Choosing the right mortgage is an important part of buying a home. There are several types of home loans available, each designed to meet different financial situations and homeownership goals.
A FSBO.com Loan Officer can help you compare your options and determine which loan program may be the best fit for your needs.
Note: Loan availability, eligibility requirements, interest rates, and terms vary by lender and borrower qualifications.
Conventional Loans
A conventional loan is one of the most common mortgage options and is not insured or guaranteed by the federal government.
Best For
Buyers with good credit
Borrowers with stable income
Buyers who can make a down payment
Benefits
Competitive interest rates
Flexible loan terms
Available for primary residences, second homes, and investment properties
Private Mortgage Insurance (PMI) may be removed once sufficient equity is reached (subject to lender requirements)
FHA Loans
Federal Housing Administration (FHA) loans are government-insured mortgages designed to make homeownership more accessible, particularly for first-time homebuyers.
Best For
First-time buyers
Buyers with lower credit scores
Buyers with smaller down payments
Benefits
Lower down payment requirements
More flexible credit guidelines
Competitive interest rates
Keep in mind that FHA loans generally require mortgage insurance premiums (MIP).
VA Loans
VA loans are available to eligible veterans, active-duty service members, and certain surviving spouses through the U.S. Department of Veterans Affairs.
Best For
Eligible military borrowers
Benefits
No down payment for many qualified borrowers
No private mortgage insurance (PMI)
Competitive interest rates
Flexible qualification requirements
Eligibility requirements apply.
USDA Loans
USDA loans are backed by the U.S. Department of Agriculture and are designed to encourage homeownership in eligible rural and suburban areas.
Best For
Buyers purchasing in qualifying rural areas
Income-qualified borrowers
Benefits
No down payment for many eligible buyers
Competitive interest rates
Reduced financing costs
Property location and household income limits apply.
Jumbo Loans
A jumbo loan is used to finance homes that exceed the conforming loan limits established for conventional mortgages.
Best For
Higher-priced homes
Buyers needing larger loan amounts
Benefits
Higher borrowing limits
Financing for luxury or high-value properties
Jumbo loans often require higher credit scores, larger down payments, and additional financial documentation.
Fixed-Rate Mortgages
With a fixed-rate mortgage, your interest rate remains the same for the life of the loan.
Benefits
Predictable monthly principal and interest payments
Protection from future interest rate increases
Easier long-term budgeting
Common loan terms include 15-year and 30-year mortgages.
Adjustable-Rate Mortgages (ARMs)
An adjustable-rate mortgage (ARM) typically starts with a lower fixed interest rate for an introductory period. After that period ends, the interest rate may adjust periodically based on market conditions.
Benefits
Lower initial interest rates
Lower initial monthly payments
May be beneficial for buyers planning to move or refinance before the adjustment period
Monthly payments can increase or decrease after the introductory period ends.
First-Time Homebuyer Programs
Many lenders offer programs specifically designed for first-time buyers.
These programs may include:
Down payment assistance
Closing cost assistance
Reduced down payment options
Homebuyer education resources
Program availability varies by lender, state, and local housing agencies.
Which Loan Is Right for You?
The best mortgage depends on several factors, including:
Credit history
Income
Employment
Down payment amount
Military service eligibility
Property location
Long-term financial goals
A FSBO.com Loan Officer can help you compare loan options and explain the benefits and requirements of each program.
Frequently Asked Questions
Which home loan is best for first-time buyers?
Many first-time buyers consider FHA loans or conventional loans with low down payment options. The best choice depends on your financial situation and eligibility.
Can I buy a home with a small down payment?
Yes. Some loan programs allow qualified buyers to purchase a home with a lower down payment, and certain government-backed loans may offer no down payment for eligible borrowers.
What credit score do I need?
Credit score requirements vary by loan type and lender. Higher credit scores generally provide access to more favorable loan terms and interest rates.
Can I compare multiple loan options?
Yes. Comparing loan programs, rates, fees, and terms is an important step in choosing the mortgage that best meets your needs.
How do I get started?
The first step is to connect with a loan officer, discuss your financial goals, and complete a pre-qualification or pre-approval to understand your borrowing options.