How to Buy a House in Louisiana: A Homebuyer’s Guide
Updated: October 14, 2023
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According to a study conducted by Zillow, the median home price in Louisiana is $217,587. Louisiana's property value is significantly lower than the national average, which is $357,589.
In addition to being lower than the national average, this median value has increased by 10.5% year-over-year (a significant difference compared to 13.5% nationally).
Before you commit to a property purchase, it is critical that you understand how to buy a home. This will save you from being overwhelmed and making mistakes during the process. In order to help you purchase a property in Louisiana without falling into serious debt, MoneyGeek has broken down the process for you.
Choose an Ideal Location
Consider the location of your new home when deciding where you want to live. The cost of a house depends largely on location, so it is crucial to research your desired neighborhood or area before you start shopping for homes.
Location affects the cost of homes based on factors such as neighborhood culture, access to amenities and recreational activities as well as the cost of living.
Calculate Mortgage Rates
There are many different types of mortgages, and they vary depending on your income, loan term, interest rates and loan amount.
Mortgage rates are also determined based on the borrower’s credit score, the type of mortgage and the down payment. A homebuyer can even choose from fixed-rate mortgages or adjustable-rate mortgages.
Prepare Down Payment Requirements
Borrowers are often required to make an upfront payment before they can buy a home. This is called the down payment. The amount required depends on the mortgage type and can affect the total cost of the loan.
Amounts can be as high as 20%, but there are some loans that don’t require any down payment.
Get Pre-Approved for a Mortgage
Getting pre-approved for a mortgage will allow you to shop with confidence and know your budget.
Being pre-approved means that the lender has already looked over your finances, budget and credit history in order to determine that you are qualified for the loan amount you request. It is different from prequalification, which is just an estimate of what they think you might qualify for.
Conduct a Home Inspection
Home inspections are one of the most important steps in the homebuying process. They can provide you with peace of mind and save you money down the road if something goes wrong.
A home inspection is basically an impartial evaluation of the condition of your future house. Inspectors typically check for structural issues, hidden mold, pest infestations and other things that could impact your health or property value.
Close Your Mortgage Loan
After reviewing the terms of your mortgage, you can proceed to the final step of closing your mortgage loan.
There are also costs associated with closing, which vary from one lender to another but generally include the loan origination fee, document preparation fee, title examination fee and lender’s title insurance premium.
Louisiana Homebuying Details
Buying a home is an exciting prospect, but it can also be overwhelming. It's important that you understand the process and what you need to do before making an offer on a property. Louisiana homebuyers should look into the neighborhood of their new residence, evaluate various mortgage options and shop around for a lender that best meets their needs.
While these are general measures to take when purchasing a property, there can be Louisiana-specific practices. Reach out to your lender or a real estate agent so you can be ready for Louisiana's homebuying process.
Residents of Louisiana may also apply for homeowner assistance programs to help them with homeownership expenses.
The Louisiana Housing Corporation’s Delta 100 program provides qualified buyers with up to 100% financing as well as up to 3% closing cost and prepayment assistance. Eligible borrowers must attend a homebuyer education course, fulfill minimum investment criteria and have adequate cash reserves to qualify.
The Louisiana Housing Corporation provides Mortgage Revenue Bond Assisted and Home Programs. This program assists low-income homeowners at 80% AMI or less with down payments and closing fees. The program features below-market interest rates. Depending on loan size, down payment and closing cost assistance is 5% to 9%.
Frequently Asked Questions About Buying a Home in Louisiana
The process of buying a home in Louisiana can be overwhelming, especially for first-time homebuyers. MoneyGeek answers some frequently asked questions about buying a house in Louisiana.
When shopping for a home in Louisiana, it's important to ask yourself some critical questions to guide your decision-making process. These include:
- How much can I afford?
- What are my housing needs and wants?
- What kind of mortgage am I eligible for?
- Do I have enough down payment money to put down on the property purchase?
Buying a house can be an exciting experience but a significant financial commitment. Generally, buying a house in Louisiana is a good idea because the state has some of the lowest property taxes in the country. It's important to weigh your options before you commit to anything because other factors can impact the homebuying process.
The median home's value has increased by 10.5% in Louisiana over the past year. If prices continue to go up, purchasing a home in the state might be a good idea. However, the housing market can be unpredictable, so be cautious with this type of investment.
Many factors come into play when determining how much income you need to buy a house, including how much money you have saved up for the down payment. Most lenders usually require a 20% down payment on a home purchase.
Louisiana's average real estate tax rate is 0.54%, with an annual average property tax of $925. However, your tax rate might vary based on your location.
According to Zillow’s rankings, Simmesport is one of the cheapest cities in Louisiana when it comes to home prices.
sources
- Louisiana Housing Corporation. "Market Rate GNMA Program." Accessed October 21, 2022.
- Louisiana Housing Corporation. "Homebuyers." Accessed October 21, 2022.
- Louisiana Housing Corporation. "Down Payment Assistance Programs." Accessed October 21, 2022.
- Louisiana State Board for Home Inspector. "Home Inspection Standards of Practice." Accessed October 21, 2022.
- Louisiana State Board for Home Inspector. "The Louisiana Home Inspector Licensing Law." Accessed October 21, 2022.
- New Home Source. "Top 10 Most Affordable Cities in Louisiana." Accessed November 26, 2022.
- REAB. "Louisiana Residential Real Estate Appraisal Fees 2016." Accessed September 21, 2022.
- Tax Foundation. "Tax in Louisiana." Accessed October 21, 2022.
- U.S. Department of Agriculture. "Single Family Housing Direct Home Loans | Rural Development." Accessed October 21, 2022.
- World Population Review. "Louisiana Population." Accessed September 21, 2022.
- Zillow. "Compare Today’s Interest Rates in Louisiana." Accessed November 26, 2022.
- Zillow. "Louisiana Home Values." Accessed November 26, 2022.
- Zillow. "United States Home Values." Accessed November 26, 2022.