Housing Costs in Louisiana
For the average listing prices in the United States based on prices ending the week of December 15, 2010, Louisiana falls below the average rate. Louisiana’s real estate rates or prices ranges from $183K to $229K; it has the same rates with North and South Dakota, Nebraska, Kansas, Oklahoma, Missouri, Arkansas, Mississippi, Michigan, Kentucky, and West Virginia. It is just right above the rates for Iowa, Indiana and Ohio which have the prices $183k and below. Alaska, Maine, North and South Carolina, Illinois, Nevada, Oregon, and Idaho fell on the average rates which ranged from $275K to $336K. On the other hand, on top of Louisiana’s range of rates are states Arizona, Texas, Minnesota, Wisconsin, Tennessee, Alabama, Georgia, and Pennsylvania amounting from $229K to $275K. The rest of the states are above the average having California, Montana, Wyoming, Colorado, Connecticut, New Jersey, Massachusetts and New York on top of the list with rates $427K and above.
Louisiana Compared to the Rest of the Nation
However, on the basis of the median sales price, dating from August to October of 2006, the state of Louisiana belonged to the average rates with the amount of $143K to $175K. Other states belonging to the same range of sales prices are Alabama, Iowa, Maine, Montana, Nebraska, Georgia and Texas. Above and below the average rates were also grouped into different sets of ranges. Below is the list of the sets of the ranges of the median sales prices with the corresponding states belonging to the range (except for the average).
- (High) $223K and above : Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Hawaii, Illinois, Maryland, Massachusetts, Nevada, New Hampshire, New Jersey, New York, Oregon, Rhode Island, Virginia, and Washington
- $199K to $223K : Alaska
- $175K to $199K : Minnesota, Pennsylvania, and Wisconsin
- $120K to $143K : Arkansas, Kentucky, Michigan, New Mexico, North Carolina, Ohio, South Carolina, Tennessee, Utah, and Wyoming
- $96K to $120K : Oklahoma, South Dakota, and West Virginia
- (Low) $96K and below : Idaho, Indiana, Kansas, Mississippi, Missouri, and North Dakota
Best Cities and Fastest Growing Cities in Louisiana
Population is one of the bases of the popular cities where people live in. When based on the population, New Orleans has topped in the state which is also the third in the whole nation. It has a population of 484674. It is then followed by Baton Rouge, Shreveport, Metairie and Lafayette with 227818, 200145, 146136, and 110257 residents, respectively.
Moreover, when it comes to the climate, Baton Rouge, Bossier City, Houma, Kenner, Lafayette, Lake Charles, Iberia, New Orleans, Shreveport, and Slidell are the best. When in terms of economic performance, Bossier City topped the ranking followed by Lafayette and then Alexandria, Lake Charles, Monroe and Shreveport.
Fastest Growing Cities
The fastest growing cities of the state include Baton Rouge. Baton Rouge is the capital city of the state and has been one of cities in the state which had a strong economy. The city’s excellence in economy has brought awards to the state through different recognitions. The city being also the second largest city in terms or its area has its population growing faster next to New Orleans. The city is the home of the Louisiana State University and it’s one of the greatest cities where one can buy real estate. Another city is Houma, which is also recorded as one of the fastest growing cities in America in year 2010. The city has been recognized because of its growth in terms of its economy and employment rate. The city was able to reach an unemployment rate of 4.8% which is lower than the national rate for unemployment. Its economy is rising due to its seafood production, tourism, medical industry and a large portion on oil. One also of the fastest growing cities is the New Orleans. New Orleans has been growing not just in population. It has also been growing in terms of its income. The city’s income has dramatically changed and increased to 16.9%.
Type of Mortgages Offered in Louisiana
For each state, there has been a different set of rules and laws. There are applicable laws in a particular state that could not be applicable in another state. It is also the same with real estate and mortgages. There are different rules and laws in processing loans and applying for mortgages in each state. Below is the list of the types of mortgage loans offered in Louisiana:
Fixed Rate Mortgage Loans
A fixed rate mortgage loan assures you that whatever the changes in the market would be, the rate is guaranteed not to change. This may come in a fixed monthly bill, depending on the agreement with the lender.
