📋Chapter 5

Understanding Mortgages

Learn about different loan types and find the best fit for your situation.

Just as every home is unique, every mortgage has its own character. Understanding different mortgage options is like learning about different neighborhoods – each has its own benefits and considerations.

My Mortgage Needs

Down payment available

Monthly payment comfort level

How long do you plan to stay in this home?

My employment type

Conventional Loans

Key Features:

• Typically requires 3-20% down payment
• PMI required if down payment is less than 20%
• Generally needs credit score of 620+
• Various term options (15, 20, 30 years)

What appeals to me about conventional loans:

My potential challenges with conventional loans:

FHA Loans

Key Features:

• As low as 3.5% down payment
• More flexible credit requirements (580+)
• Government-backed insurance
• Mortgage Insurance Premium (MIP) required for life of loan

What appeals to me about FHA loans:

My potential challenges with FHA loans:

Special Programs (VA, USDA)

VA Loans:

• For veterans and active military
• 0% down payment possible
• No PMI required

USDA Loans:

• For rural and suburban areas
• 0% down payment possible
• Income limits apply

Special programs I might qualify for:

Questions to ask lenders about these programs:

My Initial Loan Preference

Based on my research, I'm most interested in:

Why this option seems best for me:

Understanding Mortgages

Key Features:

Key Features:

VA Loans:

USDA Loans:

My Initial Loan Preference

Knowledge Check

What's the main advantage of an FHA loan over a conventional loan?

When can you stop paying PMI on a conventional loan?