15 Types of Mortgages

Buying a home is one of the biggest financial decisions you’ll ever make, and choosing the right mortgage can have a lasting impact on your budget and long-term goals. But with so many mortgage options available, how do you know which one is the best fit?

Whether you’re a first-time homebuyer, a seasoned investor, or somewhere in between, understanding the different types of mortgages can help you secure the best loan for your needs. Some loans offer lower down payments, while others cater to specific professions or property types. In this guide, we’ll break down 15 common mortgage types—so you can compare your options and take the next step toward homeownership.

Table of Contents

1. Conventional mortgage

Best for: Borrowers with good credit (620+), stable income, and a manageable debt load

Conventional mortgages are home loans that aren’t part of a government program. They often have stricter qualification requirements but can be more affordable for creditworthy borrowers.

The two types are:

Conforming loans meet guidelines set by Fannie Mae and Freddie Mac, making them easier to sell to investors. They typically offer lower interest rates and fees..
Non-conforming loans don’t meet these standards, so they stay with the original lender. These may be jumbo loans or mortgages for borrowers with unique financial situations.

Here are the basic requirements are a conventional mortgage:

Basic criteria	Range
Max. conforming loan limit*	$806,500 – $1,209,750
Min. down payment	3% – 25%
Min. credit score	620 – 720
Max. DTI	36% – 45%

Loan limits vary by location and property type. High-cost areas allow higher loan limits.

If you don’t meet these requirements, you might explore a non-conforming loan (e.g., a jumbo loan) or government-backed options, such as an FHA loan for those with lower credit.

No matter the loan type, take your time to assess affordability. Using a mortgage calculator and comparing lenders can help you secure the best rates and terms.

Is a conventional mortgage right for you?

Conventional loans are a solid option for many homebuyers. They offer lower rates and fewer fees than FHA loans, but they require private mortgage insurance (PMI) if your down payment is under 20%. If you don’t meet the credit or down payment requirements, government-backed loans, including FHA or VA loans, may be a better fit.

Before choosing a loan, compare multiple lenders, and use a mortgage calculator to estimate your monthly payments and total costs.

What Is a Second Mortgage? How It Works and Expert Recommendations

What are the best conventional mortgage lenders?

If you’re ready to start shopping for a conventional mortgage, we recommend starting with our list of the best mortgage lenders. We’re fans of SoFi, in particular—its close-on-time guarantee is unmatched if you need to close by a certain date.

2. FHA loan

Best for: Those who have a lower credit score or a small down payment but still want to buy a home

FHA loans are government-backed mortgages designed for borrowers with lower credit scores and smaller down payments. These loans are insured by the Federal Housing Administration (FHA), making lenders more willing to approve applicants who don’t qualify for conventional loans.

Here are the FHA loan requirements:

Criteria	Requirement
Max. loan limit*	$524,225 – $1,814,625
Min. down payment	3.5% (credit score 580+) – 10% (credit score 500–579)
Min. credit score	500+
Max. DTI	40% – 50%

Loan limits vary based on home location and unit type.

FHA loans come with mortgage insurance premiums (MIP), which increase borrowing costs over time. If you have good credit (620+) and at least 10% down, a conventional loan may be a more affordable long-term option.

What are the best FHA mortgage lenders?

Many lenders—including several of our highest-rated mortgage lenders—offer FHA mortgages. We like Rocket Mortgage for its specialty programs for first-time homebuyers, which might appeal to those considering an FHA loan.

3. Jumbo loan

Best for: High-income borrowers who need large loan amounts and can meet stricter approval criteria

Jumbo loans exceed conforming loan limits, making them ideal for high-cost housing markets or luxury properties. Because these loans aren’t backed by Fannie Mae or Freddie Mac, lenders have stricter requirements to offset the added risk.

These are the typical jumbo loan requirements:

Criteria	Requirement
Loan amounts (2025)	Over $806,500*
Min. credit score	680 – 720
Max. DTI	36% – 43%

*For one-unit properties in most areas of the U.S.; Loan limits vary by county and home type.

