All 8 Mortgage Loan Types
Full breakdown of every loan type — what it costs, who qualifies, and which lender to use. No broker upsell, just the facts.
Conventional Loan
Buyers with good credit and stable W-2 income
Pros
- ✓No upfront mortgage insurance premium
- ✓PMI drops automatically at 20% equity
- ✓Wide range of competing lenders
- ✓Flexible 10–30 year terms
Cons
- ✗Stricter credit and income requirements than FHA
- ✗PMI required if down payment is under 20%
- ✗Subject to conforming loan limits
Compare conventional rates instantly on Credible
Credible →FHA Loan
First-time buyers and those rebuilding credit
Pros
- ✓Lower minimum credit score (580 with 3.5% down)
- ✓More flexible debt-to-income ratios
- ✓Assumable by future buyer — valuable when rates rise
- ✓Gift funds allowed for down payment
Cons
- ✗Upfront MIP of 1.75% of loan amount
- ✗Annual MIP for life of loan if down payment < 10%
- ✗FHA loan limits lower than conventional in some areas
- ✗Stricter property condition requirements
Check FHA rates and eligibility on LendingTree
LendingTree →VA Loan
Active duty military, veterans, and surviving spouses
Pros
- ✓Zero down payment required
- ✓No private mortgage insurance — ever
- ✓Typically below-market interest rates
- ✓No prepayment penalty
Cons
- ✗VA funding fee required (1.25%–3.3% of loan)
- ✗Must have VA entitlement (service requirements apply)
- ✗Primary residence only — no investment properties
- ✗Some sellers wary of VA appraisal process
Rocket Mortgage specializes in VA loans with fast pre-approvals
Rocket Mortgage →USDA Loan
Buyers in rural and suburban areas with moderate income
Pros
- ✓Zero down payment required
- ✓Below-market interest rates
- ✓Low annual guarantee fee vs. FHA MIP
- ✓No prepayment penalty
Cons
- ✗Geographic eligibility restrictions (rural/suburban only)
- ✗Household income limits apply
- ✗Primary residence only
- ✗Longer processing times than conventional
Check USDA eligibility and compare rates on Better.com
Better.com →Jumbo Loan
High-value property buyers above the conforming limit
Pros
- ✓Finance luxury properties in one loan
- ✓No conforming limit cap
- ✓Competitive rates for well-qualified borrowers
- ✓Flexible terms available
Cons
- ✗Strict underwriting — full income and asset documentation
- ✗Rates typically higher than conforming loans
- ✗Large reserves requirement (12+ months PITI)
- ✗Fewer lenders and less competitive market
LendingTree connects you with jumbo specialist lenders
LendingTree →DSCR Loan
Real estate investors qualifying on rental income
Pros
- ✓No personal income verification required
- ✓Qualify on property cash flow (rent vs. PITIA)
- ✓Scale your rental portfolio faster
- ✓Can close in an LLC
Cons
- ✗Higher rates than owner-occupied loans
- ✗Larger down payment required (20–25%)
- ✗Not for primary residences
- ✗Fewer lenders offer this product
LendingTree connects you with DSCR-specialist lenders nationwide
LendingTree →Hard Money Loan
Fix-and-flip investors needing fast capital
Pros
- ✓Approval and funding in days, not weeks
- ✓Credit score is secondary — asset value matters more
- ✓Distressed or non-warrantable properties accepted
- ✓Short-term flexibility for renovation projects
Cons
- ✗Very high interest rates (10–15% is common)
- ✗Short repayment terms (6–24 months)
- ✗High origination fees (2–5 points)
- ✗Risk if project timeline or sale drags out
LightStream offers competitive fast-funding alternatives for qualified borrowers
LightStream →Bridge Loan Loan
Homeowners buying a new home before selling the current one
Pros
- ✓Buy the new home without a sale contingency
- ✓Competitive offers in tight markets
- ✓Fast closing timeline possible
- ✓Flexible repayment once old home sells
Cons
- ✗High interest rates for short-term capital
- ✗Typically 6–12 month term
- ✗Carries two mortgage payments temporarily
- ✗Risk if the existing home sells slowly or below price
Better.com offers bridge loan alternatives and instant rate quotes
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