Home Mortgage Rates in Louisiana
Louisiana is a very beautiful state rich with color, culture, and character(s). It offers both large cities and small towns suitable for folks of all types looking for a new place to call home. Whether you are interested in land for farming, such as up north, prefer the scenic routes of middle Louisiana, life on the delta, or the dazzling New Orleans, there is truly something for everyone in the Pelican State.
Median Real Estate Prices throughout the State
Property prices really do vary throughout Louisiana. There are great deals out there spread all over the state, but for those who have a specific area in mind, that’s a great way to start.
Shreveport/Bossier City (northwest Louisiana) and Monroe (northeast Louisiana)
The Shreveport/Bossier City area is both beautiful and lively, with everything from scenic historic districts to an exciting nightlife scene. There are homes in this area for those looking for homes that are more luxurious; magnificent homes in the $750,000 dollar range are available in this area. For those interested in the other end of the spectrum, there are fantastic buys available for properties with land and quaint homes in the $50,000 range. The median home price in this area is approximately $170,000, compared to the national average home price of $177,900.
Monroe and its outlying areas offer quaint farmland and a more rural setting for those looking to be away from the hustle and bustle. Monroe’s beautiful setting places the perfect backdrop for real estate in the area; again, for those looking for something more luxurious, Monroe offers beautiful plantation-style homes in the million-dollar range; for those looking for properties that are a steal, cute homes on large lots can be found in the $15,000 to $20,000 range. The median home price in and around Monroe is approximately $111,000, compared to the national average of $177,900.
Alexandria/Pineville (western central Louisiana)
This area sits on the banks of the Red River and is deep in the heart of the state. With famous places like the Alexandria Zoological Park, marshes, swamps, and bayous teeming with wildlife such as alligators and cougars, and a Mardi Gras parade all of Alexandria’s own, this area is an excellent choice. Median home prices in the cities of Alexandria and Pineville are around $170,000; prices in the more rustic outlying areas, such as Boyce, are in the range of $135,000.
New Orleans (south western Louisiana)
For those looking to live in the Big Easy, prices are going to depend on which part of the city you are looking at. There are multi-million dollar mansions available in the French Quarter, and great shotgun house deals under $10,000. The median price of homes in the greater New Orleans area (excluding the French Quarter) is $153,000; the average price for properties inside the French Quarter is between $650,000 and $700,000.
Most Popular Places to Live
The most popular place to live in Louisiana is Terrebonne Parish, known as Cajun Country. This includes areas such as Chacahoula, Cocodrie, Oak Forest, Sarah Plantation, Magnolia Plantation, and Woodlawn. This area is very beautiful and historic, but can lack in job opportunities.
Another popular area is the northern area of Shreveport/Bossier city. There are more job opportunities, great dining choices, and a wide variety of housing options in this area. Bossier City is currently undergoing a great deal of suburban expansion, so it definitely has up-and-coming potential.
Fastest Growing Cities (and why they are growing!)
Houma, Louisiana is at the top of the list of the fastest growing Louisiana cities. In the heart of Cajun Country, located in Terrebonne Parish, Houma is the parish seat and economic center of its parish. Houma is famous for its food, swamps, music, and hospitality. It even has its own Mardi Gras celebrations! While Houma is at the southern end of Louisiana, it is close to the larger cities of New Orleans, Baton Rouge, and Lafayette, and the local economy, once dependent on the oil industry, is now thriving thanks to seafood production, tourists, and the medical industry. It currently has an unemployment rate of 4.8%, well under the national average of 9.7%. The average household income has risen over 25% in recent years, and the increase in households is more than 20% in the last ten years.
Houma is growing mainly due to the change in their economic situation. In the past, the majority of Houma’s employment as well as the smaller, unincorporated surrounding areas depended heavily on the oil industry and those industries touched directly by it. Recently, an increase in seafood fishing and production, as well as more tourism and an influx of medical professionals due to money received by the state from the federal government for storm-related damages has created a shift in Houma’s economic opportunities. With more high-paying professional jobs and more varied employment opportunities, residents from other, less economically diverse areas of Louisiana and its surrounding states are moving to Houma to take advantage of its offerings.
Types of Louisiana Mortgage Loans
There are many types of mortgage loans available to those looking to buy properties in Louisiana. Some of the most popular include adjustable rate mortgages, fixed rate mortgages, interest-only mortgages, balloon mortgages, jumbo loans, VA loans, and FHA loans.
- Adjustable rate mortgages (ARMs) are loans whose interest rates adjust at set intervals during the life of a loan. For instance, the interest rate on a monthly ARM adjusts once every month; sometimes the rate goes up, sometimes it goes down, and some of these loans have a cap that the rate cannot increase above.
- Fixed rate mortgages are just the opposite. The rate is fixed and a specific amount and stays that way for the entire life of the loan. If interest rates drop during this time, borrowers with a fixed rate mortgage are stuck paying the higher rate; adversely, if the rate rises, they continue paying the lower rate.
- Interest-only mortgages have borrowers pay only interest and no principle amount for a set amount of time. For example, some interest-only mortgages let borrowers pay interest-only for the first ten years of the loan, and then require them to pay interest and principle for the remaining ten years.
- Balloon mortgages include a rate and/or payment amount that changes over the life of the loan. Generally the rate and/or payment amount starts out low and gradually increases over time, with one or two substantially larger payments the last two years or so of the loan.
- Jumbo loans are mortgages with loan amounts that are substantially higher than conventional lending limits will allow. Current laws allow lending institutions to lend amounts up to 125% of the median home value for the property’s statistical area.
- VA and FHA loans are both governmentally funded loans with specific requirements that must be met in order to qualify.
Louisiana Recourse Laws and the Foreclosure Process
Louisiana is a recourse state. This means that if a borrower becomes unable to pay their mortgage and ends up defaulting, the lender can come after that borrower for the loan. There are many different options for the lender to obtain the funds from the borrower, such as seizure of an asset, garnishment of wages, or levying a judgment against the borrower in order to satisfy the debt. This is because recourse loans do not require collateral, and as such are unsecured loans.
There are two types of foreclosure processes in Louisiana: executory and ordinary. The ordinary process is much more extensive (generally lasting at least nine months) and expensive, and is very similar to a lawsuit. The executory process is set in motion when a lender utilizes a mortgage that has an “authentic act that imparts a confession of judgment” clause where the borrower acknowledges and accepts the obligation of the mortgage. When this language is present, the foreclosure can go much quicker, approximately six months. By Louisiana law, the lender does not have to notify the borrower that they intend to initiate foreclosing procedures, but the deed of trust or mortgage might. Regardless of that situation, when the lender files the petition the borrower is served with a demand for the default amount. The borrower then has three days to pay the money and if he or she cannot the court orders a “writ of seizure and sale”, which the court clerk delivers to the sheriff. It is then up to the sheriff to execute the writ, and escort the borrower from the property.
The state of Louisiana offers many beautiful and attractive places to live. They also have many mortgage programs offering potential borrowers the opportunity to obtain a mortgage for one of those properties. In the event of the borrower defaulting on a mortgage, the lender has the ability to demand the remaining amount from the individual borrower and can obtain that payment via many means, including seizure of the property and initiating foreclosure proceedings. Foreclosures in Louisiana can last between six and nine months, and begin with an opportunity for the borrower to fulfill their existing financial obligations to the lender before legal action is taken to remove them from the property.
It is very important not only to choose the right property for you and your family, but also to choose the right loan product and make sure that you will be able to fulfill those obligations. Louisiana is a beautiful state with much to offer; choose wisely.