Find your mortgage fit with these questions
The homebuying process is defined by choice – which home will make you choose to make the biggest financial decision of your life? But that’s not the only choice you’ll be making on the path from homebuyer to homeowner. You’ll have to make many choices, and perhaps none are as important — or affect what type of home you’ll be able to purchase — than the decision of which mortgage is right for you.
Choosing the right loan program can be daunting. The good news is that you can start on your search without knowing exactly which of our options you’ll ultimately be using. But by getting pre-approved at the beginning of the process, you’ll have a better idea of what you can afford, and you’ll impress your seller with the certainty of your offer.
Use this quick and interactive quiz to help you navigate the mortgage maze. You can match your financial situation, lifestyle and future goals with the perfect loan option to become the best homebuyer you can be.
Based on your answers, you’ll be matched with one of the following loan types:
- Conventional Loan: Ideal for those with strong credit and savings, offering competitive rates and a variety of term lengths.
- FHA Loan: A great option for first-time homebuyers or those with lower credit scores, requiring a smaller down payment.
- VA Loan: Designed for Veteran and active-duty military members, offering zero down payment and favorable terms.
- USDA Loan: Perfect for those purchasing in rural areas, with zero down payment and low interest rates.
- Jumbo Loan: The type of mortgage you’ll need if you want to buy a more expensive home. This mortgage is needed for loan amounts over the conforming loan limit of $766,550 and $1,149,825 in high-cost areas.
Answer these questions to help pinpoint your perfect mortgage.
What stage of life are you in right now?
- Just starting out: You might be a first-time homebuyer, focused on building your career and possibly starting a family. Stability is key, but flexibility is also important as your needs may change.
- Growing in my career: You’re advancing in your career, possibly with a growing family or planning for the future. You're looking for a balance between stability and growth.
- Established in my field: You’ve been in your career for a while, with a stable income and clear long-term goals. You value stability and are planning for the future, possibly thinking about retirement.
- Retired or nearing retirement: You’re in or approaching retirement, and your priorities might include downsizing, maintaining a fixed income or investing in a home that requires less upkeep.
Your life stage could guide you toward different loan options:
- First-time buyers: FHA loans are designed to make homeownership more accessible with lower down payment requirements and flexible credit criteria, ideal for those just starting their careers and possibly buying their first home.
- Established borrowers: Conventional loans are a solid choice for those with a stable income, good credit and savings. These loans offer competitive rates and flexible terms, fitting well with long-term financial stability.
- Retirees: Reverse mortgages are an option for homeowners aged 62 or older who wish to convert their home equity into cash. This option is great for retirees looking to supplement their income without selling their home or tapping into savings. This is in addition to other loan options, so if you qualify, you should talk to a counselor to figure out which is best for you.
How long do you plan to stay in your new home?
- Less than 5 years: If you’re not planning to stay long, you might want to minimize upfront costs and avoid committing to a long-term fixed-rate mortgage.
- 5-10 years: You want a balance between stability and flexibility with a mortgage that won’t keep you from moving within the next decade.
- 10+ years: Long-term plans call for stability and a fixed-rate mortgage might be your best bet to lock in a low interest rate for the life of the loan.
Choosing the right mortgage based on your timeline helps ensure that your loan is aligned with your future plans, whether that means flexibility for the short term or stability for the long term.
- Shorter stays (less than 5 years): An Adjustable Rate Mortgage (ARM) could be a great option. ARMs typically offer lower initial interest rates than fixed-rate mortgages, making them cost-effective if you plan to move or refinance before the rate adjusts and possible increases.
- Long-term living (10+ years): A fixed-rate mortgage is ideal for those planning to stay in their home for a decade or more. This option locks in a consistent interest rate and stable monthly payments, providing predictability and security over the long haul.
What’s your approach to the down payment?
- I’ve saved up a lot: You’re prepared to make a substantial down payment, which could open doors to better rates and lower monthly payments.
- I have some savings, but not a ton: You’re in a good position to put some money down, but you’re also interested in exploring options that don’t require a huge upfront investment.
- I’d prefer to put down as little as possible: You’re looking for a loan that allows for a minimal down payment so you can keep more of your savings for other expenses.
By aligning your loan choice with your savings, you can find a mortgage that fits your financial situation and helps you achieve your homeownership goals.
- Conventional Loans: These are often preferred by those with substantial savings for a down payment. A larger down payment can lead to lower interest rates, no private mortgage insurance (PMI) and more favorable loan terms overall.
- FHA Loans: Ideal for buyers who have less saved up, with options requiring as little as 3.5% down. FHA loans are designed to make homeownership accessible even with smaller savings.
- VA Loans: VA loans require no down payment, making them perfect for those who qualify with minimal savings. These loans also offer the benefit of no PMI and competitive rates, even with little or no upfront cash.
- Down Payment Assistance Programs: Down payment assistance (DPA) programs and grants help home buyers afford the cost of a down payment. A DPA may cover the entire down payment or simply a portion of it, and there are plenty of options to choose from.
What’s the location of your dream home?
- In a big city: You love the energy and convenience of urban life and you’re likely considering a condo or a home in a lively neighborhood.
- In the suburbs: You’re drawn to the balance of peace and proximity, looking for a family-friendly area with good schools and amenities.
- In a rural area: You prefer the quiet and space of the countryside, perhaps looking at properties with more land or in a less densely-populated area.
By considering the location of your future home, you can choose a loan that aligns with the specific financial dynamics and opportunities of that area, ensuring your mortgage supports your lifestyle and goals.
- USDA Loans: Specifically designed for rural and some suburban areas, USDA loans offer a no-down payment option and are tailored to make homeownership more accessible in less densely-populated regions. They come with low interest rates and flexible credit requirements.
- Conventional Loans: These are well-suited for urban and suburban purchases, where properties might be more expensive and buyers often have more savings for a down payment. Conventional loans offer competitive rates and a variety of terms, making them versatile for city and suburban buyers.
How would you rate your credit score?
- Excellent (750+): You’re in great shape and likely to qualify for the best rates and terms.
- Good (700-749): Your credit is strong, and you have access to favorable loan options.
- Needs improvement (<700): You might need a loan that accommodates a lower credit score while you work on building it up.
By matching your loan type to your credit score, you can find the most suitable mortgage that aligns with your financial situation and goals.
Making sense of your mortgage options
Hopefully, after answering these questions, you’ve found a mortgage that works for you. Now that you have a better idea of what loan suits your needs, why not take the next step? Talking to a Loan Officer will help you understand your options even better.
Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply.
Savings, if any, vary based on the consumer’s credit profile, interest rate availability, and other factors. Contact Rate for current rates. Restrictions apply.
Rate, Inc. has no affiliation with the US Department of Housing and Urban Development, the US Department of Veterans Affairs, the Nevada Department of Veterans Services, the US Department of Agriculture, or any other government agency.
