first time home buyers hampton roads
first time homebuyers hampton roads
first time home buyers currituck north carolina
first time homebuyers currituck north carolina

First-Time Homebuyers

So, you're finally ready to pursue purchasing your first home - GREAT! Your on your way to establishing a major asset that should serve you well towards building wealth. Home ownership is typically most people's primary investment asset. The sooner you are able to buy that first home, the more that asset will open doors for wealth building opportunities in the future.

Question is, what do we mean by that? The housing market has been especially volatile over the last twenty plus years. Housing values have fluctuated during that period, however the values have always greatly increased. Like mutual funds, IRA's, stocks and bonds, building wealth over time is the principle.  Owning a house typically increases wealth potential exponentially over other investments - and for good reason. We have had two major increases to home values since the start of the 2000's where home prices have tripled.

The point is, it is hard to predict if housing values will increase at these levels in the future. However, if you are feeling discouraged by what you're currently seeing with the market and thinking that investing in a home or real estate is too risky - you'd be wrong. Buying a home at a young age is still considered the best asset you can obtain for building your future wealth.

Who Qualifies As A First-Time Homebuyer?

According to the U.S. Department of Housing and Urban Development (HUD), a first-time homebuyer is defined as "someone who has not owned/occupied or had an ownership interest in their principal residence for three years prior to the purchase of the new property. If you’re buying a home with someone who has previously owned a home, but you have not (or vice versa), you still qualify as first-time homebuyers."

So, this definition says you don't have to be a "first and only time" home buyer. Let your loan officer know if you fall under this criteria. It can save you a lot of money.

Your Credit Score is Paramount

Do You Know if You've Already Established Credit or Don't Know What Your Current Credit Score Is?
You Are Entitled to a Free Annual Credit Report From Each of the Three Primary Credit Reporting
Agencies - Equifax, Experian, and Transunion - Through

Establishing a good - not necessarily stellar - credit score is the first step and paramount to taking advantage of some of the numerous first-time homebuyer programs available. Hopefully you are in a position where you have demonstrated consistent responsibility in making payments on your car, credit card or other loans on time. There are programs out there that will accept a credit score as low as 500, however this is not a given and you can expect to pay a higher interest rate. Ideally, you would want a credit score at minimum in the upper 600's. This is important! If you haven't built adequate credit or need to improve it, this has to happen first.

For those who haven't built credit, start with applying for a credit card designed for new credit holders. For those who already have bad credit, these options are good for you, too. However, just know that with strict terms and high interest rates, these cards are unfavorable if you are not using them responsibly. Ideally, these should be used sparingly to ensure paying the balance off each month. The 20%-plus APR's offered is not something you want to leave a balance on. Their only purpose should be to establish or build an acceptable credit score to obtain a home loan.

Many local banks offer credit builder loans for a car or other purpose with reasonable rates. Check with your bank to see what they may offer.

Car dealerships also offer no or low credit purchase plans. However, you're considered a no-credit-history risk. Typically, loan terms will be stricter and interest rates will be higher.

The goal is obtaining a credit card or loan and demonstrating the making of payments on time. This will quickly establish or increase your credit score. Once this is accomplished, you can then take advantage of several programs designed to get you into your first home. From here, get with a mortgage loan officer to discuss your options. Based on this discussion, and if they are looking out for your best interest, they will recommend the best loan program you qualify for and fits your financial situation.

Your mortgage loan officer will then provide a pre-qualification letter that determines the home loan limit they are willing to provide you based on your income and assets. Basically telling you how much home you can afford. With this letter, I can then get to work to finding that first home meeting your criteria and within the mortgage loan amount you are qualified for.

Buyer's Agency Agreement

It costs a home buyer nothing to be represented by an exclusive real estate agent in a home purchase. The seller pays a percentage-based commission - typically 6% of the property's closing sales price.  The seller's and buyer's real estate agents are then compensated by a split of that total commission at closing.

