Overview of Mortgage Types   Lending institutions in the Shreveport-Bossier area offer several types of mortgages.  If you are thinking of building, buying, or refinancing a home,  take time and shop around.  Different lending institutions offer different services and rates, so research, compare, and save!   

Federal Housing Administration (FHA).  This program offers a very low down payment for the borrower and mortgage insurance coverage for private lenders (to protect against loss on a default).  The maximum loan amount in Caddo and Bossier parishes is $105,800.   

Veterans Administration (VA).  The VA program guarantees a portion of the loan against loss if the purchaser defaults on the payment, much like the FHA program.  The VA loan program also allows for 0% down.   

Conventional loans.  Any loan that is not insured or guaranteed by the federal government is a conventional loan.  With less regulation the lender is usually free to set his/her own lending policies subject only to limitations of his charter or state regulations.  Conventional loans provide more flexibility in financing and room for negotiation between borrower and lender.  Conventional loans are capped at $214,600 (with a 5% down); for loans above the cap you'll need a Jumbo loan.   

Adjustable Rate Mortgages.  These are amortized loans designed to lower your monthly payment in the first years of your loan.  The interest rate is keyed to certain economic indices (normally the prime lending rate or Treasury bills) and allows the lender to vary the interest rate up or down as the indices change throughout the years.  The initial interest rate usually starts 2% to 4% lower that the going monthly rate.  To protect yourself, ensure interest rate caps are built into the mortgage agreement to limit the rate increase each year and the life of the loan.
 
In a 2/1 Buydown, the interest rate is lower in the first and second year, bringing more qualifying power.