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Mortgage interest rates were very low for years, but they’ve been on the increase over the recent past. That said, rates have since plateaued and even started to decline, and experts anticipate rates to continue declining into 2024 and 2025.
Considering this, will homeowners in Idaho continue to refinance their home loans? What will be the trend in ID in 2024? Is 2024 the year that you should refinance your mortgage in Idaho?
As of January 2024, the average price for a home in Idaho is $434,224.While values for homes in the state have dipped over the past 12 months, they have increased 72% over the past 5 years and are expected to continue increasing over the next 12 months.
With property values on the rise homeowners are benefiting from increased equity in their homes simply from appreciation.
Interest rates for mortgages are also high, though they’re starting to come down a bit. Right now, rates are hovering around the 6.61% mark as of the end of 2023. It remains to be seen where rates will be by the end of next year.
Considering the price appreciation of homes in the state along with high (though decreasing) interest rates, is now still a good time for homeowners to take out a cash-out refinance to tap into their home equity?
Homeowners may still be able to lock in at a much lower rate compared to what they may be currently paying on their mortgage today. If the rate they initially secured is lower than what they can get today, homeowners can still save quite a bit on interest over the life of their loan when refinancing.
The funds obtained from a cash-out refinance can then be put to good use for things such as home renovation projects that can help put even more value into their homes.
It’s anticipated that cash-out refinances could be an ongoing trend in Idaho through 2024.
Here is some up-to-date insight on cash-out refinancing and home-price trends in Idaho.
“Cash-out refinancing” is a type of refinancing program in which homebuyers take out a mortgage that’s larger than the original loan amount on the current mortgage they are paying. The difference between the two loan mounts can be converted into cash and can then be used to put towards a myriad of expenses, including home renovation projects and car repairs, among other expensive expenditures.
Considering the fact that home prices have appreciated quite a bit in Idaho throughout the years, homeowners who have been diligently paying their mortgages throughout this time have been able to take advantage of a hike in home equity. That equity can be tapped into and converted into cash through a cash-out refinance program to be used for various needs.
If the rate that you locked into when you initially secured a mortgage is higher than today’s rates, you may stand to save quite a bit of money in interest, in addition to the benefit of accessing liquid cash from your home equity.
To illustrate how much money you can save by refinancing at a lower rate, let’s assume you currently have an outstanding balance on your original mortgage of $250,000, and your home’s current value is $450,000.
That means you have $200,000 in equity in the home. You may be able to refinance your home more than the $250,000 that you still owe. If, for example, you need $50,000 to cover a pressing expense, you can tap into your home equity to access that amount. Then, you may refinance your mortgage for $300,000, which is the sum of the $250,000 you still owe plus the $50,000 you require in cash.
This is a simplified example of how a refinance works, but it should give you an idea of how you can use your home equity to convert into cash. Your mortgage specialist will be able to explain all the variations of refinancing programs that may be available to you.
Related: Cash Out Refinance After a New Purchase?
Interest rates are higher these days than they were the same time last year, but there may still be a chance that the rate you are paying on your current mortgage is higher. As of late December 2023, the current rate for a 30-year fixed-rate mortgage is 6.61% If the rate you locked in at is higher, you could stand to save quite a bit of money if you were to refinance.
Let’s illustrate how this could work. Using an example of a $250,000 mortgage with an interest rate of $4.89% on a 30-year fixed-rate mortgage, you would be paying $227,107 in interest over the entire loan term. If you locked in at a rate of 2.65%, you would be paying $111,981 in interest over the same loan term on the same loan amount. That’s a difference of $115,126.
As you can see, even a small difference in interest can mean huge savings.
Related: Time The Market: When To Refinance And Lock A Rate
Idaho homeowners can use the money obtained through a cash-out refinance for many reasons, including the following:
Homeowners have many reasons to consider a cash-out refinance in Idaho. That said, it’s important for you to assess your situation to determine whether or not this program is right for you, especially in 2024. You’d be well-advised to consult with a mortgage specialist to help you make that important decision.
If you’re curious about cash-out refinancing and wondering if it’s right for you, Sammamish Mortgage can help. We are a local mortgage company based out of Bellevue, Washington that serves the entire state, as well as Oregon, Idaho, and Colorado. We’ve been helping borrowers since 1992, and we’d love to help you too. Our mortgage financing professionals can work with you to help you determine if cash-out refinancing is right for you, or any of our other mortgage programs — including our Diamond Homebuyer Program, Cash Buyer Program, and Bridge Loans — may be a better fit. Contact us today with any questions you have about refinancing in Idaho.
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.