Today's mortgage and refinance rates in Louisiana

Buying a home in Louisiana

According to Zillow, the typical home value in Louisiana is lower than the typical US home price of $259,906. The typical home value in Louisiana is $176,987, and Zillow expects the value to increase to $188,000 by September 2021.

First-time homebuyer programs in Louisiana

The Louisiana Housing Corporation has several types of financial assistance if you get a mortgage from a participating lender:

  • Home | MRB Program: If you earn a low-to-moderate income, you can get a discount on mortgage insurance and a loan of 4% to 9% of your mortgage amount as down payment/closing cost assistance.
  • Mortgage Revenue Bond Assisted Program: You may receive a loan for up to 4% of your mortgage amount for down payment and closing cost assistance, and you could pay reduced mortgage insurance costs.
  • Market Rate GNMA Program: If you're getting a government-backed mortgage, you can get a loan for up to 4% of your mortgage amount, and you won't have to pay origination fees.
  • Delta 100 Program: If you live in certain parishes, you can receive a mortgage at a 2% fixed rate, and get up to 3% of your mortgage amount toward closing costs.
  • Mortgage Credit Certificate Program: Claim 40% of the interest paid on your mortgage on your federal taxes, up to $2,000 per year.
  • Resilience Soft Second Program: This program is meant to help buyers who can't afford a mortgage to cover the full cost of a home. You'll receive a loan of up to 20% of the home purchase price, up to $55,000, and the government will forgive the loan if you live in the home for at least 10 years. You may also get an additional $5,000 toward closing costs.

If you're buying a home in New Orleans, you may be eligible for the Direct Homebuyer Soft Second Mortgage Assistance Program through the local government. You'll get a soft second mortgage for up to $45,000, plus $5,000 for closing costs.

In Kenner, you can get up to $50,000 as a soft second mortgage through the First-Time Homebuyers Assistance Program. Depending on how much you borrow, the local government will forgive your loan if you live in the home for five to 15 years.

Historic mortgage rates for Louisiana

By looking at the average mortgage rates in Louisiana since 2010, you can see trends for 30-year fixed mortgages, 15-year fixed mortgages, and 5/1 adjustable mortgages:

Seeing how today's rates compare to historic Louisiana mortgage rates may help you decide whether you'd be getting a good deal by getting a mortgage or refinancing now.

How do 30-year fixed rates work?

You'll pay a higher interest rate on a 30-year fixed mortgage than on a shorter-term fixed-rate mortgage. The 30-year fixed rates used to be higher than adjustable rates, but recently 30-year terms have been the better deal.

Monthly payments are relatively low for a 30-year term, because you're spreading payments out over a longer period of time than you would with a shorter term.

You'll ultimately pay more in interest with a 30-year term than you would for a 15-year mortgage, because a) the rate is higher, and b) you'll be paying interest for longer.

How do 15-year fixed rates work?

A 15-year fixed-rate mortgage is more affordable than a 30-year term in the long run. The 15-year rates are lower, and you'll pay off the loan in half the amount of time.

However, your monthly payments will be higher on a 15-year term than a 30-year term. You're paying off the same loan principal in half the time, so you'll pay more every month.

How do ARMs work?

With an adjustable-rate loan, your rate stays the same for the first few years, then changes periodically. For example, your rate is locked in for the first five years on a 5/1 ARM, then your rate increases or decreases once per year.

ARM rates are at all-time lows right now, but a fixed-rate mortgage is still the better deal. The 30-year fixed rates are comparable to or lower than ARM rates. It could be in your best interest to lock in a low rate with a 30-year or 15-year fixed-rate mortgage rather than risk your rate increasing later with an ARM.

If you're considering an ARM, you should still ask your lender about what your individual rates would be if you chose a fixed-rate versus adjustable-rate mortgage.

Refinancing your mortgage in Louisiana

Mortgage refinance rates are at all-time lows right now, so it could be a good idea to switch your current mortgage for one with a better interest rate — especially if the new rate would be significantly lower.

You may decide to refinance with the same lender that gave you your initial mortgage, but it's not always the best idea. A different lender may offer you a better deal the second time around. Shop around for a company that will offer the best interest rate and charge relatively low fees.

How to get a low interest rate on your mortgage

Here are some tips for landing a good interest rate on your mortgage:

  • Save more for a down payment. With a conventional loan, you may be able to put down as little as 3%. But lenders reward a higher down payment with a better interest rate. Mortgage rates should stay low for a while, so you may have time to save a bigger down payment.
  • Increase your credit score. Many lenders require a minimum credit score of 620 to receive a mortgage. But you can land a better interest rate with a higher score. The most important factor for boosting your score is to pay all your bills on time.
  • Lower your debt-to-income ratio. Your DTI is the amount you pay toward debts each month, divided by your gross monthly income. Most lenders want to see a DTI of 36% or less for a conventional mortgage, but a lower DTI can result in a lower rate. To improve your DTI, pay down debts or consider opportunities to increase your income.
  • Choose a USDA or VA loan. If you're eligible, you might consider a USDA loan (for low-to-moderate income borrowers buying in a rural area) or a VA loan (for military families). These types of mortgages typically charge lower rates than FHA or conventional loans — and you don't need any money for a down payment.

Improving your financial situation and choosing the right type of mortgage for your needs can help you get the best interest rate possible.

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