The agent shown on the front yard sign of a home you are looking at is, by default, representing the seller - not you. Although a REALTOR® can handle both sides of a transaction (dual agency), it is typically not to your benefit to do so. You greatly reduce your negotiating power when a listing agent has financial and other information about the buyer during the process. The dual agent has an incentive for also receiving the full sales contract commission in this role. It is required to be split with the buyer's representative agent, otherwise.

An important step in the buying process is to hire a real estate agent that will represent you as a buyer by signing a Buyer's Agency Agreement with the agent of your choosing. Please know, you cannot sign with more than one. It is always a good idea to find a real estate agent that represents your side of a home buying transaction by signing a Buyers Agency Agreement.

First Time Homebuyer Programs

Federal & State Programs to Make Homeownership a Reality!

va home loan programs for first time home buyers

US Veteran Affairs VA Loan

If you are active-duty military, a veteran, or a spouse of a deceased veteran, The US Department of Veterans Affairs provides home buyers assistance with a VA loan. VA loans typically have competitive rates and, the best part, can offer loans without down payments or insurance on the mortgage. However, this loan is usually only for buyers with a credit score of 640 or higher.
fha loans for first-time homebuyers

FHA Loan

Designed for moderate to low income borrowers who are looking for low to zero down payments. Federal Housing Administration (FHA) loans require a credit score of at least 500. Interest rates for those with a credit score of 580 or lower might be higher than rates above.
usda home mortgage loan programs


For families and individuals that are in suburban and rural areas, The United States Department of Agriculture offers USDA loans that are a good option for buyers looking for a zero-down payment.  Buyers with a credit score of 640 or higher are more likely to receive a USDA Loan.
virginia housing first-time homebuyer programs

VHDA Loans

The Virginia Housing Development Authority (VHDA), now known as Virginia Housing, is a non-profit in Virginia that offers a loan program for first-time home buyers. It offers enticing 30-year fixed-rate loans where the rates never increase and options for zero down payment for those that qualify.
The program requires a credit score of 620 and above. Homebuyers who have not owned a home in the last three years are also eligible. Maximum income levels apply and there are limits to the loan amount based on the home’s location.
north carolina housing finance agency first time home buyers


The North Carolina 1st Home Advantage Down Payment offers $8,000 in down payment help that may provide a better boost for new buyers than the other down payment options available with the NC Home Advantage Mortgage™.

Steps To Buying a First Home

FHA/HUD First-time Buyers Guide

Step 1: Building Credit & Down Payment
An established credit score of 620 or higher is ideal for qualifying for a new home loan. Although many first-time homebuyer loans are designed to help reduce or eliminate a down payment and work with low credit scores, it is still important to show you have savings and an acceptable credit score when attempting to buy a first home.

Step 2: Mortgage Loan Prequalifying
Consult with a mortgage loan company to determine the best First Time Homebuyer loan program available for you. A good loan officer will dig into finding the best home loan program that fits you.

Your mortgage loan officer will provide a loan prequalification letter that sets the limit of the loan they are willing to provide to you based on your assets, savings and income.

To get a general idea of what your house payments will be, use this handy mortgage calculator.

Here are a couple of trusted mortgage loan officers I recommend calling to get pre-qualified:

Step 3: Buyer's Agency Agreement - It Costs You Nothing To Be Represented Exclusively As a Buyer by a Real Estate Agent!

An important step in the buying process is to hire a real estate agent that will represent you as a buyer by signing a Buyer's Agency Agreement with the agent of your choosing.

First-time Homebuying FAQs

You can find out by asking yourself some questions:

- Do I have a steady source of income (usually a job)?

- Have I been employed on a regular basis for the last 2-3 years?

- Is my current income reliable?

- Do I have a good record of paying my bills?

- Do I have money saved for a down payment?

- Do I have few outstanding debts, like car payments?

- Do I have the ability to pay a mortgage every month, plus additional costs?

If you can answer "yes" to these questions, you are probably ready to buy your own home.
The two don't really compare at all. The one advantage of renting is being generally free of most maintenance responsibilities. But by renting, you lose the chance to build equity, take advantage of tax benefits, and protect yourself against rent increases. Also, you may not be free to decorate without permission and may be at the mercy of the landlord for housing.

