Key points before you decide
- Start with the goal: purchase, lower payment, shorter term, cash out, streamline refinance, or investor financing.
- Review the borrower profile: credit, income, debts, assets, property use and any timeline constraints.
- Compare the loan option against total monthly payment, cash to close, mortgage insurance, closing costs and long-term plans.
Choosing the right mortgage loan depends on factors such as down payment, credit profile, eligibility, property type, and long-term financial goals. This comparison chart outlines the most common mortgage loan types to help you understand key differences at a high level.
Common Mortgage Loan Types Compared
| Loan Type | Minimum Down Payment | Mortgage Insurance | Credit Flexibility | Occupancy | Who It’s Best For |
|---|---|---|---|---|---|
| Conventional | As low as 3% | Required below 20% down (PMI) | Moderate to strict | Primary, second home, investment | Buyers with solid credit seeking flexibility |
| FHA | As low as 3.5% | Required (upfront + monthly) | More flexible | Primary residence only | First-time or moderate-credit buyers |
| VA | 0% for eligible borrowers | None (VA funding fee may apply) | Flexible for eligible borrowers | Primary residence only | Veterans, active-duty service members |
| USDA | 0% in eligible areas | Low monthly guarantee fee | Moderate | Primary residence only | Buyers in eligible rural/suburban areas |
Key Differences to Consider
- Down payment: VA and USDA loans may allow zero down payment for eligible borrowers.
- Mortgage insurance: Conventional PMI can be removed, while FHA mortgage insurance typically remains for the life of the loan.
- Eligibility: VA and USDA loans have specific service or location and income requirements.
- Property use: Conventional loans allow the most flexibility for second homes and investment properties.
Which Mortgage Loan Type Is Right for You?
No single loan program is best for every buyer. The right choice depends on your financial profile, homeownership goals, property location, and long-term plans. Comparing loan types early can help you narrow options and avoid surprises during the buying process.
You may also find these detailed guides helpful:
Get Help Comparing Mortgage Options
If you would like help comparing loan programs based on your goals, timeline, and location, contact 360 Mortgage for a straightforward conversation and guidance on next steps.
Disclosure: This page provides general information only and is not a commitment to lend. Loan programs, rates, guidelines, and requirements vary by lender and are subject to change without notice. All loans are subject to underwriting approval and complete documentation review.
NMLS 80777. Licensed mortgage broker in Missouri, Kansas, and Louisiana.
Frequently asked questions
Who is Mortgage Loan Types Comparison Chart best for?
Mortgage Loan Types Comparison Chart may fit borrowers whose goals, documentation and property details line up with the program requirements. A mortgage review is the fastest way to compare options without relying on generic assumptions.
What documents should I prepare?
Most borrowers should be ready to discuss income, assets, debts, credit history, property details and the purpose of the loan. Exact documentation depends on the program and underwriting review.
What is the next step?
The next step is to talk with 360 Mortgage so the team can review your situation, explain available options and outline the application path.