Top 16 Types of Mortgage Loans You Should Know

In this article

1. Key Takeaways
2. How Mortgage Loans Work
3. Conventional Loans
4. Jumbo Loans
5. Government-Backed Loans
6. FHA Loans
7. VA Loans
8. USDA Loans
9. Fixed-Rate vs. Adjustable-Rate Mortgages
10. Fixed-Rate Mortgages
11. Adjustable-Rate Mortgages (ARMs)
12. Refinance Loan Options
13. Loan Options for Self-Employed Buyers and Investors
14. Bank Statement Loans
15. DSCR Loans
16. Choosing the Right Loan Type for You
17. Summary
18. Frequently Asked Questions

Last updated: Sept 2026. By Alvaro Moreira, NMLS #148581. Moreira Team | MortgageRight. MortgageRight NMLS #2239; Atlanta Branch NMLS #1285851.

Key Takeaways

• Conventional loans are the most widely used mortgage type, with as little as 3% down for well qualified buyers and no upfront mortgage insurance premium.
• Government backed loans open doors for buyers who do not fit the conventional mold: FHA for lower credit scores, VA for veterans and service members, and USDA for eligible rural and suburban buyers.
• Jumbo loans finance homes above the 2026 conforming loan limit of $832,750 in most counties, while fixed and adjustable rate options control how your payment behaves over time.
• Self-employed buyers and real estate investors have dedicated paths, including bank statement loans and DSCR loans, that do not rely on traditional tax return income.
• Refinancing is its own category of loan, whether you want a lower rate, cash from your equity, or a faster payoff timeline.
• The right loan depends on your credit, your down payment, your income documentation, and your long term plans for the home, not just the lowest advertised rate.

Walk into a lender’s office and ask about a mortgage, and you will hear a lot of acronyms fast: FHA, VA, USDA, DSCR, ARM. It can feel like a foreign language, and that is exactly why so many buyers end up choosing the wrong product, or missing out on one that would have saved them thousands. This guide breaks down every major type of home mortgage loan available in 2026, in plain English, so you can walk into your next conversation with a loan officer already knowing which questions to ask.

How Mortgage Loans Work

A mortgage is a loan secured by the home itself. A lender advances the purchase funds, and you repay the balance over time through a monthly payment that typically covers principal, interest, taxes, and insurance, often shortened to PITI. If you stop making payments, the lender has the right to foreclose and recover its investment through the property, which is why underwriting looks closely at your credit, income, assets, and the property itself before approving a loan.

Every mortgage loan sorts into a few big buckets: who backs it (a government agency or a private investor), how the interest rate behaves (fixed or adjustable), and what it is used for (a purchase or a refinance). Understanding those buckets makes the rest of this guide, and your conversation with your loan officer, much easier to follow. If you are just getting oriented, our comprehensive guide for first time home buyers is a good companion piece to this one, and the mortgage loan process page walks through what happens after you pick a loan type.

Conventional Loans

Conventional loans are not backed by a government agency. They are either conforming, meaning they meet the standards set by Fannie Mae and Freddie Mac and fall at or below the county loan limit, or non-conforming, meaning they exceed that limit or otherwise fall outside agency guidelines. Conforming loans are the workhorse of the mortgage market because they offer competitive rates, broad lender availability, and flexible terms for a wide range of borrowers.

Most lenders look for a credit score of at least 620 to qualify for a conventional loan, though better pricing generally starts around 680 to 740. Down payment options range from 3% for qualified first time buyers up to 20% or more. Putting down less than 20% means you will pay private mortgage insurance (PMI) until you reach 20% equity, but PMI on a conventional loan can be cancelled once you hit that threshold, unlike the mortgage insurance on some government loans. For buyers weighing their down payment options generally, our lowdown on down payments post goes deeper on how much to put down and why.

Jumbo Loans

Jumbo loans pick up where conventional financing leaves off. For 2026, the baseline conforming loan limit set by the Federal Housing Finance Agency is $832,750 for a one-unit home in most of the country, with a ceiling of $1,249,125 in higher cost areas. Any loan amount above the limit for your specific county is considered jumbo. Because jumbo loans are not backed by Fannie Mae or Freddie Mac, lenders take on more risk and typically require a higher credit score, a larger down payment (often 10% to 20%), and proof of cash reserves covering several months of payments. Jumbo loans are common for luxury purchases and for buyers in higher cost pockets of metro Atlanta, but the underwriting can be more involved, so it pays to talk with a loan officer early in the process.

Government-Backed Loans

Government-backed loans are insured or guaranteed by a federal agency, which lets lenders offer more flexible terms than they could on a conventional loan. They are often the best fit for buyers with limited savings, a shorter credit history, or military service.

FHA Loans

FHA loans are insured by the Federal Housing Administration and remain one of the most popular options for first time buyers. As of 2026, the minimum down payment is 3.5% for borrowers with a credit score of 580 or higher, and 10% for scores between 500 and 579. FHA loan limits for a one-unit home range from a national floor of $541,287 up to a ceiling of $1,249,125 depending on local home prices, so check HUD’s county lookup for your exact area. FHA loans allow a debt-to-income ratio around 43% as a standard guideline, with room to go higher for well qualified borrowers. The tradeoff is mortgage insurance: FHA loans require both an upfront premium and an annual premium built into your monthly payment, and on most FHA loans today that annual premium runs for the life of the loan unless you refinance out of it. For a full breakdown of qualifying, see our post on understanding FHA loan qualifications, and for the down payment specifics, read FHA mortgage down payment requirements. Our FHA mortgage insurance post covers how those premiums are calculated and when they can be removed.

