Congratulations! Buying a home is a wonderful milestone. It’s the proverbial American dream, after all. Plus, navigating the real estate market in Baton Rouge is no small feat. Educate yourself as much as possible—this is likely the biggest purchase you’ll make in your lifetime!
Buying a home in Baton Rouge
Buying a home can seem like an endless stream of decisions. You start with choosing a realtor. Then you pick a neighborhood. When it comes to the house itself, you have to sort through options and features. At some point, you also have to choose a home loan company. This will be a 20 or 30 year-long relationship so take this decision seriously.
What do you need to know?
First, let’s define a few terms you’ll hear often during the home loan process:
- Mortgage: The amount you’ll pay every month towards your property investment. It’s like rent you’re paying to yourself! Your mortgage includes the loan principal, interest, taxes, and private mortgage insurance (PMI).
- Interest Rate: The percentage charged by your home loan company. It’s mainly determined by your credit score and can differ from lender to lender. Feel free to shop around to get quotes.
- Down Payment: The percentage of the total home cost you pay upfront. It usually depends on the type of home loan. Often, the higher the down payment the lower your monthly mortgage payments. Let your home loan company know how much you have available so they can determine the best loan for you.
Which home loan is right for you?
There are quite a few different types of home loans. Here’s a brief breakdown of three most common in Baton Rouge.
- FHA Loans are backed by the Federal Housing Administration (FHA). There are no income or location restrictions. Popular for first-time home buyers, you can qualify with lower credit scores. Down payments can be as low as 3.5%. But you’ll have to pay mortgage insurance premiums.
- Conventional Loans have higher requirements than FHA loans. They are best suited for buyers with good credit. They typically have lower interest rates, which makes them very desirable.
- Don’t let the term “rural” confuse you—many neighborhoods in East Baton Rouge Parish qualify for Rural Development Loans. As long as your income is within the required range, you can qualify for 100% financing. That means no down payment!
The Essential Home Loan Company
The biggest thing to remember is that you have a choice when it comes to choosing a home loan company in Baton Rouge. When you choose to purchase your loan from a credit union such as Essential FCU, you’ll be working with real, local people and not a faceless corporation. Have more questions? Call us here in Baton Rouge at 225.353.8238. You can also get a free quote online. We can help you choose the perfect home loan so you can be confident and happy in your decisions!