In the summer of 2005, the southern part of the state of Louisiana was hit by Hurricane Katrina. The damage was beyond imagination, and the affects of it reached all corners of life from practical life to economics and education.

How, though, did the damage caused by Katrina affect the housing and mortgage markets in Louisiana? In the few parts of Louisiana that were left with minor damage or no damage at all, property prices went up quickly. In fact, they rose nearly 20% shortly after the storm had done its deed.

The reason for the surge in property value, and thus the affects on mortgages and home loans, is a simple supply and demand equation. As those who had homes destroyed in Southern Louisiana moved to higher ground, took out mortgages, and bought homes in Northern Louisiana, the supply soon fell below the demand causing the housing prices to soar.

Louisiana Law

If you are looking to take out a mortgage or home loan in Louisiana, you should be aware both of what the state has to say on the matter and what the housing market is like. Like most states, Louisiana is subject to both federal and state law when it comes to home loans.

For instance, on a state level, Louisiana does not allow home lines of credit to be issued. Additionally, prepayment penalties as well as options for reduced rates on adjustable rate loans. Finally, the state has a law called the Residential Mortgage Lending Act. The act highly regulates what lenders can and cannot do in terms of issuing mortgages and home loan terms. All of these laws are done as a way to prevent or at least inhibit predatory mortgage practices. This is especially important in the wake of the hurricane and current condition of the housing market.

Housing in Louisiana

Louisiana, a largely rural state, has a median home cost of less than $100,000. However, many experts believe that amount will go up significantly as the city of New Orleans and surrounding areas are rebuilt. The houses built in place of destroyed homes are expected to come in at a higher price than the former buildings in the same locations. That means a rise in overall home prices in Louisiana and thus an effect on the mortgage and home loan markets as well. The higher prices go in comparison to income, the more mortgage companies will have to make use of nontraditional mortgages or home loans.

First Steps

The first step you should take if you think you are interested in a home loan in Louisiana is to begin scouting out areas in the state where you may want to purchase. Taking some time to look around and figure out where you can live and where you may want to live is important. Values of homes and thus the amount you will need will vary greatly around the state with the Katrina factor thrown into the equation. Take your time and look around so that when you and your mortgage broker sit down to look at your loan options, you will know what you need in terms of mortgage amounts.

Who Do You Talk To?

When you decide that you do indeed want a Louisiana mortgage or home loan, you should first get into contact with a mortgage professional. The right broker will be able to walk you through your options and the state's special programs as they attempt to rebuild. In fact, you may have even more options if you choose to build a home in a Katrina affected area of the state.

Getting in touch with a good mortgage broker who is both knowledgeable and qualified is simply. All you need to do is fill out the form below and someone will get in touch with you. Before you know it you will be on your way to the Louisiana home you want with the mortgage or home loan that helps you the most.