Choosing the right mortgage depends on factors like credit score, cash flow, and goals. Common types include Conventional Loans for those with strong credit, FHA Loans for first-time buyers with lower credit scores, VA Loans for military members with no down payment, and USDA Loans for rural homebuyers. Fixed-rate mortgages offer predictability, while Adjustable-rate Mortgages (ARM) can be ideal for short-term buyers. Understanding these options ensures you make the best decision for your future, whether buying a home or investing.
Understanding Different Types of Mortgage Loans
Before you go full throttle into the real estate game, you gotta know the different types of mortgage loans out there. Which mortgage type is right for you? That depends on your credit, your cash flow, and your end goal (home sweet home or future rental income?).
Conventional Loans
This is your standard loan. No government backing. High expectations.
- Good credit? You’re in.
- Want to put down 20% or more? You can skip private mortgage insurance (PMI).
- These loans work for primary residences, rentals, and second homes.
Perfect if you’re financially solid and want to avoid extra fees.
FHA Loans (Federal Housing Administration)
If your credit score hasn’t exactly been MVP level, FHA loans could be your door in.
- Lower credit score minimums (as low as 580).
- Down payments as low as 3.5%.
- But, you’ll pay mortgage insurance no matter how much you put down.
This loan is killer for first-time buyers who need a little extra wiggle room.
VA Loans (Veterans Affairs)
Served in the military? This is your golden ticket.
- No down payment. Zero. Nada.
- No mortgage insurance.
- Usually has better interest rates vs other loans.
Not available to everyone, but if you’re eligible—it’s a no-brainer.
USDA Loans (U.S. Department of Agriculture)
Planning to buy in a rural spot? This one’s got your name on it.
- No down payment needed.
- Low mortgage insurance fees.
- You’ll need to meet income and location requirements.
This one’s worth checking out if you’re cool living outside a metro area.
Fixed-Rate vs Adjustable-Rate Mortgages (ARM)
This part gets people tripped up fast. Let me cut to the chase.
Fixed-Rate Mortgage
Your interest rate stays the same for the life of the loan.
- Simple. Straightforward.
- Predictable payments every single month.
- Popular for 30-year and 15-year terms.
Good if you plan to stay put long-term and want to avoid rate hikes.
ARM (Adjustable-Rate Mortgage)
The rate starts low. Then it moves up (or down), usually after 5, 7, or 10 years.
- Lower initial interest rates.
- Great if you’re flipping or planning to move in a few years.
- Can be risky if rates go up and you’re still in the property.
Use this if you know how long you’re keeping the house—or if you’re flipping like the folks on HGTV.
Quick Comparison Table
| Mortgage Type | Down Payment | Credit Score | Ideal For |
|---|---|---|---|
| Conventional Loan | 5% – 20%+ | 620+ | Buyers with strong credit |
| FHA Loan | 3.5%+ | 580+ | First-time buyers or less-than-perfect credit |
| VA Loan | $0 | Flexible | Veterans and active military |
| USDA Loan | $0 | 640 preferred | Rural & moderate-income buyers |
Ask Yourself These Questions
- Is this my forever home or a stepping stone?
- Do I care more about a lower monthly payment or long-term savings?
- Do I want flexibility or predictability?
It’s not just about which mortgage is cheapest—it’s about which is set up to move YOU forward based on what you actually want.
Real Example: My Client Jess
Jess had a 585 credit score and $9K saved. She thought she could only rent for another year. But we looked at her situation, and boom—we used an FHA loan. She got a cute 2-bedroom townhome outside Columbus. Payment? Cheaper than her rent. Win. So… Which mortgage type is right for you? The answer isn’t “one-size-fits-all,” but knowing your options puts you in control. And if you’re into real estate investing or want to see how your mortgage decision connects to bigger wealth playbooks, check this out on the reAlpha blog.
FAQs
Do I need 20% down to buy a home?
Nope. FHA, VA, and USDA loans allow you in with little to no down payment. 20% helps skip PMI, but it’s not required.
Which mortgage type is best for first-time buyers?
FHA loans are a solid bet for first-timers. But if you’re eligible, VA and USDA are even better deals with no down payment.
What’s better: a 15-year or 30-year mortgage?
A 15-year saves you on interest and builds equity faster. But your monthly’s gonna be higher. Go 30 if you want more cash flow flexibility.
Can I switch mortgage types later?
Yep. You can refinance later on into a different type, especially if your credit or income improves down the line.
Which mortgage type is right for you if you’re investing?
If you’re investing, conventional loans give you freedom to use the home as a rental. FHA is owner-occupied only. Know the rulebook before you leap.
Conclusion
selecting the right mortgage type hinges on your financial situation and long-term goals. Whether it’s a Conventional, FHA, VA, or USDA loan, each option caters to different needs. Understanding the differences between Fixed-rate and Adjustable-rate Mortgages helps you make an informed decision. By evaluating your credit, down payment, and homeownership plans, you can confidently choose the mortgage that aligns with your needs and financial future.
Avoid These Common Mistakes on Your LES to protect your military pay and benefits. Errors like incorrect leave balances, wrong BAH rates, missing special pay, or PCS overpayments can cost you thousands. Regularly review your LES, cross-check deductions, and verify allowances with DFAS tools. If mistakes occur, act fast—report discrepancies, file corrections, and keep records. Staying proactive ensures financial security and prevents long-term pay issues..
