Which Mortgage Type Is Right for You?
Answer 5 quick questions to get your personalized recommendation
What is your current credit score range?
How much can you put down as a percentage of the home price?
Have you served in the U.S. military?
Are you looking in urban DFW or rural areas?
What's most important to you?
Your Best Match:
Quick Comparison: All Loan Types
Deep Dive: Each Loan Type
FHA Loan
The accessible option for first-time buyers
Pros:
- Lower credit score requirements (580+)
- Smaller down payment (3.5%)
- More lenient debt-to-income ratios
- Easier to qualify after bankruptcy/foreclosure
Cons:
- Mortgage insurance for life of loan
- Upfront mortgage insurance premium (1.75%)
- Lower loan limits than conventional
- Property must meet FHA standards
Conventional Loan
The standard choice for strong borrowers
Pros:
- PMI can be removed at 20% equity
- Higher loan limits available
- More property type flexibility
- Better rates with excellent credit
Cons:
- Higher credit score required (620+)
- Stricter income/employment verification
- Larger down payment recommended (5%+)
- PMI required if less than 20% down
VA Loan
Exclusive benefit for those who served
Pros:
- No down payment required
- No mortgage insurance
- Competitive interest rates
- No prepayment penalties
Cons:
- Only for military/veterans/families
- VA funding fee (1.4-3.6% of loan)
- Property must meet VA standards
- Seller may resist VA offers
USDA Loan
Zero-down option for rural buyers
Pros:
- No down payment required
- Low mortgage insurance rates
- Flexible credit requirements
- Below-market interest rates
Cons:
- Property must be in eligible rural area
- Income limits apply
- Longer processing times
- Annual mortgage insurance fee
Understanding PMI (Private Mortgage Insurance)
PMI is required on conventional loans when you put down less than 20%. Calculate what you'll pay and learn when you can remove it.
PMI Calculator
DFW First-Time Buyer Programs
Texas and DFW-area programs that can help with down payments, closing costs, and mortgage assistance.
Texas Mortgage Credit Certificate (MCC)
Tax CreditGet a federal tax credit for a portion of your mortgage interest each year, putting more money back in your pocket.
Texas State Affordable Housing Corporation (TSAHC)
Down Payment AssistanceProvides down payment and closing cost assistance for eligible first-time homebuyers in Texas.
My First Texas Home Program
Combined BenefitsCombines down payment assistance with competitive interest rates for Texas first-time buyers.
Real Scenarios: Which Loan Works Best?
Sarah: Limited Savings, Building Credit
Profile: Credit score 600, $10,000 saved for down payment and closing costs, looking at $280,000 homes in Fort Worth
Recommended: FHA Loan
With 3.5% down ($9,800), Sarah qualifies despite her credit score and has enough left for closing costs.
Why This Works:
- FHA accepts 580+ credit scores
- Lower down payment requirement fits her savings
- More lenient debt-to-income ratios
- Can refinance to conventional later when credit improves
Marcus: Strong Credit, Solid Income
Profile: Credit score 740, $25,000 saved, looking at $350,000 homes in Plano, stable tech job
Recommended: Conventional Loan
With 5% down ($17,500), Marcus gets better rates and can remove PMI once he hits 20% equity.
Why This Works:
- Excellent credit qualifies for best rates
- PMI is removable at 20% equity (saves money long-term)
- Higher loan limits support his budget
- Can pursue aggressive equity building strategy
James: Active Duty Military
Profile: Navy veteran, credit score 680, $15,000 saved, looking at $320,000 homes near Fort Worth
Recommended: VA Loan
No down payment required, no PMI, and his $15,000 covers closing costs with money to spare.
Why This Works:
- Zero down payment preserves savings for emergencies
- No monthly PMI saves $200+ per month
- Competitive rates for military members
- Can use remaining savings for furniture/moving