Mortgage Loan Options Explained: Which Home Loan Fits You?
There is no single “best” mortgage. There is the best one for you. Here is the cheat sheet.
| Loan type | Minimum down payment | Good fit if you… |
|---|---|---|
| Conventional | As low as 3% (some programs) | Have good credit and steady income. PMI can be removed once you reach 20% equity. |
| FHA | 3.5% with a 580+ score | Have a lower credit score or a small down payment. Comes with FHA mortgage insurance. |
| VA | 0% for eligible borrowers | Are an eligible veteran, service member or surviving spouse. No monthly mortgage insurance. |
| USDA | 0% | Are buying in an eligible rural or suburban area and meet income limits. |
| Jumbo | Often 10%–20% | Need to borrow more than the conforming loan limit. |
| Adjustable-rate (ARM) | Varies | Plan to move or refinance before the fixed period ends, and can handle a higher payment later. |
Fun factA “5/6 ARM” keeps the same rate for 5 years, then can adjust every 6 months. The numbers are not random — they are the whole loan in two digits.
How to choose
- Check your credit score. It decides which loans and rates are open to you.
- Count your cash. Down payment plus closing costs plus a safety cushion.
- Think about how long you will stay. Short stay? An ARM might fit. Forever home? A fixed rate gives peace of mind.
- Compare at least three Loan Estimates. Same loan type, same day, side by side.
Run your numbers with our mortgage calculator and affordability calculator, or browse all loan type guides.
Program rules and limits change. Confirm current requirements with a licensed loan officer.