Buying a home is one of the biggest financial steps most people will take. One of the first questions new buyers ask is: “What type of loan should I get?” The truth is, there isn’t a one-size-fits-all answer — different loans work better for different buyers. Here’s a simple breakdown of the most common types of home loans, so you can feel more confident when weighing your options.

1. Conventional Loans

These are the most common type of mortgage. They aren’t backed by the government, which means lenders set their own requirements. Typically, you’ll need:

• A solid credit score (often 620 or higher).

• A down payment (as low as 3–5%, but 20% helps you avoid private mortgage insurance, or PMI).

Best for: Buyers with stable income and good credit who want flexibility.

2. FHA Loans

FHA loans are backed by the Federal Housing Administration. They’re popular with first-time homebuyers because they require lower credit scores (as low as 580) and smaller down payments (as little as 3.5%).

Keep in mind: You’ll have to pay mortgage insurance, which adds to your monthly cost.

Best for: Buyers with limited savings or lower credit scores.

3. VA Loans

If you’re a veteran, active-duty service member, or eligible surviving spouse, VA loans can be an incredible option. They’re backed by the Department of Veterans Affairs and offer:

• No down payment.

• No private mortgage insurance.

• Competitive interest rates.

Best for: Eligible veterans and military families.

4. USDA Loans

The U.S. Department of Agriculture offers loans to buyers purchasing in designated rural and suburban areas. These loans often require no down payment and feature low interest rates.

Best for: Buyers looking outside big cities who meet income eligibility requirements.

5. Jumbo Loans

If you’re buying a more expensive property that goes above the “conforming loan limit” (set by Fannie Mae and Freddie Mac), you’ll need a jumbo loan. These require:

• Strong credit.

• A larger down payment.

• Solid income and financial history.

Best for: Buyers purchasing high-value homes.

Final Thoughts

Choosing the right loan comes down to your personal situation — your credit score, savings, income, and even where you’re buying. Talking with a lender early in the process can help you see what you qualify for and which loan type best fits your goals.

Buying a home is exciting, and understanding your financing options is the first big step toward unlocking the front door of your new place.