Owning a home has many benefits. When you make a mortgage payment, you are building equity. And that's an investment. Owning a home also qualifies you for tax breaks that assist you in dealing with your new financial responsibilities- like insurance, real estate taxes, and upkeep- which can be substantial. But given the freedom, stability, and security of owning your own home, they are worth it.
The lender considers your debt-to-income ratio, which is a comparison of your gross (pre-tax) income to housing and non-housing expenses. Non-housing expenses include such long-term debts as car or student loan payments, alimony, or child support. The lender also considers cash available for down payment and closing costs, credit history, etc. when determining your maximum loan amount.
In addition to comparing the home to your minimum requirement and wish lists, you may want to consider the following:

- Is there enough room for both the present and the future?

- Are there enough bedrooms and bathrooms?

- Is the home structurally sound?

- Do the mechanical systems and appliances work?

- Is the yard big enough?

- Do you like the floor plan?

- Will your furniture fit in the space? Is there enough storage space?

- Imagine the home in good weather and bad or will you be happy with it year round?

Take your time and think carefully about each house you see. Ask your real estate agent to point out the pros and cons of each home from a professional standpoint.
Many of your questions should focus on potential problems and maintenance issues. Does anything need to be replaced? What things require ongoing maintenance (e.g., paint, roof, HVAC, appliances, carpet)? Also ask about the house and neighborhood, focusing on quality of life issues. Be sure the seller's or real estate agent's answers are clear and complete. Ask questions until you understand all of the information they've given. Making a list of questions ahead of time will help you organize your thoughts and arrange all of the information you receive.
There isn't a set number of houses you should see before you decide. Visit as many as it takes to find the one you want. On average, homebuyers see 15 houses before choosing one. Just be sure to communicate often with your real estate agent about everything you're looking for. It will help avoid wasting your time.
An inspector checks the safety and condition of your potential new home. Home Inspectors focus especially on the structure, construction, and mechanical systems of the house and will make you aware of possible repairs that are needed. The Inspector does not evaluate whether or not you're getting good value for your money. Generally, an inspector checks for: the electrical system, plumbing and waste disposal, the water heater, insulation and Ventilation, the HVAC system, water source and quality, the potential presence of pests, the foundation, doors, windows, ceilings, walls, floors, and roof. Be sure to hire a home inspector that is qualified and experienced. Get references from other people who have used a home inspector.

It's a good idea to have the home inspection contingent on your written offer.  An inspection clause gives you an “out" on buying the house if serious problems are found or gives you the ability to renegotiate the purchase price if repairs are needed. Part of the home inspection clause can also specify that the seller must fix the problem(s) before you purchase the house.
It's not required, but it's a good idea. Following the inspection, the home inspector will be able to answer questions about the report and any problem areas. This is also an opportunity to hear an objective opinion on the home you'd like to purchase and it is a good time to ask general, maintenance questions.
If you are working with a real estate agent, they will assist you in making an offer, which will include the following information:

- Complete legal description of the property

- Amount of earnest money

- Down payment and financing details

- Proposed move-in date

- Price you are offering

- Proposed closing date

- Length of time the offer is valid

- Details of the deal

Remember that a sale commitment depends on negotiating a satisfactory contract with the seller, not just making an offer.
Listen to your real estate agent's advice, but follow your own instincts on deciding a fair price. Calculating your offer should involve several factors: what homes sell for in the area, the home's condition, how long it's been on the market, financing terms, and the seller's situation. By the time you're ready to make an offer, you should have a good idea of what the home is worth and what you can afford. And, be prepared for give-and-take negotiation, which is very common when buying a home. The buyer and seller may often go back and forth until they can agree on a price.
Earnest money is money put down to demonstrate your seriousness about buying a home. It must be substantial enough to demonstrate good faith and is usually between 1-5% of the purchase price (though the amount can vary with local customs and conditions). If your offer is accepted, the earnest money becomes part of your down payment or closing costs. If the offer is rejected, your money is returned to you. If you back out of a deal, you may forfeit the entire amount, depending on reasons.