The Difference Between Annual Percentage Rates and Interest Rates

 If you are looking around for the best rates and options for a mortgage, then you are probably familiar with interest rates and annual percentage rate (APR). The majority of consumers think that these are one and the same, but they are not. They are related but that is as close as it gets.

What is the interest rate?

Simply put, interest rate is the percentage you pay to borrow the principal amount on your loan on an annual basis. The interest rate applies to the life of the loan, from the day it’s borrowed to the day it’s paid off. There are two types of interest rates, fixed or variable. When you get a fixed interest rate, the interest rate stays the same throughout the life of the loan. A variable rate varies and will change over the life of the loan. A variable rate is based on the prime rate and when the prime rate changes, so will your variable rate. This means that the payment on your variable rate will go up or down when the Fed moves to change the rate.

What is APR?

This can be a bit confusing but just remember that the interest rate is what the lender will charge the borrower for the loan. The annual percentage rate is the total price of the loan expressed as a percentage. The annual percentage rate will include lender fees as well, so the APR will be the same as the interest rate if the loan does not have any additional fees. If the loan does have additional fees, then the APR will be higher.

Why do you need to understand both APR and interest rate/?

When you are shopping for a loan, you want the lowest rates. Most consumers look for the lowest interest rate but if they do not include the APR rate, they will not get a full picture of the amount they will owe. The interest rate only calculates the cost that it will be to borrow the principal, but the APR will give you the cost of the total lifetime cost of the loan. For example, if you borrow $15,000 to be paid over 72 month at an interest rate of 7.99% with no origination fees, the APR will also be 7.99%.

How are interest rates calculated?

When determining your interest rate, a lender will look at your credit history, application information and the terms you selected. This means that the better your credit score is, the better interest rate you will be able to obtain. So getting your credit score the highest you can get it will get you the lowest rate. To ensure that you have a healthy credit score, you need to pay your loans and bills on time, do not use all of your credit that is available, pay any debt you have down, and don’t apply for a new loan or credit cards right before you are applying for a mortgage.

How is APR calculated?

When APR is calculated, a lender will take into consideration your interest rate, finance charges, and fees you will have on your loan. Remember that the APR can be affected by the origination date and your payment’s due date.

All financial decisions are a big part of your life, so you need to make them wisely. Remember to get all of the facts before you decide to borrow. If you are working with a real estate agent, they can refer you to a lender that is right for you.

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Tips to Sell Your Family Home

 Selling your family home is something that can be emotional. Whether you are downsizing, moving to another location or wanting to buy a condo, there are tips to start with in order to reach this goal.

1. Determine Your Timeframe

Think about your timeframe because it can take a few weeks to several months to sell a home. Even in a seller’s market there are variations due to the asking price, location, condition and appeal of your home. So knowing how much time you need to get yourself into a new home is important. This will help your real estate agent determine the listing price and the marketing strategy they will use to sell your home.

2. Determine Your Home’s Market Value

Your sales agent can help you with this step. It is very important to find out the market value of your home before it is listed for sale. You and your agent will review recent home sale in your area, the condition of your home and if you have any upgraded features or renovations that have been done. The market conditions will be a big part of determining the list price of your home. This means you will need to take into consideration housing inventory, interest rates and buyer demand.

3. Get Your Home Ready For Market

Your home needs to make a good first impression so in order to do this, you must address any problems. Make sure the floors are clean, paint looks fresh and your home looks overall welcoming. This will include your home’s curb appeal, repairs and maintenance, decluttering, and staging. Your real estate agent can help you with the process or can refer you to a home stager who can assist.

4. Negotiation and Accepting An Offer

This can be a complex step and your real estate agent will help you along the way. Remember that you need to be prepared to negotiate. and don’t let your emotions get in the way. Your realtor will review all terms with you and help you with your response in a timely manner. Also, consider all the offers if there are multiple offers and accept or counteroffer.

5. Prepare To Close

Again, your real estate agent is there every step of the way including this last step. This final step has many stages that you will need to go through. There will be a final walk-through where the buyer and their agent will walk the property to make sure everything’s in order. The escrow company will release an estimated settlement statement and you will sign the closing documents. Once these are complete all funds will be released and the keys will be given to the new owner.

If you are ready to sell your family home, contact a local realtor who can help you with selling your home from start to finish. An agent can help you go through all the steps you need to do in order to get into your new dream home.

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July 2023 Saw Rising Home Sales

According to the National Association of Realtors (NAR), US pending home sales rose 0.9% for the second month in a row. This does come as a surprise due to the elevated home prices and rising mortgage rates. This still was lower than a year ago, as the year-over-year pending transactions dropped by 14%.

“The small gain in contract signings shows the potential for further increases in light of the fact that many people have lost out on multiple home-buying offers. Jobs are being added, thereby enlarging the pool of prospective home buyers. However, rising mortgage rates and limited inventory have temporarily hindered the possibility of buying for many,” said Lawrence Yun with NAR.

