What’s the Best Mortgage for Me? Conventional vs FHA vs VA vs Jumbo (San Jose Guide)

What’s the Best Mortgage for Me? A San Jose Guide to Conventional, FHA, VA, and Jumbo Loans

One of the most common questions buyers ask is:

“What’s the best mortgage for me?”

The answer depends on your price point, down payment, income structure, credit profile, and long-term plans — especially in a high-cost market like San Jose.

There is no “one-size-fits-all” mortgage. Choosing the right loan can impact:

• your monthly payment

• how competitive your offer is

• how much cash you need upfront

• your long-term flexibility

This guide breaks down the four most common mortgage options in San Jose and explains when each one makes sense.

For a full overview of financing fundamentals, start here:
👉 https://re38.com/san-jose-home-loan-mortgage-guide

Loan Type #1 — Conventional Loans

What it is

A conventional loan is the most common mortgage option and is not backed by the government.

Who it’s best for

• Buyers with solid credit

• Buyers putting 5%–20% down

• First-time and move-up buyers

Key details

• Down payment: as low as 3%–5%

• PMI required if under 20% down

• PMI can be removed later

• Strong offer perception with sellers

San Jose insight

Conventional loans are extremely common in San Jose and are often preferred by sellers over FHA loans due to fewer appraisal concerns.

Loan Type #2 — FHA Loans

What it is

An FHA loan is backed by the Federal Housing Administration and designed to help buyers with lower credit scores or limited down payment.

Who it’s best for

• First-time buyers

• Buyers with lower credit scores

• Buyers with limited cash

Key details

• Down payment as low as 3.5%

• More flexible credit guidelines

• Mortgage insurance required for the life of the loan (in most cases)

San Jose reality check

In competitive San Jose markets, FHA loans can be less attractive to sellers due to stricter appraisal and condition requirements. FHA works best in:

• slower markets

• condos/townhomes

• homes in good condition

Loan Type #3 — VA Loans

What it is

A VA loan is a powerful benefit available to eligible veterans and active-duty service members.

Who it’s best for

• Veterans

• Active-duty military

• Eligible surviving spouses

Key details

• 0% down payment

• No PMI

• Competitive interest rates

• Flexible underwriting

San Jose advantage

VA loans can be extremely competitive in San Jose when paired with strong terms. Despite common myths, VA loans are often just as strong as conventional loans when structured properly.

Loan Type #4 — Jumbo Loans

What it is

A jumbo loan exceeds the conforming loan limit and is very common in San Jose due to high home prices.

Who it’s best for

• Buyers purchasing higher-priced homes

• Tech professionals with strong income

• Move-up buyers

Key details

• Typical down payment: 10%–20%

• Strong credit required

• Higher reserve requirements

• Competitive rates for strong borrowers

San Jose reality

Many San Jose buyers end up in jumbo territory even when purchasing average single-family homes. Choosing the right lender matters greatly here.

How Price Point Affects Loan Choice in San Jose

Here’s how loan types often line up with price ranges:

• Under $1M → Conventional or FHA

• $1M–$1.5M → Conventional or Jumbo

• $1.5M+ → Jumbo almost always

This is why understanding down payment + loan limits is critical.

If you’re unsure how much home you can afford, review:
👉 https://re38.com/san-jose-home-buying-process-guide

How Loan Type Affects Your Offer Strength

In San Jose, sellers consider:

• loan type

• down payment size

• appraisal risk

• buyer certainty

Generally:

• Conventional & Jumbo = strongest perception

• VA = strong when structured well

• FHA = weaker in competitive situations

This doesn’t mean FHA or VA buyers can’t win — it just means strategy matters.

Which Mortgage Is “Best” for You?

The best loan depends on:

• your cash reserves

• monthly payment comfort

• how competitive the market is

• your long-term plans

• whether you plan to refinance later

This is why choosing the right mortgage is not just a lender decision — it’s a strategy decision.

What You Should Do Next

Before locking into a loan type, I help buyers:

• compare loan scenarios

• understand payment differences

• assess offer competitiveness

• align financing with market conditions

If you want clarity, let’s talk.

👉 https://re38.com/contact

📞 Not Sure Which Mortgage Is Best for You?

A short conversation can help you avoid costly mistakes and choose the loan that fits your goals — without pressure.

Zaid Hanna
408-515-1613
www.re38.com