Buyer guide
Mortgage Basics: Loan Types and What They Cost
7 min read
Conventional, FHA, VA, jumbo — when each fits and what the real monthly cost is.
Reviewed by Saiid Zamani, Licensed PA Realtor® (#RS327426)Last updated:
Common loan types
- Conventional — 3–20% down, requires private mortgage insurance (PMI) if down payment is under 20%. Most common for buyers with strong credit.
- FHA — 3.5% down, more flexible on credit, requires mortgage insurance for the loan's life unless refinanced.
- VA — 0% down for eligible veterans, no PMI, often the lowest total cost.
- Jumbo — for loans above the conforming limit (changes annually; check the current FHFA limit for your county). Typically requires 10–20% down and strong credit.
What "monthly payment" actually includes
- Principal + interest — what most calculators show.
- Property tax — escrowed monthly; in many PA suburbs this is the largest non-P&I line item.
- Homeowner's insurance — escrowed monthly.
- PMI — if down payment is under 20% on a conventional loan.
- HOA — only for condos or some planned communities.
Always price loans by total monthly payment, not interest rate alone.