These are all examples of home loan programs that homebuyers can choose from. We offer all four of these, plus several more options. Let’s take a quick look at what makes each unique.

• Conventional - Lower rates and fees for borrowers making a down payment with good credit

• FHA - Popular with first-time homebuyers due to lower down payment requirements

• USDA - Zero-down options for rural borrowers in small towns

• VA - Competitive rates, zero-down options, and no private mortgage insurance (PMI) requirement for veterans, active service members, and their surviving spouses.

There are three main factors that come into play when being approved for a mortgage:

• Credit score. Each loan program has a minimum credit score requirement in order to qualify. Higher credit scores can allow you to qualify for lower interest rates, too.

• Down payment. Some loan programs require you to make a down payment of a certain amount.

• Debt-to-income ratio (DTI). Your debts should only make up a certain percentage of your income, because you’re about to incur a large and important debt by purchasing a home.

Mortgage Broker – Helps buyers find mortgage lenders and assists with loan processing.

Mortgage Lender – The company or organization that actually makes the loan.

Loan Officer – An employee of the lender or broker that is directly involved in the loan process from start to finish.

A pre-qualification is just your mortgage adviser’s estimate on your ability to buy a home. It’s based on your credit score and some other self-reported details. A pre-qual may give you a good idea on which loan program fits you best, and maybe even how much you’ll qualify for.

A pre-approval officially confirms how much you’re able to borrow. Your income and asset documents go through a more formal review. After getting pre-approved, you’re able to take a more serious look at buying a house. If you’re not able to get pre-approved, your adviser will be able to offer some helpful tips on raising your credit score, lowering your debt, or working through any other financial obstacles preventing you from buying a home.

You'll need to take several things into account when determining how much you can comfortably afford. Consider how much you make, your monthly expenses, how much money you have saved, how much you can put towards a down payment, current interest rates and current home values.

You should also think about how much you feel comfortable paying each month for a home. Don't forget to include other expenses for things like cars, food, gas, groceries, entertainment and clothes. Write everything down and review your budget so you can see how much you bring in versus how much you spend each month.

PMI is for conventional loans and covers the lender if you stop paying your mortgage and default on your loan. The yearly cost of PMI is about 1% of your outstanding loan balance and is added to your monthly mortgage payment. You can request to have PMI eliminated once your outstanding balance reaches 80% of the original loan amount.