There's no single mortgage that works best for everyone. The right loan depends on your financial situation, how long you plan to stay in the home, and what you're buying. Here's a straightforward look at the five types you'll hear about most.
Conventional Fixed-Rate Mortgage
This is the most familiar option. The interest rate is locked in at the start and stays the same for the life of the loan — typically 15, 20, or 30 years. Your principal and interest payment never changes, which makes budgeting predictable. It's a strong choice if you plan to stay in the home long-term and want stability.
Adjustable-Rate Mortgage (ARM)
An ARM starts with a fixed rate for an initial period — often five, seven, or ten years — then adjusts periodically based on market conditions. The opening rate is typically lower than a fixed-rate loan, which can be appealing if you know you'll move or refinance before the adjustment kicks in. Be clear-eyed about the risk: your payment could rise after the fixed period ends.
FHA Loan
Insured by the Federal Housing Administration, FHA loans are designed for buyers who may not meet conventional loan standards. They allow lower down payments and are generally more accessible for buyers with lower credit scores. The trade-off is mortgage insurance, which adds to the monthly cost. They're a popular starting point for first-time buyers.
VA Loan
Available to eligible veterans, active-duty service members, and qualifying surviving spouses, VA loans are backed by the Department of Veterans Affairs. They often require no down payment, carry no private mortgage insurance requirement, and tend to come with competitive terms. For those who qualify, this is typically one of the most favorable loan programs available.
Jumbo Loan
When the home you're buying exceeds the conforming loan limits set by federal agencies, a jumbo loan fills the gap. These loans follow stricter underwriting standards — generally higher credit scores, larger down payments, and more documentation — because they aren't backed by a government-sponsored entity. They're the standard path for financing higher-priced properties.
Not sure which type fits your situation? Explore your options with us — we'll help you find the loan that makes the most sense for where you are financially.
