
FROM OUR BLOG
FROM OUR BLOG
FROM OUR BLOG
Understanding Mortgage Options: Finding the Right Fit for Your Life
Apr 18, 2025



When it comes to getting a home loan, many buyers feel like they’re being handed a menu in a foreign language. Fixed rate? Adjustable? FHA? VA? Conventional? Non-QM?
At Horizon Funding, our goal is to help you understand your options clearly—so you can make a confident, informed decision about what works best for you and your financial future.
This guide will walk you through the major types of mortgages and help you understand the differences, benefits, and when each one makes the most sense.
🏠 Conventional Loans
What they are:
These are the most common loans and are not insured by the government. They're often best for borrowers with strong credit, solid income, and a decent down payment.
Who it’s for:
Buyers with 620+ credit scores (better rates with 680+)
Stable W-2 or self-employed income
Down payment of 3–20% (or more)
Pros:
Competitive interest rates
Can avoid mortgage insurance with 20% down
Widely accepted for most property types
Things to consider:
If your credit is lower or your income is inconsistent, a government-backed loan may be a better fit.
🛡️ FHA Loans
What they are:
Loans backed by the Federal Housing Administration, designed to help more people qualify—especially first-time buyers or those rebuilding credit.
Who it’s for:
Buyers with credit scores as low as 580
Smaller down payments (as low as 3.5%)
Those who may have higher debt-to-income ratios
Pros:
Easier credit requirements
Lower down payment
Flexible on income and job gaps
Things to consider:
FHA loans come with upfront and monthly mortgage insurance premiums, regardless of down payment size.
🎖️ VA Loans
What they are:
Loans backed by the Department of Veterans Affairs. Available to eligible active-duty service members, veterans, and certain surviving spouses.
Who it’s for:
Eligible military and veteran buyers
Buyers looking for 100% financing (no down payment)
Pros:
No down payment required
No mortgage insurance
Lower interest rates and flexible guidelines
Things to consider:
You’ll need a Certificate of Eligibility (COE). Horizon can help you obtain it. Some property types or loan sizes may be limited.
💰 Jumbo Loans
What they are:
Loans that exceed the conforming loan limits (which vary by county). These are designed for higher-priced homes.
Who it’s for:
Buyers purchasing luxury or high-value properties
Strong income and assets
High credit scores (often 700+)
Pros:
Allows financing of large homes without multiple loans
Competitive rates with strong borrower profile
Things to consider:
Jumbo loans have stricter requirements and larger reserves may be needed. Ideal for buyers with financial strength.
🔄 Adjustable-Rate Mortgages (ARMs)
What they are:
Loans where the interest rate starts lower and adjusts after a set period (typically 5, 7, or 10 years).
Who it’s for:
Buyers planning to sell or refinance before the adjustment period
Investors or short-term property owners
Pros:
Lower starting rates = lower monthly payments
Great for short-term savings
Things to consider:
Rates can rise after the initial period, which means higher payments. ARMs aren’t for everyone—but can be powerful in the right scenario.
🌐 Non-QM Loans (Alternative or Non-Traditional Mortgages)
What they are:
Loans that fall outside traditional guidelines. These are ideal for self-employed borrowers, investors, or anyone with unique financials.
Who it’s for:
Business owners or freelancers with inconsistent income
Buyers using bank statements, assets, or 1099s to qualify
Real estate investors
Pros:
Flexible documentation requirements
Designed for real-world income that doesn’t show on a W-2
Can still offer competitive terms
Things to consider:
Rates may be slightly higher than conventional loans, but they open the door to buyers traditional lenders often turn away.
🧮 Fixed-Rate vs. Adjustable-Rate Loans
Regardless of loan type, you’ll often have a choice between:
🔒 Fixed-Rate Mortgage
Interest rate stays the same for the life of the loan (15, 20, or 30 years)
Predictable monthly payments
Best for long-term buyers who want stability
🔄 Adjustable-Rate Mortgage (ARM)
Lower starting rate for the first 5–10 years
After that, rate adjusts annually
Best for buyers who plan to move or refinance
💡 How Horizon Helps You Choose
At Horizon Funding, we never push a certain loan type—we tailor everything to you.
Here’s how we make it simple:
We listen first. Your goals, your situation.
We explain options side-by-side in plain English.
We strategize together—whether your goal is the lowest payment, fastest payoff, or maximum flexibility.
We support you all the way through pre-approval to closing day.
Final Thoughts
Choosing the right mortgage isn’t about guessing. It’s about planning—based on real numbers, real goals, and real conversations.
Whether you’re buying your first home or your tenth, Horizon Funding is here to walk you through the options and match you with the loan that fits your life—not just your credit score.
Ready to compare your options? Let’s start with a simple conversation.
