Buying a home is one of life’s biggest milestones. Whether you’re dreaming of a backyard pool or a home with a stunning water view, the journey starts with a mortgage pre-approval.

The process can feel like learning a new language, but with a little education, you can shop confidently for a new home. At Achieva Credit Union, we want you to be well prepared and know about home loans well before you start your home search. Here is everything you need to know before getting a pre-approval.

What is a Mortgage?

A mortgage is simply a loan used to purchase a home. However, your monthly payment covers more than just the house price. Most payments include four main parts, often called PITI:

• Principal: The money that goes toward paying off the actual balance of your loan.
• Interest: The fee the lender charges for the loan. The APR (Annual Percentage Rate) is the total cost of the loan (including fees). Always compare the APRs lenders are offering to see which loan costs less.
• Taxes and Insurance: Local property taxes and homeowners’ insurance funds are usually held in an “escrow” account and paid by the lender on your behalf.

Choosing the Right Mortgage Type

Not all mortgage loans are the same. Your goals and budget will determine which type of loan is best for you, and speaking with a mortgage advisor can provide more details on the benefits of each.

Conventional Loans

Conventional loans are the most common type of mortgage, and because a specific government agency doesn’t back them, they have their own unique “rules of the road.”

Here is a breakdown of what makes them unique and how they work.

Why Are They called “Conventional”?

The name comes from the fact that these loans are not insured or guaranteed by the government (unlike FHA, VA, or USDA loans). Instead, they follow “conventional” guidelines set by two organizations: Fannie Mae and Freddie Mac. (Take some time to research both of these and how they support funding the housing market.)

To balance the risks associated with conventional loans , they usually have slightly stricter requirements for your credit score and down payment compared to an FHA loan.

What Are Mortgage Terms?

Conventional loans, like most mortgage loans, have flexibility. You can customize them to fit your specific financial plan:

• Length of the Loan: The most common terms are 15 years and 30 years. However, some lenders offer 10-year or 20-year options.
• Rate Type: You can choose a Fixed-Rate (the interest rate never changes) or an Adjustable-Rate (ARM) (the rate is fixed for a few years and then moves with the market).
• Down Payment: You don’t always need 20%! Many conventional programs allow first-time buyers to put down as little as 3%. However, if you put down less than 20%, you will have to pay for Private Mortgage Insurance (PMI).

How Common Are Conventional Loans?

Yes, they are the “heavy hitters” of the mortgage world. Roughly 70% to 80% of all mortgage applications are for conventional loans. They are the standard choice for buyers with:

• A credit score of 620 or higher.
• A stable income.
• Some savings for a down payment and closing costs.

Who Offers Conventional Mortgages?

Almost every bank, credit union, and mortgage company offers conventional loans. Because they follow the standard Fannie Mae and Freddie Mac rules, they are easy for lenders to manage and sell.

However, even though the rules are similar, the costs are not. Different lenders will offer different interest rates and charge different fees for the same conventional loan.

The “Big Benefit” of Conventional Loans

The main reason people strive for a conventional loan is PMI cancellation. Unlike an FHA loan (where you often pay mortgage insurance for the entire life of the loan), with a conventional loan, that extra monthly fee automatically goes away once you own 22% of your home’s value. It’s a great way to lower your monthly bills down the road!

Government Mortgage Loans

Government-backed mortgage loans are often for homebuyers who don’t fit the standard 20%-down-payment mold. Because the government is basically telling the lender, “If this borrower can’t pay, we’ve got your back,” lenders are much more willing to offer great terms.

Here is a closer look at the “Big Three” government-backed options.

FHA Loans: The First Time Homebuyer Favorite

FHA loans (Federal Housing Administration) are designed to make homeownership accessible. They are nationwide and don’t have income or location limits.

• Credit Score Flexibility: According to FHA.com, in 2026, if your credit score is 580 or higher, you can qualify with a down payment as low as 3.5%. If your score is between 500 and 579, you can still get a loan, but you’ll usually need a 10% down payment.
• The Insurance Catch: Because FHA takes on more risk, you’ll pay an Upfront Mortgage Insurance Premium (UFMIP) of 1.75% of the loan amount, plus a monthly fee. Most people roll that upfront cost into their total loan, so they don’t have to pay it in cash on move-in day.

VA Loans: The “Zero-Down” Benefit for Heroes

If you are an active-duty service member, a veteran, or an eligible surviving spouse, this is almost always your best option.

• $0 Down Payment: This is the biggest perk. You can buy a home without saving for years for a down payment.
• No Monthly Mortgage Insurance: Unlike FHA or Conventional loans, VA loans do not charge you a monthly insurance fee. This can save you hundreds of dollars every month.
• The Funding Fee: Instead of monthly insurance, the VA charges a one-time “Funding Fee” to keep the program running. In 2026, this is usually 2.15% for first-time users with $0 down.
  • Note: If you have a service-connected disability, this fee is often waived entirely.

Fixed-Rate vs. Adjustable-Rate: Which Should You Pick?

• Fixed-Rate Mortgage: Your interest rate stays the exact same for the life of the loan (usually 15 or 30 years). Your payment is predictable, making it easy to budget.
• Adjustable-Rate Mortgage (ARM): These start with a lower “teaser” rate for a few years, then the rate changes based on the market. These are best if you plan to move or refinance in a few years.

Concepts for a Stronger Home Offer

Before you start touring houses, make sure you understand these three “Offer Strengtheners”:

1. Pre-Approval: A pre-qualification is just a “maybe.” A pre-approval means a lender has verified your income and credit. In a competitive Florida market, sellers often won’t even look at your offer without a pre-approval letter.
2. Cash to Close: This is the total amount of money you need on closing day. It includes your down payment plus closing costs (like appraisal fees and title insurance).
3. Debt-to-Income (DTI): Lenders look at how much of your monthly income goes toward debt. Paying off a small credit card or car loan before you apply can actually help you qualify for a bigger home!

How Achieva Credit Union Can Help

At Achieva Credit Union, we believe the path to homeownership is paved with clarity, not stress. Whether you are a first-time homebuyer or a seasoned pro, our goal is to streamline the journey from your first question to your final signature. We provide fast, local pre-approvals that give you the financial “green light” needed to begin shopping with total confidence.

By pairing you with a local expert who knows the Florida market, we ensure you have the necessary knowledge to understand your budget, compare loan types, and, most importantly, make a competitive offer the moment you find the right home. With Achieva, you aren’t just getting a loan; you’re getting a local partner dedicated to making your homebuying experience as smooth as possible.

Ready to start?

• Get Pre-approved: Visit Achievacu.com to learn more about our mortgages and start your application online.
• Explore Options: Ask us about our low-to-no-down-payment mortgage choices.
• Expert Guidance: Our local Florida experienced mortgage advisor team is available to walk you through every step.

The Homebuying Timeline: 8 Simple Steps

1. Set Your Budget: Know what you can afford monthly.
2. Get Pre-Approved: Contact your lender to get your letter.
3. Find a Realtor: Pick a partner to help you hunt for homes.
4. Start Shopping: Visit homes and compare your must-haves.
5. Make an Offer: Your agent will help you negotiate the price.
6. Inspection & Appraisal: Ensure the house passes inspection and is worth the price.
7. Finalize the Loan: Submit your final paperwork to your lender.
8. Closing Day: Sign the papers and get your keys!

Check out our other home loan articles on Achieva Life: Choosing a Home Loan That is Right for You and What You Need to Know as a First Time Homebuyer.

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Achieva Credit Union is an equal housing lender and federally insured by the NCUA.