Best for: Borrowers with good credit, stable income, and a 3-20% down payment seeking competitive rates.

Conventional loans are the most common type of mortgage and are not backed by the government. Instead, they follow guidelines set by Fannie Mae and Freddie Mac, two federally regulated entities that standardize the mortgage industry. These loans typically require a credit score of at least 620, but borrowers with higher scores can secure even better interest rates.

With fixed-rate and adjustable-rate options, conventional loans offer flexibility in repayment terms. Borrowers who put at least 20% down can avoid private mortgage insurance (PMI), making this an attractive choice for those with strong financial standing.

Because conventional loans have higher credit and income requirements, they are best suited for buyers who have saved for a down payment and want competitive interest rates without additional government fees.

A reverse mortgage is a loan designed for homeowners aged 62 and older, allowing them to convert a portion of their home equity into cash without monthly mortgage payments. This type of loan can provide financial flexibility in retirement, helping seniors cover living expenses, medical costs, or other financial needs while remaining in their homes.

The most common type of reverse mortgage is the Home Equity Conversion Mortgage (HECM), which is insured by the FHA. Borrowers can receive funds as a lump sum, monthly payments, or a line of credit. The loan balance grows over time, and repayment is only required when the homeowner sells the property, moves out, or passes away.

Reverse mortgages are best suited for retirees looking to supplement their income while staying in their home. However, borrowers must continue paying property taxes, homeowners insurance, and maintenance costs. Consulting with a mortgage professional can help determine if this loan is the right fit for your financial goals.

Best for: First-time homebuyers or those with lower credit scores needing a low down payment.

FHA loans are government-backed mortgages insured by the Federal Housing Administration (FHA), designed to make homeownership more accessible, especially for first-time buyers or those with lower credit scores. These loans allow buyers to put down as little as 3.5% if their credit score is 580 or higher.

FHA loans also have more lenient credit and debt-to-income (DTI) requirements, making them ideal for buyers who may not qualify for a conventional loan. However, borrowers must pay mortgage insurance premiums (MIP), which protect lenders in case of default.

This loan type is popular among first-time buyers who need a low down payment and easier qualification process but are okay with paying mortgage insurance for the life of the loan unless refinanced into a conventional mortgage.

VA loans, guaranteed by the Department of Veterans Affairs (VA), offer one of the best mortgage options for eligible military personnel and their families. These loans require no down payment, no private mortgage insurance (PMI), and offer competitive interest rates compared to conventional loans.

Borrowers must meet service eligibility requirements and obtain a Certificate of Eligibility (COE) from the VA. One of the major benefits of VA loans is that they allow sellers to cover closing costs, reducing upfront expenses for buyers.

Because VA loans do not require a down payment and have more flexible credit requirements, they are an outstanding option for veterans and active service members looking for affordable homeownership.

Best for: Low-to-moderate income buyers purchasing a home in eligible rural areas.

USDA loans, backed by the U.S. Department of Agriculture, help buyers purchase homes in designated rural and suburban areas with no down payment required. These loans are ideal for borrowers with low-to-moderate income who might not qualify for conventional loans.

To be eligible, the home must be in an approved USDA location, and buyers must meet income limits based on their area’s median income. USDA loans come with lower interest rates and reduced mortgage insurance costs compared to FHA or conventional loans.

This loan type is perfect for buyers who are open to living in eligible rural communities and want 100% financing with affordable monthly payments.

Best for: Homeowners needing flexible access to funds for home improvements or major expenses.

A Home Equity Line of Credit (HELOC) allows homeowners to borrow against their home’s equity with a revolving credit line, similar to a credit card. This means you can borrow as needed, repay, and borrow again.

HELOCs typically have variable interest rates, meaning payments can fluctuate over time. They are great for funding home renovations, major expenses, or emergencies while keeping financial flexibility.

Homeowners who have significant equity built up in their home and need ongoing access to funds will benefit the most from a HELOC. However, borrowers should be aware of interest rate fluctuations and ensure they can manage repayments effectively.