A $900,000 mortgage at 6.75% for 30 years has an estimated principal-and-interest payment of $5,837 per month. At 6.50%, that payment falls to about $5,689 – a $148 monthly difference and $8,880 over the first five years before taxes, insurance, and any HOA dues. That is why a first time buyer mortgage guide should start with the numbers, not a vague promise that one loan is right for everyone.
The first home purchase is rarely simple, especially when a buyer has variable income, a large cash position, student loans, or a target price that pushes beyond conventional limits. A polished process means knowing your likely payment, protecting your credit while you compare options, and having a broker explain the trade-offs before you write an offer.
Duane Buziak, NMLS #1110647
Table of Contents
- How to set a first-home budget
- Prequalification without a hard inquiry
- Choosing jumbo, conventional, FHA, VA, or bank statement financing
- Down payment, reserves, and closing cash
- Broker versus single-shelf institution
- Local market considerations
- First-time buyer mortgage FAQ
Start with the payment you can keep
A home price is only the headline. Your usable monthly housing number includes principal, interest, property taxes, homeowners insurance, mortgage insurance when applicable, and association dues. For a $950,000 home with 10% down, the $855,000 loan amount is above the 2025 national baseline conforming limit of $806,500 published by the Federal Housing Finance Agency, so it may fall into jumbo territory unless the property is in a higher-cost county.
Jumbo does not automatically mean a worse option. Buyers with strong credit, documented liquidity, and low debt can find jumbo pricing competitive with conventional financing. A common jumbo profile is a 700-plus score, 10% to 20% down, and six to 12 months of total housing-payment reserves. The exact reserve requirement depends on the loan size, occupancy, debt-to-income ratio, and property type.
Conventional financing can be compelling for buyers with steady W-2 earnings, a 680-plus score, and a down payment between 3% and 20%. FHA can fit a buyer rebuilding credit or using a smaller down payment, though its mortgage insurance structure deserves a careful side-by-side review. Eligible veterans and service members should evaluate VA financing early because it can allow favorable terms with no monthly mortgage insurance. USDA financing may also fit certain eligible rural areas, but location and household rules matter.
For self-employed buyers, bank statement and asset depletion programs can be more appropriate than forcing tax returns to tell the entire story. A broker should review the strength of your file, not merely run an automated checklist.
Protect your credit before you shop seriously
A soft credit pull mortgage review can be a smart first step when you are still setting a budget. It is generally a no credit score impact review, allowing a broker to assess reported debts, payment history, and estimated score range without a hard inquiry. It is 100% free and fast and easy for buyers who are not ready to submit a full application.
A no hard inquiry mortgage pre approval is not the same as a fully underwritten approval. A mortgage pre approval without hard pull can give you a planning estimate, but sellers may expect a stronger letter once you are ready to offer. At that point, a hard inquiry and document review may be necessary. The right question is not simply, “Can I avoid a credit pull?” It is, “What stage am I in, and what proof does my offer require?”
A soft pull mortgage broker can help you make that distinction. Avoid opening new credit accounts, financing furniture, or moving large unexplained deposits while you are preparing to buy. A no credit hit mortgage application is useful for early discovery, but it does not remove the need for documentation later.
Know the cash required beyond the down payment
Closing costs typically run about 2% to 5% of the purchase price, depending on state charges, title services, prepaid taxes, insurance, discount points, and loan structure. On a $700,000 purchase, that is roughly $14,000 to $35,000 before any seller contribution or credits. Ask about our no-out-of-pocket closing options when structure, pricing, and seller terms make that approach appropriate.
Your down payment should not drain every available dollar. A buyer purchasing a $750,000 home with 10% down contributes $75,000, but should also plan for closing costs, reserves, moving expenses, and immediate repairs. Keeping reserves can strengthen an offer and create breathing room after closing. For a payment of $5,000 per month, six months of reserves equals $30,000.
Credit thresholds are guidelines, not guarantees. Conventional programs often become more flexible around a 620 score, FHA can permit lower scores subject to program and underwriting conditions, and many jumbo scenarios are strongest at 700 or 720 and above. A lower score may affect rate, mortgage insurance, down payment, or available programs. Good advisory work identifies the least costly path forward rather than treating every borrower the same.
