Mortgage Types

There are many different specific types of mortgages/loans and ways to finance your home. See below for a brief description of the most common loan types and fill out this questionnaire so we can get you to the best lender for you.

Conventional

A Conventional loan is a homebuyer's loan that is not guaranteed or insured by a government entity such as the Federal Housing Administration, the U.S. Department of Veterans Affairs, or the USDA Rural Housing Service. Instead, Conventional loans are backed by private lenders such as banks or the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation.

Key Points

  • Minimum down payment is 3.0%.
  • Mortgage Insurance is required only if the down payment is less than 20%.
  • Available for primary residence, second home, and investment properties.
  • Eligible property types include: Single Family, 2-4 Units, Townhomes, and Condos - be sure to check with your lender that the condo warrantable.
  • Pros - Lower mortgage insurance premium than FHA, ability to put down more money and avoid mortgage insurance, and flexibility for different forms of property use (investment, vacation home etc.) 
  • Cons - Higher interest rates than FHA, rates will vary significantly based on credit score, property type, ownership, down payment etc. 

FHA

As the name suggests, an FHA mortgage is a loan that is insured by the Federal Housing Administration. FHA loans often have lower rates and more down payment assistance programs available for first-time buyers but are restricted to financing primary residences only. Go Here To See the Latest FHA Limits

Key Points

  • Minimum down payment is 3.5% (Gift Funds allowed from Family Member)
  • Mortgage Insurance is required
  • Only available for your primary residence
  • Eligible property types include: Single Family, 2-4 Units, Townhomes, and Condos - Condos must be on the FHA Approved Condos List
  • Pros - Low down payment, low-interest rates, easier qualifying, lower minimum credit score
  • Cons - Upfront mortgage insurance and monthly mortgage insurance, payment may be high than conventional due to mortgage insurance and lower down payment

VA

A VA loan is a mortgage meeting requirements established by the U.S. Department of Veterans Affairs (VA). VA loans are insured against default by the VA.

Key Points

  • To qualify you must be Active Military or Honorably or General Discharged Veteran
  • Minimum Down Payment is 0%
  • Mortgage insurance is not required
  • There is a funding fee of 2.15% for your first VA loan and 3.3% for subsequent VA loans, these fees are waived for disabled Veterans
  • Only available for your primary residence
  • Eligible property types include: Single Family, 2-4 Units, Townhomes, and Condos - Condos must be on the VA Approved Condos List
  • Pros - No Monthly mortgage insurance, you can buy with $0 down, very low-interest rates and very easy qualifications for veterans.
  • Cons - Must be a qualified veteran or active military, the loan will have VA funding fee added to the loan amount unless you are a disabled veteran.

USDA

The USDA mortgage program was established the U.S. Department of Agriculture. Loans are issued through the program and eligibility depends partially on the property, in general, the loan is for rural areas.

Key Points

  • Property must be in a qualifying rural development area: USDA Qualified Property Address Search
  • Minimum Down Payment is 0%
  • Mortgage insurance is required
  • Only available for your primary residence
  • Eligible property types include: Single Family and Townhomes
  • Pros - $0 Down, low monthly mortgage insurance, low-interest rates.
  • Cons - You must meet maximum income and loan amount guidelines, property must be in a qualified area, and the loan will have USDA funding fee added to the loan amount

Other Financing

If none of the above mortgage types sound like they will work for you, please see our Alternative Financing page.