Loan Programs Without The Mortgage Gobbledygook.
Every borrower is different. The best mortgage for one person may be completely wrong for someone else. Your income, credit, down payment, property type, and long-term goals all matter.
Translation: there is no one-size-fits-all mortgage. But there is probably a loan program that makes more sense than the others.
Compare Mortgage Loan Programs
Here are the main loan options I help buyers and homeowners compare. Some are for first-time buyers. Some are for veterans. Some are for investors. Some are for self-employed borrowers who are tired of being punished for not having a boring W-2 job.
Conventional Loans
Conventional loans are the most common mortgage option and can be a strong fit for many people.
- Best for: People who have their life together, buyers with income below the area median, investors who can validate their income
- Down payment: As little as 3% in some cases
- Good to know: Versatile - Can be used for primary homes, second homes, and investment properties
FHA Loans
FHA loans are popular with buyers who need more flexible credit guidelines. They are often used by first-time buyers, but they are not only for first-time buyers.
- Best for: Buyers with credit scores under 680 or those who want the maximum purchasing power
- Down payment: Typically 3.5%
- Good to know: FHA offers lower rates than conventional, but mortgage insurance usually sticks for the life of the loan.
VA Loans
VA loans are a powerful benefit for eligible veterans, active-duty service members, and some surviving spouses. This can be one of the strongest mortgage options available and is my favorite program available
- Best for: Active duty and retired veterans
- Down payment: 0%
- Good to know: Low rates without monthly mortgage insurance
USDA Loans
USDA loans are designed for eligible buyers purchasing homes in qualifying areas.
- Best for: Strong credit buyers who want a zero-down option in qualifying areas
- Down payment: 0%
- Good to know: Income limits and geographic restrictions apply.
DSCR Loans
DSCR loans are built for real estate investors and focus more on the income potential of the property than traditional personal income documentation.
- Best for: Real estate investors and rental property buyers who want financing with less paperwork
- Income focus: Property cash flow instead of traditional employment income
- Good to know: Ability to repay is based on subject property cash flow.
Bank Statement Loans
Bank statement loans may help self-employed borrowers, business owners, and 1099 earners qualify using bank deposits instead of standard tax return income documentation.
- Best for: Self-employed borrowers and business owners whose tax returns don't tell the whole story
- Income review: Personal or business bank statements may be used
- Good to know: Bank deposits are used to determine income instead of tax returns.
Jumbo Loans
Jumbo loans are used when the loan amount is above standard conforming loan limits. They are commonly used for higher-priced homes.
- Best for: Higher loan amounts and higher-priced homes
- Guidelines: Credit, reserves, debt ratio, and down payment requirements may be stricter
- Good to know: Structure matters, and jumbo loans allow for more unique options.
Down Payment Assistance
Down payment assistance programs may help eligible buyers reduce the amount needed upfront. Availability depends on location, income, loan type, and program guidelines.
- Best for: Buyers who need help with upfront funds without any other way
- Assistance type: Grants, forgivable loans, or deferred loans may be available
- Good to know: This should be used as a last resort, but can benefit some people become home owners.
The “Best” Loan Program Depends On The Full Picture.
A lot of people start by asking, “What is the best loan program?” The real answer is annoying but true: it depends. A conventional loan might beat FHA for one buyer, while FHA might make more sense for another.
My job is to help you figure this out. We consider things like monthly payment, cash to close, mortgage insurance, rate, break- even points, and how the loan fits your needs/wants/goals.
You bring the scenario. I will help translate the mortgage nonsense.
Not Sure Which Loan Program Fits?
That is completely normal. Most buyers do not know which loan program is best until we take an application and have a conversation.