One of the most common questions I hear from homebuyers in Austin and across Texas is, “What type of mortgage should I get?”
And honestly… it’s a fair question. With all the loan options out there — conventional, FHA, VA, USDA, jumbo, and the more flexible Non-QM and self-employed programs — it can feel like alphabet soup.
But here’s the good news: the best mortgage for you depends on your financial goals, income, and homebuying strategy. As a Certified Mortgage Advisor and local Austin mortgage expert, I help buyers compare all their options so they can make a smart, confident decision.
Let’s break down the most common types of mortgages and who they’re best for.
Conventional Loans: Great for Strong Credit & Solid Down Payments
Conventional loans are the most popular option for Texas homebuyers, especially those with good credit and stable income. They’re flexible, widely accepted, and offer strong long-term benefits.
A conventional loan may be right for you if:
- You have a 620+ credit score (740+ gets the best pricing)
- You want a low monthly payment
- You plan to stay in the home for a while
- You want the ability to remove PMI once you reach 20% equity
- You’re buying a primary home, second home, or investment property
Conventional loans are a fantastic fit for buyers in the Austin, Cedar Park, and Round Rock areas who want competitive rates and more control over their long-term costs.
If you want to learn more about how conventional financing works, visit my Conventional Loans in Texas guide for details on credit scores, down payments, and PMI removal.
FHA Loans: Ideal for First-Time Buyers or Lower Credit
FHA loans are government-backed and known for being more forgiving with credit requirements — which is why many first-time homebuyers love them.
An FHA loan may be a great choice if:
- Your credit score is 580–640
- You want a low down payment (as little as 3.5%)
- You need flexible approval guidelines
- You want predictable monthly payments
FHA loans are especially helpful for buyers rebuilding credit or entering the market for the first time in high-price areas like Austin or Leander.
For a deeper breakdown, here’s my full FHA Loan resource page explaining requirements, benefits, and who qualifies best in the Austin market.
VA Loans: The Best Option for Eligible Veterans & Active-Duty Buyers
If you’re a veteran, active-duty service member, or surviving spouse, a VA loan is hands-down one of the best mortgage programs available.
VA loans offer:
- 0% down payment
- No PMI
- Competitive interest rates
- Flexible credit requirements
Texas has one of the strongest veteran populations in the country, and VA loans are extremely powerful tools for building long-term homeownership and wealth.
If you're a veteran or active-duty service member, my VA Loans page walks through eligibility, 0% down options, and the unique advantages for Texas buyers.
USDA Loans: Zero Down Payment for Eligible Rural Areas
USDA loans are an incredible option for buyers looking just outside Austin in areas like Liberty Hill, Taylor, Bastrop, Jarrell, or Burnet. They’re designed to support growth in rural areas while offering affordable financing.
A USDA loan may be right if:
- You want 0% down payment
- You’re comfortable buying in a USDA-eligible zone
- Your income falls within the program limits
- You want competitive, government-backed rates
This is one of the most underrated — and most financially advantageous — programs available in Texas.
Curious about zero-down options outside the city? Check out my USDA Loan guide for eligible areas around Austin and qualification rules.
Jumbo Loans: For Higher-Priced Homes in Texas
With rising home prices (especially around Austin, Lake Travis, and Dripping Springs), more buyers are turning to jumbo loans. Jumbo loans cover mortgage amounts above the conforming loan limit.
A jumbo loan might be right for you if:
- You’re borrowing above the conforming limit
- You have strong income, high credit, and solid reserves
- You want competitive pricing on luxury or high-value homes
Jumbo financing is common across Austin’s hot neighborhoods — from Steiner Ranch to Westlake to Bee Cave.
For buyers looking at higher-priced homes, my Jumbo Loan overview explains loan limits, requirements, and Austin areas where jumbo is common.
Bank Statement Loans: Perfect for Self-Employed Texans
Self-employed? 1099 earner? Run your own business? A bank statement loan may be your perfect fit — especially if your tax returns don’t reflect your true income.
A bank statement loan may be ideal if:
- You want to qualify using 12–24 months of bank deposits
- You have strong income but lots of write-offs
- You’re self-employed and want a more realistic approval path
- You’re buying a primary home, second home, or investment property
Austin is full of entrepreneurs, creatives, and freelancers — this program is tailor-made for them.
Self-employed or 1099 income? My Bank Statement Loan page shows how you can qualify using deposits instead of tax returns.
Non-QM Loans: Flexible Loans for Unique Situations
Non-QM (Non-Qualified Mortgage) loans are built for homebuyers who fall outside traditional lending rules. They make homeownership possible for a wide range of Texas buyers.
A Non-QM loan may be right for you if:
- You want interest-only options
- You need alternative income documentation
- You’re newly self-employed
- You’ve had a recent credit event
- You need a loan a bank can’t quite fit in a box
These programs give Texans more flexibility and more opportunities — especially in Austin’s modern, entrepreneurial economy.
For buyers with unique income or non-traditional scenarios, my Non-QM Loan guide breaks down flexible loan options available in Texas.
So… What Is the Best Type of Mortgage for You?
There’s no one-size-fits-all answer — and that’s exactly why working with a local expert matters.
As Certified Mortgage Advisor, I look at your full financial picture, goals, and current market conditions. Then I help you compare mortgage options side-by-side so you can make a smart, confident choice.
The right loan will depend on:
- Your income (W-2, self-employed, or investment-based)
- Your credit profile
- Your down payment
- Your long-term homeownership goals
- The property type and location
- Whether you're buying a primary home, second home, or investment
When you understand your options clearly, choosing the right mortgage becomes surprisingly easy — and maybe even exciting.
Ready to Find the Best Mortgage Strategy for You?
If you're buying or refinancing in Austin or anywhere in Texas, I’m here to help you compare programs, run numbers, and create a personalized loan strategy that fits your goals.
Let’s talk about what’s best for you.