When it comes to getting a home loan, many buyers feel like they’re being handed a menu in a foreign language. Fixed rate? Adjustable? FHA? VA? Conventional? Non-QM?
At Horizon Funding, our goal is to help you understand your options clearly—so you can make a confident, informed decision about what works best for you and your financial future.
This guide will walk you through the major types of mortgages and help you understand the differences, benefits, and when each one makes the most sense.
🏠 Conventional Loans
What they are:
These are the most common loans and are not insured by the government. They're often best for borrowers with strong credit, solid income, and a decent down payment.
Who it’s for:
Buyers with 620+ credit scores (better rates with 680+)
Stable W-2 or self-employed income
Down payment of 3–20% (or more)
Pros:
Competitive interest rates
Can avoid mortgage insurance with 20% down
Widely accepted for most property types
Things to consider:
If your credit is lower or your income is inconsistent, a government-backed loan may be a better fit.
🛡️ FHA Loans
What they are:
Loans backed by the Federal Housing Administration, designed to help more people qualify—especially first-time buyers or those rebuilding credit.
Who it’s for:
Buyers with credit scores as low as 580
Smaller down payments (as low as 3.5%)
Those who may have higher debt-to-income ratios
Pros:
Easier credit requirements
Lower down payment
Flexible on income and job gaps
Things to consider:
FHA loans come with upfront and monthly mortgage insurance premiums, regardless of down payment size.
🎖️ VA Loans
What they are:
Loans backed by the Department of Veterans Affairs. Available to eligible active-duty service members, veterans, and certain surviving spouses.
Who it’s for:
Eligible military and veteran buyers
Buyers looking for 100% financing (no down payment)
Pros:
No down payment required
No mortgage insurance
Lower interest rates and flexible guidelines
Things to consider:
You’ll need a Certificate of Eligibility (COE). Horizon can help you obtain it. Some property types or loan sizes may be limited.
💰 Jumbo Loans
What they are:
Loans that exceed the conforming loan limits (which vary by county). These are designed for higher-priced homes.
Who it’s for:
Buyers purchasing luxury or high-value properties
Strong income and assets
High credit scores (often 700+)
Pros:
Allows financing of large homes without multiple loans
Competitive rates with strong borrower profile
Things to consider:
Jumbo loans have stricter requirements and larger reserves may be needed. Ideal for buyers with financial strength.
🔄 Adjustable-Rate Mortgages (ARMs)
What they are:
Loans where the interest rate starts lower and adjusts after a set period (typically 5, 7, or 10 years).
Who it’s for:
Buyers planning to sell or refinance before the adjustment period
Investors or short-term property owners
Pros:
Lower starting rates = lower monthly payments
Great for short-term savings
Things to consider:
Rates can rise after the initial period, which means higher payments. ARMs aren’t for everyone—but can be powerful in the right scenario.
🌐 Non-QM Loans (Alternative or Non-Traditional Mortgages)
What they are:
Loans that fall outside traditional guidelines. These are ideal for self-employed borrowers, investors, or anyone with unique financials.
Who it’s for:
Business owners or freelancers with inconsistent income
Buyers using bank statements, assets, or 1099s to qualify
Real estate investors
Pros:
Flexible documentation requirements
Designed for real-world income that doesn’t show on a W-2
Can still offer competitive terms
Things to consider:
Rates may be slightly higher than conventional loans, but they open the door to buyers traditional lenders often turn away.
🧮 Fixed-Rate vs. Adjustable-Rate Loans
Regardless of loan type, you’ll often have a choice between:
🔒 Fixed-Rate Mortgage
Interest rate stays the same for the life of the loan (15, 20, or 30 years)
Predictable monthly payments
Best for long-term buyers who want stability
🔄 Adjustable-Rate Mortgage (ARM)
Lower starting rate for the first 5–10 years
After that, rate adjusts annually
Best for buyers who plan to move or refinance
💡 How Horizon Helps You Choose
At Horizon Funding, we never push a certain loan type—we tailor everything to you.
Here’s how we make it simple:
We listen first. Your goals, your situation.
We explain options side-by-side in plain English.
We strategize together—whether your goal is the lowest payment, fastest payoff, or maximum flexibility.
We support you all the way through pre-approval to closing day.
Final Thoughts
Choosing the right mortgage isn’t about guessing. It’s about planning—based on real numbers, real goals, and real conversations.
Whether you’re buying your first home or your tenth, Horizon Funding is here to walk you through the options and match you with the loan that fits your life—not just your credit score.
Ready to compare your options? Let’s start with a simple conversation.
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Unlock your financial potential with Financia. We provide personalized tools and insights to elevate your financial journey.
Subscribe to our newsletter
Unlock your financial potential with Financia. We provide personalized tools and insights to elevate your financial journey.
Subscribe to our newsletter
Unlock your financial potential with Financia. We provide personalized tools and insights to elevate your financial journey.