Types of Mortgage Loans – Which Home Loan is Right for You?

The Kyle Coover Team - Iron Valley Real Estate

Looking to buy a home? One of the most important steps in the process is choosing the right mortgage loan. With so many home loan options available, understanding the differences can help you make an informed decision. Whether you’re a first-time homebuyer, upgrading, or investing, this guide covers the most common types of mortgage loans and how to qualify for each.

1. Conventional Loans

Conventional mortgage loans are not backed by the government and are one of the most popular options for homebuyers.

Minimum Down Payment: 3% (typically 5-20%)
Credit Score Needed: 620+
Loan Highlights: Competitive rates, flexible terms.
Best For: Buyers with good credit and stable income.

2. FHA Loans (Federal Housing Administration)

FHA home loans are government-backed and designed to help those with lower credit scores or smaller down payments.

Minimum Down Payment: 3.5%
Credit Score Needed: 580+ (500 with 10% down)
Loan Highlights: Easier qualification, lower down payment.
Best For: First-time buyers, lower credit borrowers.

3. VA Loans (Veterans Affairs)

VA loans offer unique benefits for eligible military service members and veterans.

Minimum Down Payment: None required.
Credit Score Needed: Typically 620+.
Loan Highlights: No mortgage insurance, favorable terms.
Best For: Veterans, active-duty, and qualifying military personnel.

4. USDA Loans (United States Department of Agriculture)

USDA home loans are aimed at rural and some suburban buyers with moderate incomes.

Minimum Down Payment: None required.
Credit Score Needed: Usually 640+.
Loan Highlights: 100% financing in eligible areas.
Best For: Buyers in rural areas.

5. Jumbo Loans

Jumbo mortgage loans are for high-priced homes that exceed the conforming loan limits set by Fannie Mae and Freddie Mac.

Minimum Down Payment: Typically 10-20%+.
Credit Score Needed: 700+.
Loan Highlights: Finance luxury or high-value properties.
Best For: Buyers of high-end or luxury homes.

6. Adjustable-Rate Mortgages (ARMs)

ARMs have a lower initial rate that adjusts over time based on the market.

Initial Fixed Period: 3, 5, 7, or 10 years.
Credit Score Needed: 620+.
Loan Highlights: Lower starting rate, rate adjusts after fixed period.
Best For: Short-term homeowners, refinancers.

How to Choose the Best Mortgage Loan for You

Each loan type serves a different financial need and borrower profile. Factors like credit score, down payment, income, and location all influence which loan you may qualify for.

While this guide gives you an overview of your options, the best way to find the right fit is to discuss your situation with a qualified lender.

Ready to take the next step?

We work with trusted lenders who can walk you through your mortgage loan options and help you choose the best path to homeownership. Click here to view a list of our preferred lenders and get the process started today!

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Kyle & Jennifer Coover

Hi There!

We’re Kyle & Jennifer Coover, a husband and wife team of REALTORS® serving Pennsylvania & Florida.

We live in the beautiful Pocono Mountains with our three children and our yellow Labrador retriever. We love all things sports, outdoors, and real estate!

We understand how important it is to have a trustworthy and dependable agent when buying or selling a home—that’s exactly why we became REALTORS®. Our mission is to faithfully serve the people of our community. Backed by education, experience, and local expertise, we’re here to guide you every step of the way.

Jennifer holds a Bachelor of Science in Business Administration with a focus in Real Estate, along with a certification in Hospitality & Tourism Management. She is a licensed associate real estate broker in both Florida and Pennsylvania, a Pricing Strategy Advisor (PSA), an Accredited Buyer’s Representative (ABR®), and a certified e-Pro®.

Kyle is also an Accredited Buyer’s Representative (ABR®), a certified Resort & Second-Home Property Specialist (RSPS), and an FAA-certified Part 107 Remote Pilot. As a true Pocono native, he knows the ins and outs of our local communities.

We are proud members of the Real Estate Buyer’s Agent Council (REBAC), and the local, state, and national associations of REALTORS®. To best serve our clients, we subscribe to multiple MLSs across the regions we represent.

Together, we are committed to dedicating our time and resources to helping you find your dream home or sell your property as quickly and smoothly as possible. Our promise is to deliver the highest level of service while always representing your best interests.