The average home buyer in Louisiana spends between $16,454 – $65,972 when purchasing a $246,300 home, the state median value.
Before you start house-hunting, it’s important to understand the costs associated with purchasing a home. A well-developed budget is crucial to finding the right house for your needs. Smart Move Real Estate wants to give you all the information you need to buy a house in Louisiana. Explore the price of buying a home in Louisiana and the costs associated with it.
Costs of Buying a Home in Louisiana
| Expense | Approx. Amount |
| Earnest Money Deposit | $500 – $1,000 |
| Down Payment (3.5% – 20%) | $8,410 – $48,060 |
| Cash Reserves | $2,000 – $4,000 |
| Closing Costs (2% – 5%) | $4,806 – $12,015 |
| Home Inspection | $425 – $475 |
| Property Appraisal | $313 – $422 |
| TOTAL | $16,454 – $65,972 |
Earnest Money Deposits
An earnest money deposit is a deposit of about $500-$1,000 used to initiate a transaction. These deposits are optional, though highly encouraged. That’s because they indicate a buyer’s interest in a house. An earnest money deposit is held by a lender and used in closing costs later in the process. However, if a transaction falls through, the deposit is returned to the buyer.
Down Payments
A down payment is the cash paid upfront to a lender to qualify for a loan. Down payments are based on a percentage of the home’s total price. These percentages are determined by your credit as well as the type of loan applied for. However, other factors affect your payment, like your financial circumstances or the property type (i.e. primary residence or rental property).
How Much Is a Down Payment?
In the past, buyers needed to save 20% of the home’s price for a down payment. Thankfully, with homebuyer assistance programs, borrowers can get a down payment for as low as 0%. A quality real estate agent will work with you to find a loan that suits your needs.
A few Louisiana down payment buyer loans include:
- Conventional 97 Loan: First-time home buyers with a minimum FICO score of 620 pay 3% down on a mortgage. After reaching 20% of the home equity, buyers stop paying mortgage insurance.
- FHA Loan: The Federal Housing Administration loan lets first-time buyers with a minimum FICO score of 580 borrow with 3.5% down. However, borrowers must pay insurance premiums until they refinance to a different mortgage or repay their loan.
- VA Loan: The Veterans Association loan is strictly for veterans and service members. It allows service members to borrow 0% down. Minimum FICO scores vary but are typically 620.
- USDA Loan: The US Department of Agriculture loan is a 0% down loan for low-to-moderate income borrowers buying in designated rural areas. Minimum FICO scores are typically 640, however, these can vary.
Cash Reserves
Cash reserves are savings that indicate to lenders that buyers can make their mortgage payments in the event of an emergency. Though not required, cash reserves help buyers gain more attractive loans from financial institutions. A good rule of thumb when applying for a loan is to have at least 2-3 months’ worth of mortgage payments in cash reserves.
Closing Costs
After your down payment is your closing costs. Closing costs consist of several payments made throughout the closing process like appraisal fees, attorney fees, and escrow funds. Closing costs for homebuyers in Louisiana are approximately 2%–5% of the home’s agreement value. These costs are determined by negotiation and influenced by market conditions.
Home Inspections
In an inspection, an inspector assesses a property to ensure there aren’t any potential damages that influence the value of a home. An inspector will check for everything from plumbing issues to structural damage. The average cost for a Louisiana home inspection is around $425 to $475. However, individual company prices and seller concessions can influence inspection costs.
Property Appraisals
A home appraisal is similar to an inspection in that a professional will inspect aspects of your home. However, home appraisals the price of a house as opposed to its conditions. Average costs for home appraisals range from $500-$1,200. Individual appraiser prices and seller concessions can affect these prices.
Buy with Confidence. Choose a Louisiana Real Estate Agent from Smart Move!
It’s okay to feel a little overwhelmed after seeing the different costs associated with buying a home. Don’t worry! Smart Move agents are trained to walk buyers through every step of the journey. Our goal is to ensure you understand each part of the process so that you can make the best decision for your needs.
Call (225) 448-2850 or send us a message to get in touch with a Smart Move agent. Why wait on the home of your dreams? Contact us today and step into your future with confidence!