Understand Your Mortgage Options Before You Apply
1MortgageSource is a free, independent guide to home loans — conventional, FHA, VA, USDA, jumbo, refinancing, and home equity. Learn how each loan type works, what lenders look at, and how the mortgage process unfolds from application to closing.
What Is a Mortgage?
A mortgage is a loan secured by real estate, typically used to buy a home or refinance an existing loan. The property itself serves as collateral, which is why lenders evaluate a borrower's credit history, income, debts, and the property's value before approving a loan. In exchange for lending the money, the lender charges interest over a repayment term that commonly runs 15 to 30 years.
Mortgages come in many forms. Government-backed programs like FHA, VA, and USDA loans exist to widen access to homeownership for specific groups of borrowers, while conventional loans follow guidelines set largely by Fannie Mae and Freddie Mac. Jumbo loans cover amounts above conforming loan limits, and existing homeowners can tap built-up equity through a cash-out refinance, home equity loan, or HELOC.
Common Types of Home Loans
Factors That Shape Your Mortgage Options
- Credit score. Higher scores generally unlock more loan programs and better pricing, though minimum requirements vary by loan type and lender.
- Debt-to-income ratio (DTI). Lenders compare your monthly debt payments to your income to gauge how much additional mortgage payment you can reasonably support.
- Down payment. Some programs allow a low or even zero down payment, while others require a larger upfront investment, which can also affect whether mortgage insurance is required.
- Property type and use. Whether the home is a primary residence, second home, or investment property affects eligibility and pricing across loan programs.
- Documentation. Lenders verify income, assets, and employment, and self-employed borrowers often need additional documentation.
Why Compare Loan Programs Before You Apply
Loan type, lender, credit profile, and market conditions all affect the interest rate and terms you're offered — which is why it's worth understanding the programs available to you before signing anything. Use the loan-type guides on this site to see how each program works, then get personalized numbers by requesting quotes from multiple licensed, NMLS-registered lenders.