress-filled one where you potentially waste a lot of money.
In this article, we will tell you what factors to consider in your search for a lender, plus give our top five picks, to help you jump start your new life in Idaho.
What To Consider When Choosing A Mortgage Lender
In the search for a good lender to help finance their purchase, most consumers think that it means going for the one with the lowest interest rate. While this can be a good first step, there are actually many other factors to consider, such as:
There are actually many types of home loans available, each of them designed to cater to different types of customers. To get the most out of your home loan and save money, it's important to get the one that best suits your needs.
Conventional loans: These are mortgages offered by private or non-government entities. If you have a good credit score, stable employment, and at least a 3% down payment, you can typically qualify for one.
Federal Housing Administration (FHA) loans: An FHA loan is one of three government-insured mortgages. Credit score requirements for these are more relaxed, which makes this an attractive option for first-time homebuyers. However, take note that you’ll also need to pay for a mortgage insurance premium (MIP).
Veterans Affairs (VA) loans: A VA loan is another type of government-insured product available for active members of the military, veterans, and their spouses. With a VA loan, borrowers enjoy better interest rates, lower closing costs, and no required down payment or insurance premiums.
U.S. Department of Agriculture (USDA) loans: These are available to folks in rural areas from low-income households, who often do not qualify for conventional loans.
Conforming mortgage loans: These are mortgages that fall within government-sanctioned loan limits. To date, the conforming loan limit (CLL) is $548,250. While most counties in Idaho follow this limit, there are a few counties (namely Blaine, Camas, Lincoln, and Teton) where the CLL is set higher.
Jumbo loans: This is a loan that goes beyond conforming loan limits. Since there is an increased risk to lenders, borrowers must have stellar credit scores to qualify and should be prepared to shell out 10% to 20% (or higher) down payment.
Fixed-rate loans: These have a fixed interest rate for the entire life of the loan (10-30 years on average). Because the amount never changes, this makes it easier for homeowners to include it in their monthly household budget. This is ideal for consumers who plan on staying in their homes long-term.
Adjustable-rate mortgages: ARMs have a fixed interest rate for the first 10 years, after which it fluctuates depending on market conditions. Interest rates for ARMs are usually lower early on in the repayment period, which makes it an ideal option for those who plan on moving soon.
Mortgage refinance: Refinancing involves taking out a new loan to pay off your current one. This is often done to consolidate debt, save money through better rates or terms, or leverage home equity.
Since interest rates are always changing, they may not be the most reliable measure for a lender’s affordability. Instead, we look at a couple of other factors to measure this:
Minimum FICO score: While most lenders look for a minimum credit score of 620 or 640, some take borrowers with credit scores as low as 500. This allows those with bad credit, who may not have otherwise qualified for most loans, to purchase a new home.
Minimum down payment: Most lenders ask for 20% of the property value as a down payment, but some accept as low as 3% down with additional private mortgage insurance.
Closing costs: These are additional fees on top of the principal amount for your new property and the down payment for your loan. These can include underwriting fees and taxes, among other things. Some lenders have low or no closing costs or may include them in your monthly amortization, while others even offer closing cost assistance. This means a lighter hit to your budget in your early days of purchase.
First-time homebuyer programs: Each state has financial assistance programs to help out first-time homebuyers who may not have the credit score to qualify for a conventional loan. However, a lot of private lenders also offer similar packages with more relaxed requirements and other potential benefits, such as closing cost assistance. In Idaho, an example of this is the Idaho Housing and Finance Association, a private entity that can help connect you to lenders that can give you low mortgage or refinance rates.
The application process can also make or break your home buying experience. You’ll want to prioritize convenience – look for a lender that makes it easy to apply or search for information about its offers and has a loan officer you can easily contact. For this, you’ll want to consider the following:
Can the application be done online? For people who aren’t too keen on the idea of multiple paperwork runs, some lenders make the application process more convenient by having it done fully online.
Does the lender show rates online? Mortgage rates are a straightforward way to compare lenders apples-to-apples. There are websites that aggregate this information, allowing you to review and compare rates between lenders at just a glance. Zillow.com is a great reference for average rates in each state, including Idaho. The site refreshes daily, so you can be sure that you’re getting up-to-date information.
How long does the application process take? The Idaho housing market is a fast-moving one, and just one additional day can mean losing out on some great deals. To avoid this, you’ll want to ask prospective lenders about their average time frame between submitting your documents to when the loans close.
Even if a lender offers the best rates and terms, it’s moot if they don’t service your area. We also look at the number of physical branches a lender has, as this makes face-to-face interactions easier and more accessible.
If you prefer to work with lending companies associated with the Idaho Housing and Finance Association, you can find physical locations on the IHFA website.
Customer Service and Satisfaction
Since you and your lender will be partners for the entire life of the loan, you’ll want to choose a firm you can trust to give you a fair deal and good service. For this criterion, we look at the assessments of two major organizations.
