Home Buyers: Understand Your Mortgage Options

by | Jan 22, 2019 | Buying A Home | 0 comments

Before you apply for a mortgage loan, it’s good to have some background information to compare and understand different mortgage types. We encourage you to look into all of your options with your mortgage lender, who can answer questions in depth and will help you determine what type of loan is best for your financial situation.

Mortgage Types

mortgage options

Conventional Loan

A conventional loan is not insured or guaranteed by the government. These loans make up about 60% of all mortgage options. With a conventional loan, you can go as low as 3% for a down payment, but will pay mortgage insurance for any down payment less than 20%.

FHA Loan

An FHA loan can only be made by FHA-approved lenders and is insured by the Federal Housing Administration (FHA). Most FHA loans require 3.5% as a down payment with a credit score above 580. Mortgage insurance lasts the life of the loan, no matter how much your down payment is on the home.  


If you are a first-time buyer in Connecticut, Connecticut Housing Finance Authority offers a variety of loans. You must be a first-time homebuyer or buy in a Federally Targeted Area to qualify for a CHFA loan, which offers below-market interest rates.


Offered to rural property owners by the U.S. Department of Agriculture, USDA loans offer 100% financing with 0% down. In addition, mortgage insurance rates are lower than FHA or conventional loans, although there are strict requirements to qualify, including household income and type of property.

VA Loan

The United State Department of Veterans Affairs established the VA loan program to help veterans and their families with home financing. VA loans offer 100% financing, allowing borrowers to buy a home with no down payment. VA loans are provided by private lenders to veterans or a spouse or dependent of active duty members.

Unless you plan to purchase a home in cash, a mortgage loan is part of the process of buying a home. We recommend working with a lender you trust to help you, and always turn to a professional for advice.

Looking for a lender? We work with several that we are happy to recommend. Reach out for more information!

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