Pending home sales and contract signs for a new construction still top the existing home sale by about one to two months. There was an increase though in existing home sales in July. “But, unlike the market for new homes, which has received convincingly above last year’s lows, pending home sales continue to lag behind year-ago levels. This means more of the same is ahead for existing home sales, which have bounced back only modestly,” said Danielle Hale of Realtor.com.

“Today’s data suggests that home sales activity is unlikely to see a strong pick up in the next few months as limited options and significant affordability headwinds weigh on buyers,” says Hale.

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The 2023 Fall Seminar and Plant Boutique in St. Tammany

 The Master of Gardeners of St. Tammany along with the LSU AgCenter hosted the 2023 Fall Seminar and Plant Boutique this September in Mandeville. The event took place at Church of the King at I-12 and LA 59.

The event had several seminars that included presentations and table talks. The experts and experienced horticulturalists talked on many subjects such as the sale of bedding plants, trees, bushes, herbs and Gulf South natives. Patrons could also visit the Plant Boutique which had items from Bracy’s Nursery, Mizell’s Camellia Hill Nursery, Steiz Nursery and Windmill Nursery.

The table talk topics will include :

• “A Year at Clove Brook Farm: Gardening, Keeping Bees, Collecting Antiques, and Entertaining Friends” by Christopher Spitzmiller;
• “New and Recently Introduced High-Performing Plants for 2023” by Mike DeRee, of Ball Seed Company;
• “The Best Herbs to Use in Your Landscape Design” by garden designer, horticulturist and author Sue Goetz;
• “Container Gardening” by master gardener Peggy Plaisance;
• “Native Plants for your Landscape” by Caitlin Roberts of Swampfly;
• “Growing Vegetables,” by Grady Seale, of Covey Rise Farms; and
• “Ask the Expert” by Will Afton, county agent, LSU AgCenter.

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More Backing by FHA Loans for New Home Sales

 According to the National Association of Home Builders, the Quarterly Sales by Price and Financing report shows that FHA backed close to 14% of new home sales in the second quarter of 2023. Conventional loans went down to 73.7% of new home sales the same quarter while VA-backed sales were up to 5.4%. Cash purchases declined to 6.5% of new home sales. In fact, the share of cash purchases has decreased 2.9 percentage points over the past year and has ranged from 4.1% to 10.7% since Q2 2020.

Different regions within the US are backed by different financing sources. The national median sales price of a new home was $416,100. Split by types of financing, the median prices of new homes financed with conventional loans, FHA loans, VA loans and cash were $458,100, $346,500, 392,600 and 364,300, respectively. The price of a new home did decline in the past year. The biggest drop seen was a 20.1% decline.

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The Best Investment You Could Make

 Today’s housing market is all over the palace. There are prospective homebuyers out there who are asking themselves if this is the right time to purchase a home.

The pandemic caused a crazy housing market with home prices skyrocketing and buyers in bidding wars. Today, the market is cooling off a bit because of the high inflation.  The average interest rate for the benchmark 30-year fixed mortgage reached 7.29%, as of July 31.

Even though these red flags might scare you, this is a great time to invest in the real estate market. According to Mike Biryla with The Agency, when there’s volatility in the housing market, it is a great time to purchase. “Sellers that are on the market right now are not opportunistic sellers. This isn’t the market where sellers can just try for a high number and see if it’ll happen,” says Biryla.

When investing in real estate, you need to remember that you are setting yourself up for the future. “If you’re not ready to take on that responsibility just yet but want to lock in an interest rate, buy it now. When it comes to real estate, I think it’s one of the best investments you could possibly make. It’s great for your portfolio and it’s great for your retirement,” says Emma Hernan of the Oppenheim Group.

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New Home Sales on a High

 Temperatures were not the only thing on the rise this summer. According to CNN, New home sales rose in July from the month before, beating estimates and reaching a 17-month high, as buyers continue to look to new construction as an option in the face of a historically low supply of existing homes. 

The US Department of Housing and Urban Development and the Census Bureau reported that sales for new homes were up 31.5% from the summer of 2022. Newly constructed home sales rose to 4.4% to a seasonally adjusted annual rate of 714,000.

Many are concerned that this might change due to the rise in home prices, and the rise in mortgage rates. In fact, existing home sales are down from Summer 2022. Those in the industry are not as concerned with new home sales.

“Household formation continues to outpace new construction which has continued to bolster the market despite the multitude of headwinds,” says Kelly Mangold of RCLCO Real Estate Consulting.

“With the median price of a new home running close to that of an existing home, many homebuyers are opting for the benefits of fresh floor plans, better energy efficiency and a warranty,” said George Ratiu, chief economist at Keeping Current Matters, a real estate market insights company. “Builders are bringing a growing number of new single-family homes to market, focused on meeting the needs of an affordability-constrained consumer.”

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