J.D. Power is a market research and data analytics firm that releases an annual report of its customer satisfaction studies across different industries, including the mortgage industry.
The Better Business Bureau (BBB), on the other hand, is a private, non-profit organization that assigns ratings to businesses on a letter grade scale from A+ to F. The ratings are based on an organization’s marketplace behavior, which includes how the business responds to customer complaints, transparency, truthful advertising, and more.
Top 5 Idaho Mortgage Lenders
Now that we have a better understanding of what to look for in a lender, here is a quick look at 5 of the top mortgage lenders in Idaho:
Veterans United Home Loans
Bank of America
Caliber Home Loans
Fast turnaround, bad credit
Large loan amounts
Conforming mortgage loan
Min. credit score (FICO)
640 (for VA)
580 (for FHA)
Min. down payment
BBB rating (A+ to F)
JD Power rating (out of 1000)
1. Fairway Independent – Best For Product Availability
With 25 years of experience, Fairway Independent is an industry leader well-known for its variety of loan options, which includes refinancing programs for an existing mortgage.
Its website has resources available for free, such as a homebuyer's guide and mortgage calculator, which lets you calculate an estimate on your own. Fairway also offers digital services through its FairwayNow mobile app, where users can submit applications, scan and upload documents, contact their loan officer, and calculate their monthly payments.
The only downside is that Fairway’s mortgage rates and fees are not available online. However, it’s easy to contact an agent through its website, email, or on the phone.
Availability: Fairway operates in all 50 states and has 18 physical branches scattered throughout Idaho.
2. Guild Mortgage – Best For Fast Turnaround / Bad Credit
Guild Mortgage boasts a 17-day closing guarantee after pre-approval, which is a blink of an eye compared to the industry average of 51 days.
Like Fairway, it also boasts a wide selection of products to finance your new home, including bridge loans and down payment assistance programs. Guild also lets you apply with alternative forms of credit, making this a good choice for those with bad credit or no credit.
For online options, you can file your application and submit documents for pre-approval through Guild’s MyMortgage portal. Take note, however, that Guild does not post its mortgage rates online and closing will need to be done in person.
Availability: It operates in all states except New York and New Jersey. Guild has 10 physical offices in Idaho.
3. Veterans United Home Loans – Best For VA Loans
Veterans United’s website is easy to navigate and answers all of the basic questions you might have about VA loans, such as eligibility requirements and current rates. For those who aren’t keen on reading walls of text, there are also short videos to walk you through how to apply and avail of a VA loan.
It’s not just for VA loans either – this lender can also be a viable option if you’re looking for a conventional, FHA, or USDA loan. It has flexible qualification requirements, which can translate to higher maximum debt-to-income or loan-to-value ratios, depending on the borrower’s circumstances. And for those with low credit scores, Veterans United accepts alternative forms of credit and even has a free consulting service to help improve your score.
Veterans United also has a strong online system. On the My Veterans United portal, users can apply for pre-approval, file applications, submit documents, check application status, and more.
Availability: It operates in all 50 states, but only has 18 physical branches in the US. The Idaho branch is located in Mountain Home.
4. Bank Of America – Best For Large Loan Amounts
Although known more for its banking services than its mortgage offerings, Bank of America was actually one of the ten biggest mortgage lenders in the U.S. in 2020.
Bank of America offers a variety of options suited to finance all types of borrowers, with all the rates displayed on its website. There are also options for low-income and first-time homebuyers, such as home grant programs and 3% down payment plans.
If you already have an account with Bank of America and participate in its Preferred Rewards program, you can enjoy discounted origination fees and home equity interest rates. To enroll in the program, you need a minimum of $20,000 across all your accounts with the bank.
Take note, however, that a good credit score will be necessary if you’re hoping to get a loan from this bank. BoA is also the only lender on this list that isn’t partnered with the Idaho Housing and Finance Association.
Availability: Bank of America has 2 locations in Idaho with multilingual support.
5. Caliber Home Loans – Best For Online Services
Caliber offers a variety of conventional loans to help finance your home. It even has low down payment options and some with lower credit requirements.
For people who are seeking the ultimate in convenience, Caliber has an online portal that allows you to process your application remotely, plus a free mobile app with a whole suite of functions. You can access your account, upload documents, view the status of your home loan, and even contact your loan officer wherever you are.
There are no rates listed online, though, so you will have to contact one of its agents to get an estimate.
Availability: For those who prefer to visit a brick-and-mortar office, Caliber has 5 locations in Idaho.
In summary, the search for a good lender is more than just looking for the one with the lowest interest rate. There are many things to consider, like the type of loan, down payment and associated costs, taxes, payment schedule, refinance options, and whether to hire a broker. It is important to choose a lender you trust, as you will be partners for the entire life of your loan.
Buying a house is a big investment, so it pays to understand exactly what you’re getting into. If you want to understand mortgages and Idaho housing loans better, contact Wesley Mortgage, LLC today and let us help you make an informed, confident decision!