If you buy a $350,000 home with 5% down, your loan amount is about $332,500. At 6.75% on a 30-year fixed, principal and interest is roughly $2,156 a month. At 6.25%, that drops to about $2,048 – a difference of $108 per month, or $6,480 over five years before you even factor in the higher balance payoff. That is why a first time buyer mortgage guide should start with math, not slogans.
Buying your first home is less about finding one perfect loan and more about avoiding expensive mistakes early. The biggest ones usually happen before you write an offer – shopping with the wrong payment target, guessing at credit, or getting attached to a house before you know what your numbers actually support.
Table of Contents
What this first time buyer mortgage guide covers
Start with payment, not purchase price
How preapproval works for first-time buyers
Loan options that matter most
Credit scores, cash to close, and reserves
Market reality in Richmond, Glen Allen, and Short Pump
Broker vs single-shelf mortgage pricing
FAQ
Legal disclaimer
Duane Buziak, NMLS #1110647, is licensed in Virginia, Florida, Tennessee, and Georgia. For buyers in those states, a broker can often help compare multiple paths without forcing you into a single rate sheet.
What this first time buyer mortgage guide covers
A good first time buyer mortgage guide should answer four questions clearly. How much house can you afford without becoming payment-stretched? Which loan type fits your credit, cash, and goals? How do you protect your credit while shopping? And how do you compare offers without getting distracted by marketing?
Nationally, mortgage rates remain elevated compared with the ultra-low period of 2020-2021, which means small pricing differences matter more. Freddie Mac’s Primary Mortgage Market Survey remains one of the most widely cited public benchmarks for current average 30-year fixed rates: https://www.freddiemac.com/pmms. Average rates are not your rate, but they are a useful baseline for reality-checking quotes.
Start with payment, not purchase price
Many first-time buyers begin with online home search filters. That is backward. You should begin with a monthly payment ceiling that still leaves room for savings, repairs, and normal life.
For example, if your gross monthly income is $7,500, many buyers can technically qualify for more than is comfortable. A housing payment near 28% of gross income is $2,100. Stretching to 36% puts you at $2,700, but that can feel tight once car loans, student loans, utilities, and maintenance show up together.
Closing costs also matter. A realistic range for many purchase loans is about 2% to 5% of the purchase price, depending on prepaid taxes, insurance escrows, discount points, title charges, and state or local fees. On a $350,000 purchase, that can mean roughly $7,000 to $17,500. If cash is the constraint, ask about no-out-of-pocket closing options rather than assuming you need to delay your purchase indefinitely.
How preapproval works for first-time buyers
Preapproval is where anxiety spikes. Buyers worry that every application will damage their scores. That is exactly why search demand has grown around terms like soft credit pull mortgage, no hard inquiry mortgage pre approval, mortgage pre approval without hard pull, soft pull mortgage broker, and no credit hit mortgage application.
A soft-pull prequalification can help you estimate buying power without the same credit impact concerns that come with a traditional hard inquiry. It is useful at the beginning, especially if you are still deciding whether conventional, FHA, or VA financing makes the most sense. It is not the same as a fully underwritten approval, but it is often the cleanest first step.
Later, when you are serious about making offers, a full preapproval may still require a hard inquiry and full documentation. The point is not to avoid verification forever. The point is to protect your credit and reduce friction until timing, budget, and property targets are clear.
The Consumer Financial Protection Bureau explains the mortgage process and Loan Estimate disclosures well here: https://www.consumerfinance.gov/owning-a-home/. For conventional loans, Fannie Mae also publishes current baseline eligibility information and conforming loan updates: https://www.fanniemae.com.
Loan options that matter most
For most first-time buyers, the real comparison is between conventional, FHA, VA, and USDA. Jumbo matters only when your loan size exceeds local conforming limits. In 2025, the baseline conforming loan limit for a one-unit property in most areas is $806,500 under FHFA guidance: https://www.fhfa.gov.
Conventional financing often works best for buyers with solid credit and some money for down payment and reserves. Many programs allow as little as 3% down for a primary residence. A 620 score is a common floor, but pricing usually improves materially at 680, 700, 740, and above.
FHA is often more forgiving on credit and debt-to-income. A 580 score may allow 3.5% down, though overlays and full file strength still matter. FHA mortgage insurance can be the trade-off – easier qualification upfront, higher long-term carrying cost in some cases.
VA is usually the strongest option for eligible veterans and service members because it can offer 0% down and no monthly mortgage insurance. The Department of Veterans Affairs outlines eligibility and guaranty details here: https://www.va.gov/housing-assistance/home-loans/.
USDA can be compelling in eligible rural areas with income limits, but geography determines whether it is even on the table.