Jumbo loans often come with higher interest rates and larger down payments. If your loan amount is just above the conforming limit, check whether you qualify for a high-balance conforming loan, which has lower rates and easier approval than a jumbo loan.

What are the best jumbo loan lenders?

All of our team’s best mortgage lenders offer jumbo loans—consider starting with SoFi, which offers competitive interest rates and flexible loan options.

4. VA loan

Best for: Veterans, active-duty service members, and eligible surviving spouses looking for a mortgage with no down payment

VA loans are government-backed mortgages available to eligible military borrowers. These loans are issued by private lenders but guaranteed by the U.S. Department of Veterans Affairs (VA), which reduces risk for lenders and allows for favorable loan terms.

Unlike conventional and FHA loans, VA loans do not have a set loan limit for most borrowers. However, lenders may impose their own limits based on a borrower’s financial profile.

VA loan benefits:

No down payment required (for most borrowers)
No private mortgage insurance (PMI)
Competitive interest rates
Flexible credit and debt-to-income (DTI) requirements
One-time VA funding fee (varies by loan amount and down payment)

Here are basic VA loan requirements:

Description	Req.	Note
Max. loan amount	None	No official limit, but lenders may set limits based on creditworthiness
Min. down payment	0%	VA funding fee applies unless exempt
Min. credit score	None	Lenders may require a 620+ score
Max. DTI	None	Lenders may require compensating factors if DTI exceeds 41%

While VA loans offer significant benefits, they are only available to eligible service members with a valid Certificate of Eligibility (COE). Some lenders may have their own additional requirements. If you’re eligible, a VA loan can be one of the most affordable mortgage options available.

What are the best VA mortgage lenders?

Of our highest-rated mortgage lenders, we think Navy Federal Credit Union is the best place for veterans and military members to start shopping. It offers excellent benefits for members, including a rate match guarantee and a no-refi rate drop program.

5. USDA loan

Best for: Low- to moderate-income homebuyers in rural and suburban areas looking for 100% financing

USDA loans, backed by the U.S. Department of Agriculture (USDA), help make homeownership more accessible for those who meet income and location requirements. They offer no down payment, making them one of the few options for 100% financing.

The two types of USDA home loans are:

Guaranteed Loan Program: Issued by private lenders and backed by the USDA.
Direct Loan Program: Issued directly by the USDA to low-income borrowers.

USDA loan benefits:

No down payment required
Lower mortgage insurance costs than FHA loans
Competitive fixed interest rates
Flexible credit requirements
Closing costs can often be rolled into the loan

These are basic USDA loan requirements:

Program	Guaranteed Loan	Direct Loan
Down payment	0%	0%
Income limits	Moderate income	Low to very low income
Min. credit score	No official req.	No official req.
Max. repayment term	30 years	33 years (up to 38 for very low income)
How to apply	Through USDA-approved lenders	Directly with the USDA

USDA loans are only available for homes in eligible rural and suburban areas, as determined by the USDA. Income limits also apply, so it’s important to check eligibility before applying.

What are the best USDA loan lenders?

If you’re eligible for a Direct Loan through the USDA, we recommend starting there.

If you’re looking for a Guaranteed Loan, the USDA lists Quicken Loans as one of its top national Guaranteed Rural Housing lenders—and Quicken is one of our highest-rated mortgage lenders.

6. Physician mortgage loan

Best for: Doctors and medical professionals with high student loan debt who need a low- or no-down-payment mortgage

Physician mortgage loans, also called doctor loans, are designed specifically for medical professionals who might struggle to qualify for traditional mortgages due to high student loan debt. These loans allow doctors, dentists, and other healthcare professionals to qualify with minimal income history and low or no down payment.