What is a Military LES (Leave and Earnings Statement)?
Before we jump in, let’s set the table. Your LES is basically the military’s version of a monthly paycheck stub + benefits overview + days off status report all rolled into one. It shows your:
- Basic pay
- BAS (Basic Allowance for Subsistence)
- BAH (Basic Allowance for Housing)
- Leave balance
- Deductions (taxes, SGLI, mid-month pay, etc.)
- Allotments
The keyword here is: everything. Because one small slip on your LES can snowball. Not to mention, your LES tracks your pay history and even your career progress. That’s why avoiding common military LES errors is critical.
Top 7 Common Military LES Errors (And How to Catch Them)
1. Wrong Leave Balance
This one’s a classic. One month you’re looking at 10.5 days of leave. Next month, it magically drops to 5.3—and you didn’t take any time off. Double-check your leave balance every month. Cross-check it with any DA 31 forms you’ve submitted. If it doesn’t match, report it right away. The clock doesn’t stop ticking on leave errors—and leave lost is leave gone forever after the fiscal year hits.
How to fix it: Talk to your admin or S1. You might need to submit a Leave Adjustment Request. Keep copies of all your leave forms.
2. Incorrect BAH Rate
I’ve seen guys moved to a new duty station and still be getting old BAH for 3 pay periods. BAH rates are tied to your duty station, dependency status, and sometimes your rank. If any of those change, so should your BAH.
Things to check:
- Your zip code
- If you’re claiming spouse or kids
- Your grade
Compare your BAH to what the official DFAS BAH Calculator says you should be receiving.
How to fix it: File a DA Form 5960 through your S1. Make sure your dependent info in DEERS is locked in too.
3. Missing or Incorrect Special Pay
Whether it’s flight pay, hazardous duty pay, or language incentive pay, these extra deals are perks that add up—and if you qualify for them, they better show on your LES. Saw someone qualified for SDAP (Special Duty Assignment Pay) while doing the same job as me—and I wasn’t getting it? You bet I spoke up. Check this box: Make sure your MOS, job duty, and certifications have been reported correctly through your command channel.
How to fix it: Verify with your Career Counselor or Admin. Update your records in the Personnel System if needed.
4. Overpayment from PCS Mistakes
PCS overpayments are silent killers. You move, you get TLA or dislocation allowance, and a few months later—bam—you get a debt letter from DFAS claiming you owe them $2300 because of a housing allowance overlap.
Don’t ignore this. I’ve seen people wait it out only to have DFAS garnish their paycheck months later.
How to fix it: File a waiver or appeal immediately. Keep all your orders, lodging receipts, and travel vouchers organized. Talk to your finance office ASAP.
5. Combat Zone Tax Exclusion Errors
This one punches hard. If you’re in a combat zone, your pay might be tax-free. But if DFAS doesn’t flag it right, you’ll end up getting taxed when you shouldn’t. Your LES will read “CZTE” in the remarks section when you’re tax-exempt. If that’s missing and you’re deployed, it means Uncle Sam is taking a bigger bite than he should.
How to fix it: Have your command file a combat zone deployment start date with finance. It should be backed by your deployment orders.
6. Allotment Disappeared or Got Duplicated
Allotments are how we autopay bills—rent, savings, loans, etc. I once added a savings allotment, and it duplicated itself. That $300 became $600 overnight. If I wasn’t checking, I’d still be wondering why my paycheck felt light. ALWAYS go over your allotments section on your LES. Make sure what you meant to pay is what’s actually being pulled out.
How to fix it: Use MyPay to adjust allotments directly or visit your finance office. Don’t wait till end-of-month deductions start making things ugly.
7. Mid-Month Pay Discrepancies
Here’s how DFAS does your pay:
- You get an estimate at mid-month (called “Advance Pay”)
- Then the LES at the end of the month calculates actual gross pay, deductions, etc.
Problem: If something changed in your pay (BAH, leave days, promos), it’s not always calculated right until the end-of-month LES hits. That’s where people tilt their heads trying to figure why their end-of-month check is way low. Usually…it’s because mid-month overpaid and DFAS is correcting. Check both mid-month and full month LES to compare the net pay total.
How to fix it: If it’s legit, no fix needed—it adjusts. If it’s an actual pay problem (like BAH drop or retroactive pay), talk to your finance shop.
How to Stay Ahead of LES Errors
Look—military LES errors aren’t going away. But avoiding them is like going to the gym—you catch it early, it’s easier to fix.
Here’s how I keep myself pay-protected:
- Review your LES every month. Without fail.
- Know what every acronym stands for. Don’t let TSP, SGLI, FSA, or SDA slip under your radar.
- Keep hard copies of orders, leave forms, and pay changes. When you need to prove something, paper wins every time.
- Use MyPay to cross-check all pay changes and banking info.
Closing Thoughts
Your LES is more than just a pay stub—it’s a critical financial document that impacts your pay, benefits, and career. Avoid These Common Mistakes on Your LES by reviewing it monthly, verifying deductions, and acting quickly on discrepancies. Whether it’s incorrect leave balances, BAH errors, or missing special pay, staying proactive can prevent financial headaches. Protect your earnings by double-checking your LES and addressing issues before they become costly problems.