Choosing the Right Mortgage Loan

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Buying a home is an exciting financial milestone. But in your home buying journey, you will quickly discover when it comes to your mortgage, there is no one size fits all. Down payment requirements, minimum credit scores, and debt-to-income ratios are just some of the varying factors that are considered when finding the right mortgage loan for your home.

Understanding the different types of mortgages, their benefits, and requirements can offer you valuable insight in choosing the type of mortgage loan that’s best for you.

Types of Mortgage Loans

Conventional Mortgages

One of the most common mortgage types is the conventional loan. This is the traditional mortgage that requires a down payment of 20% of the purchase price and offers the most competitive rates for well-qualified borrowers. While specific requirements may vary based on financial intuition, conventional loans require borrows to have a minimum credit score of 720.

Adjustable-Rate Mortgage (ARM)

An adjustable-rate mortgage (ARM) can offer borrowers some flexibility in requirements for qualification. Adjustable-rate mortgages often require a minimum of 5% down and give homebuyers a little breathing room in their credit scores. And while this flexibility can potentially save you money on the front end of your home purchase, this specific mortgage loan does come with a variable interest rate that can make future monthly payments difficult to predict.

Federal Housing Authority (FHA) Mortgages

An FHA mortgage is another flexible loan option for borrowers that requires a lesser down payment (3.5%) than its conventional counterpart. Because of their affordability, FHA mortgages can be a great option for first-time home buyers or homebuyers who do not meet the minimum requirements of a conventional loan.

Veterans Affairs (VA) Mortgages

Are you a veteran or active-active duty military? A VA mortgage is a great option for our servicemen and women. VA mortgages offer competitive rates and do not require a down payment which is a great benefit for a first-time purchase.

U.S. Department of Agriculture (USDA) Mortgages

If your home search is taking you to the outskirts of town, a USDA loan could be a beneficial mortgage option for you. Unlike the flexibility of FHA mortgages, USDA loans do require borrowers to meet specific guidelines such as household income limitations, DTI requirements, as the home must be located in a rural area. As you’re considering your mortgage options, you can check edibility requirements here.


When it comes to shopping around for the right mortgage loan, it’s important to understand not only the basic qualifications but also the various factors of each loan product. Loan terms, any applicable fees, as well as mortgage insurance are just some of the cost factors when financing your home. Speaking with your trusted mortgage loan officer can help answer any questions you may about which option is best for you and your goals as a homeowner.

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