🤔Which Home Loan Is Right for You? 🏠 4 Options to Explore

Hello Hampton Roads,

Which Mortgage Fits You Best? 

When you are buying a home, one of the first big choices you’ll face is which type of mortgage to go with—and it’s not a decision to take lightly. The right loan can lower your monthly payment, reduce your upfront costs, and give you more financial breathing room down the road. With today’s high home prices and unpredictable interest rates, choosing the right mortgage is more important than ever.

In this post, we’ll break down four of the most common home loan options—Conventional, FHA, VA, and USDA—so you can compare key features, understand who qualifies, and figure out which loan best fits your financial goals.

🤔Which Home Loan Is Right for You? 🏠 4 Options to Explore

Key Takeaways

  • ✅ There are four main types of home loans: Conventional, FHA, VA, and USDA.

  • ✅ Each loan type is tailored for different buyer situations and financial profiles.

  • ✅ Down payment, credit score, and property location significantly influence loan eligibility.

  • ✅ Choosing the right loan can reduce monthly costs and increase approval odds.

  • ✅ VA and USDA loans offer 100% financing options with specific eligibility requirements

What Are the Main Types of Home Loans?

Here are the four most widely used mortgage types:

  1. Conventional Loans – Best for buyers with strong credit and steady income.

  2. FHA Loans – Great for first-time buyers or those with lower credit scores.

  3. VA Loans – Exclusive to veterans, service members, and eligible spouses.

  4. USDA Loans – Designed for buyers in rural or suburban areas who meet income limits.

Each loan has its own requirements and benefits, so the right choice depends on your personal financial picture.


Loan Type Minimum Down Credit Score Key Features
Conventional 3% 620+ PMI if under 20% down, flexible terms, lower rates with good credit
FHA 3.5% 580+ Lenient credit requirements, mortgage insurance required, government-backed
VA 0% No minimum (lender discretion) No PMI, competitive rates, must be eligible military/veteran
USDA 0% 640+ recommended Rural areas only, income limits apply, lower mortgage insurance

Here are the Pros and Cons:

1. Conventional Loans

Who it's for: Buyers with good credit (usually 620 or higher) and a stable income.

Pros:

  • Lower overall borrowing costs for buyers with excellent credit
  • Can be used for primary, secondary, or investment properties
  • More flexible loan structures and terms

Cons:

  • Stricter credit and income requirements
  • PMI adds to monthly cost unless you put 20% down

Bottom line: A solid choice if you have good financial standing and want flexibility.

2. FHA Loans

Who it's for: First-time homebuyers, lower-income buyers, and those with credit scores starting at 580.

Pros:

  • Easier to qualify for than conventional loans
  • Lower down payment requirements
  • Allows financial gifts or grants to cover down payment

Cons:

  • Mortgage insurance can be expensive and lasts the life of the loan (if putting down less than 10%)
  • Property must meet strict FHA appraisal standards.

Bottom line: A strong option if your credit isn’t perfect or you’re working with a limited down payment.

3. VA Loans

Who it's for: Active-duty military, veterans, National Guard members, and eligible surviving spouses.

Pros:

  • No down payment makes homeownership more accessible
  • No monthly PMI helps reduce costs
  • Favorable loan terms and rates

Cons:

  • Only available to eligible military-connected buyers
  • Funding fee adds to upfront costs

Bottom line: If you qualify, VA loans offer some of the best terms available.

4. USDA Loans

Who it's for: Buyers in qualifying rural or suburban areas with low-to-moderate income.

Pros:

  • No down payment required
  • Lower mortgage insurance costs than FHA
  • Great option for buyers outside of urban areas

Cons:

  • Only available in specific geographic areas
  • Income limits apply based on household size and region

Bottom line: Perfect if you're buying in a rural area and meet income requirements.


💡 Pro Tip:
Virginia—especially the Hampton Roads area—offers a variety of local programs and grants for both first-time and repeat homebuyers. Many of these options provide low- to no-down-payment assistance through loans or grants. Qualified buyers may be able to cover their down payment, closing costs, or both.

👉 Learn more here

Which Loan Type Is Most Popular in Hampton Roads?

The best loan for you also depends on local trends and eligibility. For example, in regions with a strong military presence like Hampton Roads, VA loans are widely used. FHA loans are popular in urban markets where first-time buyers are more common. USDA loans are frequently used in rural counties and agricultural zones.

According to HMDA data for 2024, here are the number of purchase loans by type in our area:
2024 VA Beach Norfolk MSA Purchase Loans by Type


Conventional purchase loans were the majority accounting for 42.70% of purchase loans with VA loans coming in close 2nd accounting for 41.08% of purchase loans. 

Loan Type # of Records $ Amount % of Total Loans
Home Purchase, Conventional 18,081 $5,892,455,000 42.70%
Home Purchase, FHA 6,781 $2,093,635,000 16.02%
Home Purchase, VA 17,406 $6,721,610,000 41.08%
Home Purchase, USDA 63 $12,955,000 0.15%

Frequently Asked Questions

Can I qualify for more than one type of loan?
Yes. Many buyers qualify for multiple loan programs. Your lender will compare your options based on your finances, location, and goals.

Is one loan always better than the others?
Not necessarily. Each loan serves different buyers. The best loan for you balances cost, eligibility, and your long-term goals.

What if I don’t have enough saved for a down payment?
FHA, VA, and USDA loans are all low- or no-down-payment options. You may also qualify for local down payment assistance programs.

What’s the fastest way to get pre-approved?
Work with a trusted lender who can review your credit, income, and debt-to-income ratio. You can usually get a pre-approval letter in a few days.

Final Thoughts

Choosing the right mortgage isn't just about what you qualify for—it’s about what helps you achieve homeownership on your terms. Whether you're buying your first home, upgrading, or relocating, understanding your loan options helps you plan smarter and avoid surprises.

A good next step? Speak with an experienced real estate agent and a trusted lender. Together, we’ll help you navigate the details, compare options, and move forward with confidence.

Want to explore your loan options with a pro by your side? Schedule your free homebuyer consultation today.

Thanks for Reading,






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