Which loan type is best for me
The right mortgage depends on your score, down payment, location, and status. This guide compares the big 4 programs and when each tends to shine.
Fast comparison
- Conventional Best for solid credit and at least 3 percent down. Lower monthly mortgage insurance as scores rise. Great for second homes and most condos.
- FHA Helpful with modest scores or higher debt ratios. 3.5 percent down is common. Upfront and monthly insurance applies.
- VA For eligible service members and veterans. Often 0 down and no monthly mortgage insurance. Funding fee may apply.
- USDA For eligible rural areas and income ranges. Often 0 down. Property location and household income limits apply.
Minimum scores and down payments
- Conventional Many lenders want 620 or higher. Down payment from 3 percent.
- FHA Often works from 580 with 3.5 percent down. Lower scores can require more down.
- VA No official minimum score in the rule book. Many lenders look for 600 to 620. Down payment is often 0.
- USDA Automated approvals often like 640. 0 down if you qualify by area and income.
Guidelines vary by lender and market. A strong local lender matters.
What the monthly payment looks like
- Conventional Mortgage insurance can be removed later when equity grows. Pricing improves with higher scores.
- FHA Monthly insurance is usually required for at least 11 years, sometimes for the life of the loan, depending on down payment.
- VA No monthly mortgage insurance. A 1 time funding fee may apply unless exempt.
- USDA Has a modest upfront and monthly guarantee fee that stays for the loan term.
Who each loan helps most
- Conventional Buyers with higher scores, larger down payment, or planning to remove mortgage insurance later.
- FHA Buyers rebuilding credit or needing more flexible debt ratios.
- VA Eligible borrowers who want low monthly cost and strong protections.
- USDA Buyers in qualifying areas who meet income rules and want 0 down.