Physician loan benefits:

No private mortgage insurance (PMI), even with 0% down
High loan amounts available
Flexible debt-to-income (DTI) calculations, often excluding student loans from DTI
Can close before starting a job with an employment contract

Here are the basic requirements for a physician loan:

Criteria	Requirement
Employment	Proof of employment or signed contract
Min. credit score	700+ (varies by lender)
Down payment	0% – 10% (varies by lender)
Max. DTI	Typically higher than conventional loans, with student loans excluded in some cases

These loans are available through select lenders and are generally open to medical doctors (MDs), dentists (DDS/DMDs), veterinarians (DVMs), and other healthcare professionals. While they offer unique advantages, physician loans may have higher interest rates than conventional mortgages, so comparing options is essential.

What are the best lenders offering doctor loans?

Our team determined that Bank of America is one of the best physician mortgage lenders. You can close on a Bank of America mortgage before you start your job—and loans are available to the following medical professionals:

7. No-income-verification mortgage

Best for: Self-employed borrowers or individuals with significant assets but irregular income

No-income-verification mortgages (also called stated-income loans) allow borrowers to qualify without traditional income documentation, such as tax returns or W-2s. Instead, lenders may verify income using bank statements, asset holdings, or other alternative methods.

These loans were common before the 2008 financial crisis but are now restricted due to tighter regulations. Most lenders that still offer them require high credit scores and large down payments.

Criteria	Requirement
Min. credit score	700+ (varies by lender)
Down payment	20% – 35%
DTI	No set limit, but must show strong financial reserves
Income documentation	Alternative verification required (bank statements, assets)

While these loans provide flexibility for self-employed individuals, they carry higher interest rates and are harder to find. Few reputable lenders offer these mortgage loans in 2025.

8. Shared appreciation mortgage

Best for: Homebuyers looking to reduce upfront costs in exchange for sharing future home appreciation

A shared appreciation mortgage (SAM) allows lenders or investors to share in a home’s future appreciation in exchange for offering a lower interest rate or down payment assistance. This arrangement can help buyers afford a home with less upfront cash, but it reduces the owner’s equity gains when selling.

These are the types of shared appreciation mortgages:

Type	Description
Private lender SAMs	Offered by some banks or investment firms; borrowers trade equity for better loan terms
Government/local SAMs	Some cities and states offer shared appreciation programs to increase homeownership affordability.

While a shared appreciation mortgage can lower monthly payments, it also means giving up part of your home’s future value. Be sure to evaluate whether the long-term tradeoff is worth it.

We recommend starting with your local government to determine whether SAMs are available in your area.

9. Investment property loan

Best for: Borrowers looking to finance rental properties or non-primary residences

Investment property loans are designed for purchasing rental properties or homes that won’t be owner-occupied. Since investment properties are riskier for lenders, these loans often require higher down payments and stricter credit qualifications.

Criteria	Requirement
Down payment	15% – 25%
Min. credit score	680+ (varies by lender)
Max. DTI	43% (lower preferred)
Income verification	Proof of rental income may be required

Lenders often require higher reserves for investment property loans, meaning you may need six to 12 months of mortgage payments in savings before qualifying.

What are the best lenders for investment property loans?

We recommend considering New American Funding for an investment property loan.

10. Low-down-payment mortgage

Best for: Borrowers who qualify for financing but have limited savings for a down payment

Many lenders offer low-down-payment mortgage options, which allow buyers to purchase a home with as little as 3% to 5% down. However, private mortgage insurance (PMI) is often required when putting down less than 20%.

These are the types of low-down-payment mortgages you might consider:

Loan type	Min. down payment	PMI required?
Conventional 97 loan	3%	Yes
FHA loan	3.5%	Yes
VA loan	0%	No
USDA loan	0%	No

While low-down-payment mortgages help homebuyers enter the market sooner, they increase long-term costs due to PMI and higher interest rates.

11. Adjustable-rate mortgage

Best for: Borrowers who want lower initial interest rates and plan to move or refinance before rates adjust

An adjustable-rate mortgage (ARM) has an initial fixed-rate period (typically five, seven, or 10 years) before the rate adjusts periodically based on market conditions.

Here are ARM features to know:

Term	Fixed-rate period	Adjustment period
5/1 ARM	5 years	Adjusts manually
7/1 ARM	7 years	Adjusts annually
10/1 ARM	10 years	Adjusts annually

While ARMs start with lower rates, they can increase significantly over time, making them less predictable than fixed-rate mortgages.

