Mortgage Articles
Simple Guides to Help You Get Your Mortgage
The 5 Main Types of Home Loans
Explained in Plain English
1. Conventional Loan
Best if you have decent credit and some money saved.
This is the standard loan most people use. It comes in two types:
- Conforming: Follows government rules. Safer, often cheaper.
- Non-conforming (like jumbo): Breaks those rules. Used for bigger, pricier homes.
| đź‘Ť Pros | đź‘Ž Cons |
|---|---|
| Offered by most banks | Need at least a 620 credit score |
| Can buy regular homes, second homes, or rentals | If you put less than 20% down, you’ll pay extra insurance |
| Only need 3% down for some loans | Stricter rules on how much debt you can have |
Best for: Buyers with steady income, good credit, and a decent down payment.
2. Jumbo Loan
Best if you're buying a pricey home (over $806,500 in most places).
This is for homes that cost more than what the government backs. Lenders get pickier with these loans.
| đź‘Ť Pros | đź‘Ž Cons |
|---|---|
| Lets you borrow more | Need great credit (often 700+) |
| Competitive interest rates | Usually need 10%–20% down |
| Good for high-cost areas | Not every lender offers them |
Best for: Buyers with strong finances buying expensive homes.
3. Government-Backed Loans (FHA, VA, USDA)
Best if your credit isn’t great or you don’t have much saved.
These loans are insured by the government to help more people buy homes.
- FHA loans: Low credit (as low as 580), only 3.5% down
- VA loans: No down payment, no credit requirement — for veterans & service members
- USDA loans: For homes in rural areas — no down payment needed
| đź‘Ť Pros | đź‘Ž Cons |
|---|---|
| Easier to qualify | Fees added (like FHA insurance or VA funding fee) |
| Lower down payment | Limited to certain areas or buyer types |
| No perfect credit needed | Â |
Best for:
- First-time buyers
- Military members or veterans
- Low- to moderate-income families
4. Fixed-Rate Mortgage
Best if you're staying put for a long time.
The interest rate never changes, so your monthly payment stays the same. Popular terms: 15 or 30 years.
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| đź‘Ť Pros | đź‘Ž Cons |
|---|---|
| No surprises in monthly payments | Starting interest rate may be higher |
| Easier to budget | Â |
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