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We understand that the home buying process can feel really overwhelming at times. Between figuring out which step comes next, translating the mortgage jargon and learning which options are best for your situation, you may feel lost. That’s why we, as mortgage lenders, are here - to help you navigate through the home buying process. But you may want to do some research on your own before you meet with a mortgage lender, which is why we’ve made a list to help you figure out which type of mortgage loan is right for you. Remember, to get a more accurate assessment of which loan is best for your needs, it’s important to speak with a mortgage lender where more details on your financial portfolio are taken into account ensuring the best loan recommendations are made for you.

Conventional Loan

The conventional loan offers as low as 3% down payment depending on income and previous home ownership, otherwise, there is a minimum 5% down payment required. Unless a borrower puts down 20%, this type of loan has monthly PMI (Private Mortgage Insurance – insurance that protects the lender from losing money if the borrower stops making payments). However, there are some options available to save on the monthly PMI payment without putting 20% down. To learn more about those options, you should talk with one of our knowledgeable mortgage lenders.

Best for: Those who have saved a minimum of at least 3% for a down payment, have good credit and have a reliable source of income and a strong employment history.


FHA loans are backed by the FHA (Federal Housing Authority). If you are in a situation where you have a credit score that is 680 or below and don’t have a large sum saved for a down payment, the FHA loan may be the right option for you. It requires only 3.5% down payment and will most likely provide a lower PMI monthly structure for a better payment than Conventional Loans. However, this loan does have two premiums and though the upfront payment is often less than a Conventional loan, it can mean you pay more over the duration of the loan.

Best for: Those who haven’t saved a large sum for a down payment, have a credit score of 680 or below and can’t qualify for a Conventional Loan.


VA Loans

For those who qualify – members of the military and their family - this is a flexible and low-interest loan option. It is considered 100% financing and has no monthly PMI payment plus, here at Marine Bank, we offer all qualifying VA borrowers $500 off closing cost as a thank you for their services to our country. This type of program can provide the best of both worlds - the least amount of down payment and, in many cases, the lowest monthly payment option.

Best for: Qualifying borrowers such as military personnel and their families, those who haven’t saved a large sum for a down payment and are looking for a flexible and low-interest option as well as lower credit requirements.

RD Loan (Rural Development)

For borrowers that qualify (must meet specific income limits and purchase in a USDA-eligible area) this is a loan that is considered 100% financing for borrowers who may not have a lot of money available for down payment. This loan has monthly PMI but at a lower amount than a Conventional or FHA loan, and can provide a very competitive payment.

Best for: Those who haven’t saved a large sum for a down payment, don’t have a strong credit score and can’t qualify for a Conventional Loan.

Grant Programs

Lastly, there are grant programs available to qualified borrowers. The Illinois Housing Development Associations (IHDA) grant program can provide up to $10,000 while the Federal Home Loan Bank of Chicago’s Down Payment Plus grant, offers up to $6,000 toward down payment and closing fees. If your savings for a down payment is minimal, this might a good option for you in obtaining home ownership. Grant programs often require smaller amounts of your own money down on each program which is generally either $1,000 or 1%, whichever is greater, of your own money for up to a $10,000 grant. The Down Payment Plus grant offers up to $6,000 in tiers based on money invested. If a borrower puts $1,000 of their own money into it, they can get a $3,000 grant. If they put $1,500 into it, they can get $4,500 or if they put $2,000 of their own money into it, they can get the maximum amount of $6,000. To learn more about the grant options, you should talk with one of our experienced mortgage lenders.

Best for: Those who haven’t saved a large sum for a down payment, first-time home buyers and renters.

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If you have questions about buying a home,
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