Adjustable Rate Mortgage Loans
This type of mortgage has more risk compared to a fixed rate mortgage. However, this is beneficial when rates in the market drop. When the rates drop during your mortgage period, you would have to pay lesser. On the other hand, when the rates suddenly rise, then you would have to pay higher, usually it is higher than the fixed rate.
LIBOR (London Interbank Offered Rate) Mortgage Loans
LIBOR is the interest rate that banks borrow from other banks in the London Interbank Market. With LIBOR, there is a protection granted to you from great fluctuations in interest rates with periodic and lifetime caps. Also, the LIBOR mortgage loans offer amortization benefits. One of these benefits is that it rarely gives negative amortization thus minimizes the money you owe.
Interest Only Mortgage Loans
This type of mortgage loan allows you to pay the interest of the loan on the first portion of your payment. This enables you to pay the principal, the total balance or refinance after paying the interest. However, this is not beneficial for people who have fixed incomes because there is a great possibility that after the interest period the monthly payments would rise significantly.
Cash Out Mortgage Loans
This type of loan allows you to refinance your loan. After paying your monthly bills, the principal amount you are going to pay substantially decreases. When this happens, you may then take another loan that could cover up your current debt.
Refinance Mortgage Loans
A refinance mortgage loan is applying for a new loan; that is, having a new interest rate and a new payment plan. This is similar to the cash out mortgage loan; however, the refinance mortgage loan enables you to change the type of loan you are in, that is, changing from an adjustable rate mortgage (ARM) loan to a fixed rate mortgage loan. However, getting involved with refinancing will cost you some amount of money. There are fees that you must pay in considering refinancing such as the appraisal fees, the legal fees, processing fees and the administrative fees. Some companies might wave these fees but carefully read the agreement first before signing the papers, most of these companies will compensate the fees waved through the interest they put on your new loan.
Home Equity Loans
Home equity loan is an amount of cash that a borrower receives as soon as the loan has been closed. It is a type of a second mortgage that homeowners may get by being able to leverage the equity built on their homes. One benefit that satisfies borrowers is that it provides them to an easy access to cash. However, this type of mortgage has a higher rate of interest compared to the first mortgage. The mortgage can be granted to those who would like to apply for reasons to improve or repair the house or to pay for emergency medical bills.
Second Mortgage Loans
Second mortgage loan is about applying for another loan to own another house. Thus, it is important for you to consider the rates, the time and your income to be able to avoid foreclosure of units.
Reverse Mortgage Loans
This is another alternative of a second mortgage loan or HELOC. This type of loan is granted to the elderly or to homeowners aging 62 and above. This enables the homeowner to translate the home equity into cash.
Home Equity Line of Credit Mortgage Loans (HELOC)
HELOC is different from other types of second mortgage loans. It enables you to borrow money provided that it does not exceed the pre-determined positive balance you have. The system is like owning a credit card; you pay for what you owe plus the interest.
Some special mortgage loans are also offered in Louisiana such as:
Jumbo mortgage is recommended to those who would like to borrow an amount more than $417K. This enables you to buy any kind of residence and pay the amount for a number of different plans.
No Doc/Stated Income
This kind of loan works for those who have low income yet have verifiable assets and employment. Refinancing can also be done in this loan through different rate or term.
COFI (Cost of Funds Index)
COFI is a slow reacting index based on interest paid on savings accounts; it reacts slowly to the market. This is a kind of adjustable rate mortgage which is tied to the COFI index.
COSI (Cost of Savings Index)
This is also a kind of adjustable rate mortgage which enables you to take advantage of the interest rates that change in the market.
12-MTA (12 Month Treasury Average) Mortgage Loans
This new alternative for COFI, fluctuates more than COFI, however they are generally similar. Moreover, there is a potential for negative amortizations in 12-MTA just like COFI.
Balloon ARM (Adjustable Rate Mortgage)
This type of loan has a different schedule on payments. The first part of the payment period will be of low monthly rates, however on its latter part, you are expected to pay the balance.
125 Home Equity Loan
This type of loan enables the borrower to take a large amount of loan, which is, amounting up to 125% of the home’s value minus the first mortgage balance.
FHA (Federal Housing Association) Streamlined
This type of loan is used by those borrowers or homeowners who are planning to refinance.
Home Improvement Loan
You can apply for this type of loan for those who are planning to improve or repair some parts of the house which they cannot afford. This is also applicable for those who plan to sell the house but upgrade it first for higher appraisal rates.