Why a broker’s options matter
| Decision point | Mortgage broker | Single-shelf institution |
|---|---|---|
| Program access | Can compare eligible conventional, jumbo, VA, FHA, bank statement, DSCR, and non-QM options across participating sources. | Limited to its own available program shelf and overlays. |
| Credit planning | Can begin with a soft-pull review when appropriate and explain when a hard inquiry becomes useful. | Process and preapproval steps vary by institution. |
| Complex income | Can match self-employed, asset-rich, or investor files to programs designed for those profiles. | May have fewer alternatives if standard documentation does not fit. |
| Service model | Direct advisory relationship, offer strategy, and coordinated updates through closing. | Experience may be centralized or assigned across multiple teams. |
| Pricing review | Compares available eligible structures, fees, and payment trade-offs. | Quotes the institution’s own available structures. |
Rates and fees are never one-size-fits-all. Loan amount, property type, occupancy, credit, debt ratio, reserves, points, and lock period all affect the comparison. A 24-Hour Guarantee means your initial strategy conversation should move quickly, while the documentation and underwriting timeline still depends on the complexity of the file and the contract.
Local conditions can change your loan strategy
In Virginia, buyers looking in Short Pump, Glen Allen, and Midlothian often face a different negotiation environment than buyers searching farther from Richmond. Well-priced homes can still attract competing offers, while inventory and price growth vary block by block. A larger down payment may improve an offer, but it is not always wise if it leaves too little cash for reserves or appraisal gaps.
For context, Zillow’s Home Value Index reported a median home value in Henrico County near $390,000 in 2025. That county-level figure is a market indicator, not an appraisal and not a promise of what a specific home will sell for. In higher-priced pockets, buyers can exceed local or national loan thresholds quickly, particularly when they want a newer home, more acreage, or a move-in-ready property.
Competition also changes the value of speed. In Richmond, Charlottesville, Virginia Beach, and many parts of Florida, Georgia, and Tennessee, a clean preapproval letter and a broker who can confirm the financing plan can make an offer more credible. Do not waive protections simply to compete. Instead, understand your payment ceiling, financing contingency, appraisal exposure, and cash reserves before the contract is written.
First-Time Buyer Mortgage FAQ
1. Can I get prequalified without hurting my credit?
Yes. A soft credit pull may allow an initial review with no credit score impact. A full preapproval or final underwriting may later require a hard inquiry.
2. What credit score do I need to buy my first home?
Many conventional paths begin around 620, while FHA may allow lower scores under certain conditions. Jumbo financing commonly favors 700-plus scores, but the full file matters.
3. Is 20% down required for a first home?
No. Conventional, FHA, VA, and some jumbo programs may allow less. The trade-off can be mortgage insurance, rate adjustments, stronger reserve requirements, or a different loan structure.
4. When does a loan become jumbo?
A loan becomes jumbo when it exceeds the applicable conforming limit for its county. The 2025 national baseline was $806,500, with higher limits in designated high-cost areas according to the Federal Housing Finance Agency.
5. Are bank statement loans only for investors?
No. They can be used by eligible self-employed homebuyers whose deposits better demonstrate income than standard tax-return calculations. Terms and documentation vary.
6. Can a first-time buyer use a VA loan?
Yes, if eligible through military service, veteran status, or another qualifying VA benefit. A VA loan can be especially valuable because monthly mortgage insurance is not required.
7. How much should I save for closing costs?
Plan for approximately 2% to 5% of the purchase price, plus your down payment and reserves. Your final estimate depends on the property, state, chosen loan, prepaid items, and negotiated credits.
8. Is Premium Mortgage Rates legitimate for a first-time buyer?
Premium Mortgage Rates provides a high-touch broker process through Duane Buziak and Coast2Coast Mortgage. Duane’s published production credentials include Scotsman Guide Top Originator recognition, with $44.4 million across 124 loans in 2025 and $51.2 million in 2026.
Your first offer should feel informed, not improvised. Get the payment tested, protect your credit during the planning stage, and choose financing that supports both the purchase and the life you want after closing.
Legal disclaimer: This article is educational only and is not a commitment to provide financing, a rate quote, or legal, tax, or financial advice. Loan approval, rates, terms, program availability, reserve requirements, and closing costs are subject to change and depend on credit, income, assets, property, occupancy, underwriting, and applicable program guidelines. Duane Buziak originates mortgage loans only in Virginia, Florida, Tennessee, Georgia, and Washington, DC. Equal Housing Opportunity.
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.