How to Get a Mortgage in Louisiana

Deciding to buy a home is a big step in one's life. If you are thinking about buying a home in Louisiana, the first thing you need is a home mortgage loan. The following steps are necessary in getting a Louisiana home mortgage loan.

Difficulty: Moderately Easy

Instructions

1. Get a copy of your credit report. If there are any inconsistencies, try to clear those up before applying for a loan.

2. In Louisiana, mortgage brokers are required to be licensed and carry at $25,000 surety bond. Get proof of their license.

3. There are no predatory mortgage lending (intentionally coercing consumers into contractual loans with unusually high payment terms and interest rates, often directed at uninformed borrowers or those with poor credit) laws in Louisiana. However, there is pending legislation in the state congress that would create several lending laws to protect consumers. Contact your legislator for more information, or visit the link included in the References section of this article.

4. Review the options available in homeownership assistance programs from Louisiana and the federal government. These are typically offered to veterans, disabled, low-income buyers, single parents, senior citizens, and rural home buyers, and include programs like the Teachers' Assisted Program Loan and the Louisiana Low Rate Program.

5. Shop around for mortgage rates. Many companies now provide free online rate quotes. Contact credit unions, mortgage brokers (individuals and agencies that arrange financing from a variety of lenders), banks and online lending institutions.

6. Currently, many lenders, including members of the Louisiana Mortgage Associates, are offering special relief packages to victims of Hurricane Katrina or first-time home buyers. This benefit may allow you to obtain a full mortgage with little to no down payment or out of pocket expense.

7. Stay away from Adjustable Rate Mortgages (ARM). ARMs move the interest rate risk from the lender and onto you. If interest rates rise so will your mortgage payment. If interest rates fall, your payment will stay the same or decrease slightly.

8. Be sure that your lender is legitimate. In Louisiana there is a Predatory Lending Prevention Task Force, which studies ways to prevent predatory lending and protect residents of Louisiana from such circumstances.

9. Choose a lender, file your loan application, secure your rate, and get pre-approved. Make sure you have the correct documentation for your loan like tax returns, proof of employment, investment information and other documents specified by the lender.

10. Get help of a real estate agent that is reputable and knowledgeable of the market. Have them help in your home search.

11. Finalize your loan and make an offer on your home.

12. Pay all attorney fees, closing costs and realtor fees. The lender will provide you with a schedule for repayment of the mortgage loan.

Tips & Warnings

• Shop around for the lowest interest rates. The difference in savings from just a quarter of a percent can mean thousands of savings over a 30-year mortgage.
• Be sure to have your prospective home inspected by a professional. Discover problems that may exist before the deal is finalized.
• Avoid letting a realtor pressure you to buy a specific home, as they may have another agenda.
• Before you sign anything, make sure that you thoroughly understand all the terms of the mortgage contract.
• Do not pay a lender to apply for a loan. No reputable lenders engages in this practice.
• Record low interest rates of the recent years have led to many unethical lending and loan scams. Have an attorney review any documents before you sign them.
• Check to see that the home title is clear of liens before you purchase it.