Conventional 20% Down Mortgage

Often the best choice for a mortgage as it offers the most options (30 year fixed, 15 year fixed, ARMS etc), the lowest fees, and the lowest rates. It does require proof of earnings and a substantial sum of money to put down.

FHA Loan

This loan has similar rates and fees to a 20% down loan, but higher mortgage insurance, notably a 1.75% up front Mortgage Insurance Premium (UFMIP). FHA Loans have a 3.5% required down payment, and require monthly mortgage insurance payments that can never be removed (unlike a Conventional Loan). The interest rates are generally higher, but slightly lower than a physician’s loan. However, when the monthly MIP is added to the rate, it is often higher than a physician’s loan.

VA Loan

This loan requires that you qualify for VA benefits, which disqualifies many. It is an improvement on the FHA loan in that the 3.5% down payment is not required and there is no mortgage insurance requirement. Rates are similar to FHA rates, but the 2.15% funding fee is higher (as compared to the UFMIP).

Conventional Mortgage with Less than 20% Down

These loans have higher rates and fees than a 20% down mortgage. They also require you to purchase PMI. It is rare for you to find one that is 0% down, but 5% and 10% down are common.

80/20 & 80/15/5 Loans

The theory is that you would get an 80% loan at a slightly higher rate than on a 20% down loan, then get a 20% loan at a much higher rate. You would avoid Private Mortgage Insurance (PMI), which isn’t tax-deductible, replacing it instead with more interest. The 80/10/10 and 80/15/5 are variations on the theme, with a down payment required.