Financing Basics for Virginia Homebuyers

Pre-qualification vs. pre-approval

Pre-qualification is a quick, informal estimate based on numbers you self-report. Pre-approval means a lender has actually verified your income, credit, and assets and will issue a conditional commitment letter. In this market, sellers and listing agents expect a pre-approval letter attached to a serious offer, not just a pre-qualification.

The main loan types

Conventional loans typically require stronger credit and a down payment starting around 3 to 5 percent, with private mortgage insurance (PMI) required below 20 percent down. FHA loans allow lower credit scores and down payments as low as 3.5 percent, but carry mortgage insurance for the life of the loan in most cases. VA loans are available to eligible veterans, active-duty service members, and some surviving spouses, and can offer zero down payment and no monthly mortgage insurance, which matters a lot in a region with as many military and veteran households as ours.

Budget beyond the down payment

Closing costs typically run 2 to 5 percent of the purchase price on top of your down payment, covering things like lender fees, title insurance, recording fees, and prepaid taxes and insurance. You’ll also need earnest money at contract, usually held in escrow and applied toward your purchase at closing.

This is general information, not financial or legal advice. Loan programs, rates, and requirements change, so confirm current details with a licensed lender before making decisions.