The Real Buyer's Guide · Section Four

Loan types: which one fits you.

There is no best loan. There is the one that fits your down payment, your credit, your service history and the address you’re buying. Here is what each one asks of you, and what it gives back.

The four, side by side

Two of those four require no down payment at all, and in Tooele County a lot of buyers qualify for one of them without ever finding out.

Conventional

The default. Not government-insured, so lenders lean harder on your credit and your ratios — but it’s flexible, widely available, and it has one significant advantage over FHA that decides the matter for a lot of buyers.

Private mortgage insurance ends. If you put down less than 20%, you pay PMI — an extra monthly amount protecting the lender, not you. But it comes off, and the law sets when. You can request cancellation once your balance is scheduled to reach 80% of the home’s original value. Your servicer must terminate it automatically at 78%. If neither happens, it ends the month after you pass the midpoint of your loan’s schedule — year 15 of a 30-year loan.

Requesting it early comes with conditions. The request goes in writing, your recent payment history has to be clean, you have to certify there are no second liens on the property, and the servicer can require an appraisal — paid for by you — to confirm the value hasn’t dropped.

One thing worth knowing before you make extra payments. Automatic termination at 78% runs off the original amortisation schedule, so paying the balance down faster does not move that date. Extra payments only get you there sooner if you ask — which is a good reason to know the 80% number and put it in your calendar.

Source: Consumer Financial Protection Bureau, on the Homeowners Protection Act, which governs loans closed on or after 29 July 1999. Verified 2026-08-13.

That matters enormously over a decade of payments, and it is the reason a conventional loan with a slightly higher rate frequently beats an FHA loan with a lower one.

FHA, and the thing nobody tells you

FHA exists to open the door to buyers conventional financing turns away — lower credit scores, shorter histories, past problems that are genuinely in the past. It does that job well, and for many people it’s the right answer.

But it has to be chosen knowingly, because of this:

Ask your lender to price FHA and conventional side by side, and to show you the total monthly payment including insurance, not just the rate. Then ask what it takes to get out of the insurance under each. That one question changes a lot of minds.

VA

If you served, start here. Every time.

• No down payment. Not a low one. None.
• No monthly mortgage insurance, ever. Not PMI, not MIP. This is the part that beats every other option on monthly cost.
• Limits on what you can be charged in certain closing costs.
• Competitive rates, because the loan is backed by the VA.

The trade is a one-time funding fee, usually financed into the loan rather than paid at closing. On a purchase it runs 2.15% with nothing down, 1.5% with 5% down, and 1.25% with 10% or more. Using the benefit a second time with less than 5% down raises it to 3.3% — but at 5% down or more, a repeat use costs exactly what a first use costs.

It no longer varies by branch. Regular military, Reserve and National Guard all pay the same rates. If you were quoted a higher figure because of Guard or Reserve service, that distinction is gone.

Source: VA.gov, funding fee schedule effective 7 April 2023. Verified 2026-08-13.

Two things veterans routinely don’t know

The funding fee is waived entirely for veterans receiving compensation for a service-connected disability. It is also waived if you are entitled to that compensation but draw retirement or active-duty pay instead, if you hold a proposed or memorandum rating on a pre-discharge claim, if you are on active duty and can show you received a Purple Heart on or before closing, or if you are a surviving spouse receiving Dependency and Indemnity Compensation.

That is not a small discount — on a median-priced home in this county it is thousands of dollars, and I have met veterans who paid it because nobody asked them the question. If any of those describe you, say so to your lender on the first call. Nobody goes looking on your behalf.

Source: VA.gov, funding fee exemptions. Verified 2026-08-13.

Your entitlement is not single-use. Using a VA loan once does not spend it forever. It can be restored after you sell and pay off the loan, and in some circumstances you can have more than one at a time. If someone told you that you already used yours up, get that checked rather than taken on faith.

I spent twenty-seven years in the Marine Corps and the Utah Army National Guard, including two deployments to Iraq. I am not going to let a veteran client leave a benefit on the table because the process was explained badly.

USDA — the one Tooele buyers overlook

Most people hear “USDA loan” and picture a farm. It isn’t a farm program. It’s a rural development program, and “rural” by its definition covers a great deal of ground that does not feel rural at all — small towns, subdivisions, ordinary houses on ordinary streets.

That matters here specifically. Parts of Tooele County fall inside USDA-eligible boundaries, which means this county has two separate zero-down paths: VA if you served, USDA if the address qualifies and your income fits. Buyers who assume 5% down is the floor are frequently wrong about their own situation.

Two gates, and both are absolute:

• The property address must be in an eligible area. This is checked address by address on the USDA’s own map, and the boundaries get redrawn periodically. [VERIFY which parts of Tooele County currently qualify] Never assume from a neighbouring house.
• Your household income must be under the limit for the area and household size — this one counts the whole household, not just borrowers. [VERIFY current limit for Tooele County]

There are fees in place of a down payment — an upfront guarantee fee and an annual fee — and they are generally lighter than FHA’s equivalent. [VERIFY current fee structure]

Before you conclude you need a down payment, check whether the house you want is on the right side of a line on a map. It takes about a minute.

Mortgage insurance, in one place

This is where most of the confusion lives, so here it is in a single table.

How to actually choose

In this order, because each question removes options:

• Did you serve? If yes, price VA first. It usually wins on monthly cost and it’s the only one of the four with no monthly insurance at all.
• Is the address USDA-eligible and is your income under the limit? If both, that’s a second zero-down option worth pricing.
• Is your credit strong enough for conventional? If so, compare it against FHA on total monthly payment and on how each one’s insurance ends.
• If FHA is the realistic route, choose it deliberately, and know going in what it takes to refinance out of the insurance later.

Then layer Section Five on top, because assistance interacts with all four differently.

What to do next

• Ask for a side-by-side comparison of every program you qualify for — total monthly payment, not rate alone.
• If you served, say so on the first call, and mention any service-connected disability rating.
• Have the address checked against the USDA map before you rule out zero-down.
• For every option, ask: when does the mortgage insurance stop? The answer is different four times.

If you want help thinking through which of these fits your situation, call or email me. I’ll give you my honest read, including when the answer is the less obvious one.