You found a house you love in Forest Grove. Then your lender starts talking about loan types, and it sounds like a different language.
You're not the only one who feels that way. Most buyers I work with aren't sure which loan fits them, and that's a fair place to be. The good news is that you only have three common choices to compare.
I'm not a lender, and the final word on what you qualify for comes from them. But I can walk you through how each loan works so you know what questions to ask.
Why the Loan Type Matters
The loan you pick changes three things: how much cash you need up front, what you pay each month, and how much you pay over time. Two buyers can look at the same house and end up with very different payments.
It's worth sorting this out before you start touring homes. It helps you set a budget you can count on.
Conventional Loans
A conventional loan isn't backed by the government. Banks and lenders follow standard guidelines set by Fannie Mae and Freddie Mac.
Good to know:
Some conventional loans allow as little as 3% down. Putting down 20% avoids private mortgage insurance (PMI), and lowers your monthly payments.
If you put down less than 20%, you'll pay PMI. It can come off once you've built enough equity.
Credit requirements are usually stricter than FHA. Many lenders look for a score of at least 620, and a higher score often gets you a better rate.
You can use it for a primary home, second home, or investment property.
Often a good fit if: you have solid credit and some savings for a down payment.
FHA Loans
FHA loans are insured by the Federal Housing Administration. They're built to help buyers who don't have a large down payment or a perfect credit history.
Good to know:
You can put down as little as 3.5% with a credit score of 580 or higher. With a score between 500 and 579, you'll generally need 10% down.
You pay mortgage insurance in two ways: a one-time upfront premium rolled into the loan, and a monthly premium.
If you put down less than 10%, the monthly premium typically lasts for the life of the loan. Many people refinance later to remove it.
The home must meet FHA safety and condition standards, which can matter if you're looking at an older house.
Often a good fit if: your credit is still being built, or your savings are limited.
VA Loans
VA loans are for eligible veterans, active-duty service members, certain National Guard and Reserve members, and some surviving spouses. They're backed by the Department of Veterans Affairs.
Good to know:
Many VA buyers can purchase with no down payment.
There's no monthly mortgage insurance.
Most borrowers pay a one-time VA funding fee. The amount depends on your down payment and whether you've used the benefit before. Some veterans, including those with a service-connected disability, are exempt.
You'll need a Certificate of Eligibility. Your lender can usually help you get one.
The home must be your primary residence and meet VA property standards.
Often a good fit if: you've served and qualify. For many eligible buyers, it's the lowest-cost option.
A Quick Look at the Numbers
Say you're buying a $400,000 home. This is only an example, not a quote:
Conventional at 3% down: $12,000
Conventional at 5% down: $20,000
FHA at 3.5% down: $14,000
VA at 0% down: $0 (plus the funding fee, unless exempt)
The down payment is only part of the picture. Interest rate, mortgage insurance, and your credit score all change the monthly payment, so ask your lender for a side-by-side comparison on the same home price.
How to Choose
Ask yourself a few honest questions:
Do you qualify for a VA loan? If yes, get a quote. It's often worth a close look.
How much cash do you have for a down payment and closing costs?
What's your credit score? A higher score opens up better options.
How long do you plan to stay? That affects whether mortgage insurance or a funding fee costs you more.
What condition is the home in? FHA and VA both require the house to meet certain standards.
If you're stuck between two, that's normal. Sometimes the answer isn't obvious until you see the numbers side by side.
Loans and Buying in Forest Grove
Home prices and loan limits vary by county and change over time. Washington County has its own limits, so ask your lender what applies to the price range you're considering.
It also helps to talk with a lender before you start looking. A pre-approval tells you what you can afford and shows sellers you're serious.
Your Next Steps
Check your credit report for errors. You can get free reports at annualcreditreport.com.
Add up your savings for the down payment, closing costs, and a cushion for moving and repairs.
If you've served, get your Certificate of Eligibility or ask a lender to pull it for you.
Talk to two or three lenders and ask each for a written estimate on the same home price.
Get pre-approved before you start touring. This is an important step and should be done before you start looking.
Let's Talk About Your Situation
I've been helping people buy homes for more than 20 years, and I'm an Accredited Buyer's Representative. I've lived in Forest Grove for nine years, so I know the area well.
If you're not sure where to begin, call or email me. I can point you toward lenders I trust and help you figure out what to ask them. No pressure, just honest answers.
Cilicia Philemon
Accredited Buyer's Representative (ABR)
Premier Property Group
📞 (541) 592-4682
✉️ misscilicia@outlook.com