Louisiana Mortgage

The Important Facts About Louisiana Mortgages

How does Louisiana Mortgage differ from other state mortgages?

There are some unique laws that differ from most states when looking into a mortgage loan in Louisiana. While purpose of a mortgage is to purchase real estate, there are some laws that are specific to Louisiana. For example, Louisiana state law does not allow lines of credit in Louisiana home equity. Also, Louisiana instated an act, named the Residential Lending Act, which is specifically designed to protect citizens and consumer from former and present unfair and illegal lending practices in Louisiana.

As is true in many states, there are still the two options of fixed rate mortgage loans or adjustable rate mortgages. However, some of the preconditions and options of adjustable rate mortgages are different than those in other states. For example, on adjustable rate mortgages, prepayment penalties and reduced rates are not options when considering an adjustable rate mortgage. These differences could account for the lower percentage of Louisianan borrowers, in comparison with national averages, who choose adjustable rate mortgages over fixed rate mortgages.

What are some of the details of closing on real estate in Louisiana? 

In Louisiana the closing of a real estate deal is a formal process. First, a sale is not valid unless executed as a formal act. This formal act includes, the buyer, the seller, two witnesses and a notary public. How this transaction occurs is that the buyer and seller both sign the forms to transfer the property from one name to the other, in the presence of the notary and two witnesses.

Like the closing, the mortgage must also be conducted as a formal act. The mortgage may, however, be authenticated after the closing. In order to authenticate a mortgage, a witness to the mortgage must attest to the same notary and two witnesses that were present at the closing, that he or she witnessed the mortgage.

Some of these practices may seem superfluous and outdated, but they are designed to protect both buyer and seller. If a buyer is relocating to Louisiana, it must be remembered that authentic acts hold tremendous importance during the entire process. If the sale of a property goes without abiding by the standard of an authentic act, the entire document and transaction is null and void. A buyer will want to remember that within the state of Louisiana, the buyer is customarily responsible for all closing costs. There are a few exceptions to that standard, (for example, there are some exceptions made for veterans) but generally, the closing costs are expenses that the buyer will want to account for.