Choosing the right mortgage is one of the most important decisions in your home buying journey. Each loan type has unique benefits, requirements, and costs. This guide will help you understand the differences and determine which mortgage best fits your financial situation and goals.
Quick Comparison
| Loan Type | Down Payment | Credit Score | Current Rate |
|---|---|---|---|
| Conventional | 5-20% | 620+ | 5.25% |
| FHA | 3.5% | 580+ | 5.75% |
| VA | 0% | 620+ | 5.00% |
| Jumbo | 10-20% | 700+ | 6.00% |
Conventional Loan
Buyers with good credit and stable income
Current Rate
5.25%
Down Payment
5-20%
Min. Credit Score
620+
Interest Rate
5.25%
Advantages
- Lower interest rates for good credit
- No upfront mortgage insurance premium
- Can cancel PMI at 20% equity
- Higher loan limits than FHA
Considerations
- Requires higher credit score
- Stricter qualification requirements
- Larger down payment typically needed
- PMI required if down payment < 20%
FHA Loan
First-time buyers and those with limited savings
Current Rate
5.75%
Down Payment
3.5%
Min. Credit Score
580+
Interest Rate
5.75%
Advantages
- Low down payment (3.5%)
- Lower credit score requirements
- More flexible debt-to-income ratios
- Assumable loan option
Considerations
- Upfront mortgage insurance premium
- Monthly mortgage insurance for life of loan
- Property must meet FHA standards
- Loan limits apply
VA Loan
Military veterans, active duty, and eligible spouses
Current Rate
5.00%
Down Payment
0%
Min. Credit Score
620+
Interest Rate
5.00%
Advantages
- No down payment required
- No private mortgage insurance
- Competitive interest rates
- Limits on closing costs
Considerations
- Funding fee required (1.4-3.6%)
- Only for eligible veterans/military
- Property must meet VA standards
- Certificate of Eligibility needed
Jumbo Loan
Luxury home buyers and high-cost areas
Current Rate
6.00%
Down Payment
10-20%
Min. Credit Score
700+
Interest Rate
6.00%
Advantages
- Finance homes above conforming limits
- Competitive rates for qualified buyers
- No mortgage insurance (20% down)
- Flexible loan terms
Considerations
- Stricter qualification requirements
- Larger down payment required
- Higher interest rates
- More documentation needed
Which Loan is Right for You?
Choose Conventional If:
- • You have a credit score of 620 or higher
- • You can afford a down payment of at least 5%
- • You want the flexibility to cancel PMI
- • You have stable income and employment history
Choose FHA If:
- • You're a first-time home buyer
- • You have limited savings for down payment
- • Your credit score is between 580-660
- • You have a higher debt-to-income ratio
Choose VA If:
- • You're an eligible veteran or active military
- • You want to buy with no down payment
- • You want to avoid mortgage insurance
- • You qualify for a Certificate of Eligibility
Choose Jumbo If:
- • You're buying a luxury or high-priced home
- • The home price exceeds conforming loan limits
- • You have excellent credit (700+)
- • You can make a larger down payment (10-20%)
Not Sure Which Loan is Right for You?
Our mortgage experts can help you compare options and find the perfect loan for your situation.