What Types of Mortgages are Available and Which is Best for You?
LOUISIANA REALTORS • July 24, 2017
Mortgages can be a lot like ordering off of a menu at a restaurant; you have a lot of options. Just as you can order a steak to your liking, rare, medium, etc., and choose from a variety of salads and sides, there are different types of mortgages
available to meet your needs as well.
There are pros and cons to each type of mortgage, but understanding what each of them offers can help save you time and money as you shop for a home. Let’s take a closer look at each type of mortgage.
Fixed Rate Mortgage
A fixed rate mortgage maintains the same interest rate for the entire repayment term. This loan type will have the same monthly payment for the life of the loan.
Adjustable Rate Mortgage (ARM)
Adjustable rate mortgages have an interest rate that will change from time to time based on the terms of the loan. There are also hybrid ARMs that will feature a fixed rate for a certain period of time before switching to an adjustable rate.
FHA Loans
An FHA loan is a government-insured home loan. The Federal Housing Administration insurance program is managed by the Department of Housing and Urban Development (HUD). FHA loans are available to all types of home buyers. This program offers you the ability to make a down payment as low as 3.5%, however you do have to pay for mortgage insurance.
VA Loans
VA loans are available to military service members and their families through the U.S. Department of Veterans Affairs (VA). Similar to FHA loans, these are also government-insured loans. Borrowers under this program can receive 100% financing.
USDA / RHS Loans
The United States Department of Agriculture (USDA) has a loan program for borrowers that meet specific income requirements. Managed by the Rural Housing Service (RHS), this type of loan is available for “rural residents who have a steady, low, or modest income, and yet are unable to obtain adequate housing through conventional financing.” To qualify, a borrower’s income can be no higher than 115% of the adjusted area median income (AMI), which varies by county or parish.
Conforming Loans
A conforming loan is a loan that meets the underwriting guidelines set forth by Fannie Mae and Freddie Mac, as far as the size of the loan is concerned. Fannie Mae and Freddie Mac are government controlled corporations that buy and sell mortgage-backed securities. Conforming loans are loans that meet their pre-determined size limits and criteria.
Jumbo Loans
A jumbo loan is any loan that exceeds the aforementioned size limits and criteria. These loans tend to offer a higher risk for the lender based on their size. Jumbo loan borrowers need excellent credit and need to provide a larger down payment to mitigate these risks. This type of loan also typically feature a higher interest rate.
When shopping for a new home it is important to hire a REALTOR® for their experience and expertise. REALTORS® also have a vast professional network that can include banks, lenders, and mortgage brokers to help you find the best mortgage.
Week three of the Regular Session kept real estate issues in the conversation, even as lawmakers continued to focus heavily on workforce, tax and insurance policy. On the property tax front, measures to reshape assessments and exemptions, including proposals for a new blight rehabilitation exemption and additional relief for seniors, remain parked in the House Ways and Means Committee as stakeholders work through fiscal and local government concerns. These bills matter because they will influence long-term carrying costs, redevelopment incentives and how tax burdens are shared across residential and commercial property. Homestead related legislation, including parish level authority to increase the exemption amount, is also in the queue, signaling that the broader structure of Louisiana’s homestead system is officially on the table, not just the dollar figure. For homeowners and buyers, this debate goes directly to affordability. For local governments, it raises revenue stability and service delivery questions. There also has been movement on several identical pieces of legislation that would instruct parish assessors to develop a process for homeowners to permanently register for the homestead exemption for the duration that they own and live on the property. We are actively tracking legislation that will directly shape how investor activity and non-traditional transactions are recognized and regulated in Louisiana’s real estate market. This includes HB 468 by Troy Hebert , a key component of the Louisiana REALTORS® legislative package that targets the wholesale of residential real estate, which was heard in the House Commerce Committee on Monday. The bill is currently positioned for a floor vote early next week. As drafted, HB 468 represents a major step in the right direction for consumer protection in Louisiana, advancing needed guardrails through potential disclosure, registration, and practice standards that could redefine how assignment contracts and “off-market” transactions intersect with licensed brokerage activity. In parallel, HB 292 by Delisha Boyd passed the House on final reading, 86-3, and is on its way to the Senate. Together, these measures represent a coordinated policy effort to bring greater structure and transparency to emerging transaction models, while preserving the integrity of the traditional brokerage framework. Finally, the broader policy backdrop remains important: the Governor continues to push income tax changes and cost of living relief, while business and industry groups are prioritizing insurance, workforce and energy — each a key driver of long run housing demand and investment. As these debates evolve, we’ll keep you updated on what moves, what stalls and what it all means for your clients, your pipeline and private property rights across Louisiana. Please view the weekly bill tracking report provided by our lobbying team over at Harris, DeVille and Associates.
Tax Questions & Updates for 2026 Webinar Recording Now Available
NAR is pleased to share the latest consumer guide that explains the concept of home staging, offers DIY staging tips and missteps and shares the latest NAR member sentiment on how staging can help buyers better visualize the property as their future home and potentially net sellers a higher price. As a reminder, all guides in this series are available for download—in both English and Spanish—on facts.realtor . Please allow up to two weeks for the Spanish version of the latest resource to be translated and uploaded. For ease of reference, below is a list of the most recent guides: NEW: Staging Your House for a Sale Spotting Deepfake Scams in Real Estate Are You Ready to Invest in Real Estate? Thinking of Selling? 7 Factors to Consider How to Make Your Home More Energy Efficient Thank you for your continued engagement with the “Consumer Guide” series and for sharing the resources with prospective clients to ensure they have the information they need to find success in their home buying or selling journey. Remember that these guides are for informational purposes only and are not meant to enact or change any existing NAR policy. Be on the lookout for the next consumer guide, which discusses home mortgage options that allow buyers to fold in renovation costs.