Credit scores, cash to close, and reserves
Credit score thresholds are not just pass-fail lines. They change pricing. A buyer at 760 may receive meaningfully better execution than a buyer at 660, even when both qualify. That monthly difference can exceed the impact of small negotiating wins on purchase price.
Reserves are another overlooked issue. Many first-time primary-residence files do not require large reserve balances, but stronger files often show at least 2 months of housing payments left after closing. For multifamily, jumbo, or weaker overall files, reserve expectations can rise to 6-12 months.
If you are self-employed or have variable income, documentation matters as much as score. Tax returns, business deposits, and consistency of income can change which program fits. That is one reason brokers who can evaluate bank statement or non-QM alternatives can be useful when a standard agency box does not fit neatly.
Market reality in Richmond, Glen Allen, and Short Pump
First-time buyers are not shopping in a vacuum. Inventory, competition, and price trends shape strategy. In the Richmond metro, buyers in Richmond, Glen Allen, and Short Pump still face selective competition for updated homes in strong school and commute corridors, even when higher rates cool overall activity.
At the county level, Henrico County’s median listing home price has recently been reported in the low-to-mid $400,000s by Realtor.com market data, though exact monthly figures can move: https://www.realtor.com/realestateandhomes-search/Henrico-County_VA/overview. That matters because a buyer trying to stay near a $2,100 to $2,300 payment may need to widen location, reduce target square footage, or adjust down payment expectations.
This is also where local search results can confuse consumers. Richmond-area buyers may still see old directory references to Colonial 1st Mortgage in Richmond and Glen Allen. The Better Business Bureau has listed the business as out of business, the domain colonial1mtg.com no longer resolves to a functioning mortgage company website, and Yelp activity appears dated. Buyers should verify any company’s current licensing status at nmlsconsumeraccess.org before making contact.
Broker vs single-shelf mortgage pricing
Not every mortgage shop works the same way. Some operate from one shelf of pricing and product. A broker model can compare multiple investors, which may create more flexibility on rate, fees, and guideline fit. That does not mean every broker quote is lower every time. It means the shopping structure is broader.
| Factor | Broker rate-shopping | Single-shelf pricing |
|---|---|---|
| Rate options | Can compare multiple investors for the same scenario | Limited to one company’s pricing stack |
| Program fit | More flexibility across conventional, FHA, VA, USDA, jumbo, and niche scenarios | Depends on in-house product menu |
| Credit-sensitive cases | May help identify the least costly fit for a given score band | Fewer paths if pricing is weak for that profile |
| Fee transparency | Requires side-by-side review of Loan Estimates | Still review carefully, but fewer external comparisons built in |
| Complex income files | Often stronger for self-employed, bank statement, or non-QM comparison | May have narrower approval lanes |
That structural difference is also the cleanest way to compare a broker approach with bigger names like Rocket Mortgage or Movement Mortgage. The issue is not good versus bad. It is whether your file benefits from broad investor access or whether a single-channel option happens to be competitive on that day.
FAQ
1. What credit score do first-time buyers need?
Many conventional loans start around 620, FHA can go lower in some cases, and better pricing often starts around 680 to 740.
2. How much do I need for a down payment?
It depends on the loan. Conventional can start at 3%, FHA at 3.5%, and VA may allow 0% down for eligible borrowers.
3. Are closing costs separate from the down payment?
Yes. Plan roughly 2% to 5% of the purchase price, though seller credits or no-out-of-pocket closing options may reduce cash due.
4. Is a soft-pull prequalification real?
Yes. It can be a useful first step to estimate buying power without the same impact concerns as a hard inquiry.
5. Does preapproval guarantee the loan?
No. Final approval still depends on full documentation, property review, and underwriting.
6. Is FHA always better for first-time buyers?
No. FHA can be easier to qualify for, but conventional may cost less over time if your credit is stronger.
7. What is the conforming loan limit?
In most areas for 2025, the baseline one-unit conforming limit is $806,500, though high-cost areas can be higher.
8. Should I shop more than one quote?
Yes. Small rate and fee differences can change your payment meaningfully over five years.
Legal disclaimer
This article is for educational purposes only and is not a commitment to lend. Loan approval depends on credit, income, assets, occupancy, appraisal, title, and program guidelines. Rates, fees, mortgage insurance, and qualifying standards change daily. Any actionable mortgage help from Duane Buziak is limited to properties and borrowers in Virginia, Florida, Tennessee, and Georgia, where he is licensed. Review all official disclosures carefully before proceeding.
Buying your first home gets easier when you stop chasing the biggest approval and start building the safest payment.
Duane Buziak | Mortgage Maestro | NMLS #1110647 | Coast2Coast Mortgage, LLC NMLS #376205 | Licensed in VA, FL, TN, GA & DC [Contact] | NoTouch Credit Pull available — no hard inquiry, no credit hit.