What Home Loans Should You Consider?

Founded in 1976, Bankrate has a long history of helping people make smart financial decisions. We have maintained this reputation for more than four decades by demystifying the financial decision-making process and giving people confidence in what steps to take next. When it comes to home loans, there are a variety of options available to you, depending on your credit score, down payment, and other factors. If you have a strong credit score and can afford to make a sizeable down payment, a conventional mortgage is probably your best option.

The conventional 30-year fixed-rate mortgage is the most popular option for homebuyers. This type of loan offers a fixed interest rate for the life of the loan, meaning your monthly payments will remain the same throughout the loan's duration. Jumbo mortgages are mortgage loan products that are outside the FHFA loan limits. Jumbo loans are more common in higher-cost areas, such as Los Angeles, San Francisco, New York City, and the state of Hawaii, where home prices tend to be higher. If you're looking to finance a home with a sale price that exceeds the latest compliant loan limits, a jumbo loan is probably your best option. Are you having trouble qualifying for a conventional loan due to a lower credit rating or minimal cash reserves for a down payment? Loans backed by FHA and USDA could be a viable option.

These loans are designed to help those with lower credit scores or limited funds for a down payment purchase a home. They also offer more flexible terms than conventional loans. For military service members, veterans, and eligible spouses, VA-backed loans are often better than a conventional loan. These loans offer competitive interest rates and don't require any down payment or private mortgage insurance. They also come with more flexible terms than conventional loans. Not all home loans are created equal.

Knowing what type of loan is best for your situation prepares you to talk to lenders and get the best deal. Whether you're looking for a conventional mortgage, jumbo loan, FHA or USDA loan, or VA-backed loan, Bankrate can help you find the right lender for your needs.