VA Loans

VA loans are guaranteed by the Department of Veterans Affairs and are available to eligible veterans, active duty service members, and certain surviving spouses. Since 2020, there is no VA loan limit for borrowers with full entitlement, meaning qualified buyers can finance up to 100% of the purchase price with no down payment at all, regardless of the loan amount, as long as the lender approves the loan and the home appraises appropriately. VA loans never require monthly mortgage insurance, which is one of their biggest advantages over FHA and low down payment conventional loans. Most borrowers pay a one-time VA funding fee, which varies based on your down payment and whether you have used your VA benefit before, though veterans with a service-connected disability rating are typically exempt from the fee. Ask your loan officer to confirm the exact fee percentage for your scenario. Veterans who already have a VA loan and want a lower rate should look at our VA streamline refinance (IRRRL) post, which explains how to refinance with no appraisal or income check.

USDA Loans

USDA loans are backed by the U.S. Department of Agriculture and designed for buyers purchasing in eligible rural and many surrounding suburban areas, which cover a surprising amount of ground outside metro Atlanta and other Georgia cities. Like VA loans, USDA loans allow 0% down. Eligibility depends on the property’s location and your household income, which generally cannot exceed 115% of the area median income for your county and household size. USDA loans carry a guarantee fee instead of traditional mortgage insurance, and it tends to run lower than FHA’s premiums. If you are considering this route, our dedicated guide on qualifying for a USDA loan in Georgia walks through eligible areas and income limits in detail.

Fixed-Rate vs. Adjustable-Rate Mortgages

Loan type determines who backs your loan and what you need to qualify. Rate structure determines how your payment behaves after closing, and it applies across conventional, FHA, VA, and USDA loans alike.

Fixed-Rate Mortgages

A fixed-rate mortgage locks your interest rate for the entire loan term, typically 15 or 30 years. Your principal and interest payment never changes, which makes budgeting simple and protects you from future rate increases. Fixed-rate loans are the right fit for buyers who plan to stay in the home for many years and who value predictability over the lowest possible introductory rate.

Adjustable-Rate Mortgages (ARMs)

An adjustable-rate mortgage starts with a fixed rate for an introductory period, often 5, 7, or 10 years, then adjusts periodically based on a financial index. ARMs typically start with a lower rate than a comparable fixed-rate loan, which can help buyers qualify for a larger loan amount or free up cash flow early on. The tradeoff is uncertainty: once the introductory period ends, your rate, and your payment, can rise. ARMs tend to make the most sense for buyers who plan to sell or refinance before the fixed period expires, or who expect their income to grow.

Whichever structure you choose, it helps to see current pricing side by side. Check our current rates page or get a custom mortgage rate quote built around your specific scenario.

Refinance Loan Options

Refinancing replaces your existing mortgage with a new one, and it is its own category of loan with its own set of goals.

• Rate-and-term refinance: Replaces your current loan with a new one to secure a lower rate, shorten your term, or both, without taking cash out. Our conventional refinance page covers eligibility for conforming loans.
• Cash-out refinance: Lets you borrow more than your current balance and pocket the difference, often used for renovations, debt consolidation, or other large expenses. See FNMA cash-out refinance requirements and benefits for the specifics on conventional cash-out loans.
• VA Interest Rate Reduction Refinance Loan (IRRRL): A streamlined refinance available to veterans with an existing VA loan, often with no appraisal or income verification required. Read more in our VA streamline refinance guide.

Homeowners who want ongoing access to equity rather than a lump sum refinance should also look at a home equity line of credit (HELOC), which works as a revolving credit line secured by your home rather than a one-time payout. Compare your options generally on our refinance page.

Loan Options for Self-Employed Buyers and Investors

Not every qualified borrower fits neatly into a traditional W-2 income box, and lenders have built products specifically for them.

Bank Statement Loans

Rather than relying on tax returns, bank statement loans qualify self-employed borrowers using 12 to 24 months of personal or business bank statements to document income. These loans are part of the broader Non-QM (non-qualified mortgage) category, meaning they fall outside standard conforming and government guidelines, so requirements vary more by lender. They can be a strong option for business owners whose tax returns show significant write-offs that understate their real cash flow.

DSCR Loans

DSCR loans (debt service coverage ratio loans) are built for real estate investors. Instead of qualifying based on your personal income, the lender evaluates whether the property’s rental income covers its own debt obligations. This makes DSCR loans a popular tool for investors scaling a rental portfolio, since your personal debt-to-income ratio and tax returns are not the primary factor in approval. If your DTI is a hurdle on a personal purchase instead, our post on getting a loan with a high DTI ratio covers strategies that can help.

Choosing the Right Loan Type for You

Here is a quick side-by-side look at how the most common loan types compare. Treat these as general starting points, since actual terms vary by lender and by your specific credit profile.

If you are buying for the first time, start with our first-time homebuyer resources and check whether you qualify for our approval guarantee. Whatever loan type you are leaning toward, running the numbers on our mortgage calculator is a useful next step before you talk terms with a lender.

Summary

There is no single best mortgage loan, only the best mortgage loan for your situation. Conventional loans reward strong credit and steady income. FHA, VA, and USDA loans open the door for buyers who need more flexibility on credit or down payment. Jumbo loans finance homes above conforming limits, while bank statement and DSCR loans serve self-employed borrowers and investors who do not fit a traditional income profile. The right move is to talk through your specific numbers with a loan officer who can walk you through real options rather than general rules of thumb.

Frequently Asked Questions