What are the best lenders for ARMs?

Rocket Mortgage is one of our highest-rated mortgage lenders. It offers adjustable-rate loans that are fixed for five to 10 years, and then the rate changes every six months.

12. Fixed-rate mortgage

Best for: Borrowers who prefer predictable monthly payments and long-term stability

A fixed-rate mortgage has an unchanging interest rate throughout the loan term, making monthly payments consistent and predictable.

These are typical features of a fixed-rate mortgage:

Loan term	Typical interest rate (2025)	Best for
15-year fixed	Lower rate, higher monthly payment	Borrowers who want to pay off their home faster
30-year fixed	Higher rate, lower monthly payment	Higher rate, lower monthly payment

A fixed-rate mortgage is ideal for budget-conscious buyers who plan to stay in their home long-term.

What are the best fixed-rate mortgage lenders?

SoFi is our recommended lender to start shopping with due to its competitive fixed rates and several member benefits.

13. Bridge loan

Best for: Homeowners who need short-term financing to buy a new home before selling their current one

A bridge loan is a temporary loan that covers the down payment on a new home while waiting for your current home to sell. It’s useful for sellers in competitive markets who want to buy before selling.

These are the features of a bridge loan:

Feature	Typical requirement
Loan term	6 months – 3 years
Min. credit score	680+
Down payment	20% or home equity as collateral

Bridge loans help homeowners secure new properties quickly but come with higher interest rates and short repayment terms.

When does a home equity line of credit (HELOC) make more sense than a bridge loan?

14. Reverse mortgage

Best for: Homeowners 62+ years old who want to access home equity without selling their home

A reverse mortgage allows seniors to convert home equity into cash without making monthly payments. Instead of paying the lender, the lender pays the homeowner, and the loan is repaid when the home is sold or the owner moves out.

These are typical reverse mortgage features:

Requirement	Details
Age limit	62+
Loan type	FHA home equity conversion mortgage (HECM)
Repayment	Due when selling or moving out
How are funds received?	Lump sum, monthly payments, or line of credit

Reverse mortgages have several pros and cons: They provide financial flexibility but reduce home equity and can be expensive due to interest and fees. Be sure to consider your long-term financial goals before proceeding.

What are the best reverse mortgage lenders?

Among the highest-rated reverse mortgage lenders, Longbridge Financial stands out for its excellent personalized service and positive customer reviews.

15. Mortgage refinance

Best for: Current homeowners looking to lower their interest rate, reduce monthly payments, access home equity, or shorten their loan term.

Mortgage refinancing allows homeowners to replace their current mortgage with a new loan—often to secure a lower interest rate, lower payments, or tap into home equity. Whether you want to save money over time, pay off your home faster, or consolidate debt, refinancing can be a useful tool.

Refinance type	Best for	Features
Rate-and-term refi	Lowering monthly payments or reducing total interest	Adjusts loan rate, term, or both; does not provide cash
Cash-out refi	Homeowners needing cash for renovations, debt, or other expenses	Replaces current loan with a larger one; difference paid in cash
Cash-in refi	Borrowers wanting to reduce their loan balance or remove PMI	Allows lump-sum payment to qualify for a lower rate or remove PMI
Streamline refi	FHA, VA, or USDA borrowers seeking an easier process	Requires less paperwork and may waive appraisal or income verification

Refinancing can be a powerful financial move, but be sure to compare lenders and loan options to maximize your savings.

What are the best mortgage refinance lenders?

SoFi is the highest-rated mortgage refinance company we’ve rated due to the stellar digital experience it offers.

Mortgage Refinance Calculator

About our contributors

Written by Megan Hanna, CFE, MBA, DBA

Dr. Megan Hanna is a finance writer with more than 20 years of experience in finance, accounting, and banking. She spent 13 years in commercial banking in roles of increasing responsibility related to lending. She also teaches college classes about finance and accounting.