Skip to main content

Hole 05 · Front Nine — Get Ready

Loan Types

Conventional, FHA, VA, and jumbo loans each fit a different buyer situation. This hole breaks down minimum down payments, mortgage insurance rules, and who each loan type actually favors, so you can walk into a lender conversation already knowing which door to ask about first.

8 min read · Free, no signup

Written by Andrew Moran · Loan Officer · GoRascal | NMLS #1264497

Conventional loans

Conventional loans aren't backed by a government agency, and qualified buyers can put as little as 3% down. Mortgage insurance applies below 20% down but drops automatically once you reach 78% loan-to-value — the only loan type where that removal is automatic rather than requiring a refinance.

  • Down payments as low as 3% for qualified buyers.
  • PMI applies below 20% down, removable automatically at 78% LTV.
  • Often the strongest fit for stronger credit and stable income.

FHA loans

FHA loans accept down payments as low as 3.5% and credit scores as low as 580, making them more forgiving than conventional financing. The trade-off is mortgage insurance that usually lasts for the life of the loan unless you refinance out of it later — a real cost to weigh against the easier entry.

  • 3.5% down payment minimum, 580+ FICO typically accepted.
  • Mortgage insurance usually lasts the life of the loan.
  • A common fit for buyers rebuilding credit or light on cash.

VA and jumbo loans

VA loans, backed by the Department of Veterans Affairs, are built for eligible veterans and service members and often require no down payment and no monthly mortgage insurance. Jumbo loans sit above the conforming loan limit and typically demand stronger credit, larger reserves, and bigger down payments since no government agency backs them.

  • VA — for eligible veterans and service members, often no down payment.
  • Jumbo — for loan amounts above the conforming limit.
  • Jumbo lenders set their own, usually stricter, qualifying rules.

Picking the right door first

Match the loan type to your real situation before you fall for a listing: your down payment cash on hand, your credit band, veteran status, and purchase price all point toward a different door. Ask a lender which type fits before you assume conventional is the only option on the table.

  • Down payment cash on hand narrows the field fast.
  • Veteran or service member status opens the VA door.
  • Purchase price above the conforming limit points toward jumbo.

Mastery check

Prove it out before you move on.

Caddie

Before you play through — quick read of the green:

3quick questions. Get all but one right and this hole is marked played. Unlimited retries — there's no penalty for missing one.

Question 1 of 3

Which loan type usually has the smallest down payment and the most forgiving credit requirement?

Question 2 of 3

What generally happens to FHA mortgage insurance over time?

Question 3 of 3

Who is a VA loan generally built for?

Still stuck? Ask the Caddie.

Hole 4: Down-Payment-Assistance ProgramsHole 6: Pre-Approval