Virginia first-time buyers often ask which single loan is the right one, and the honest answer is that it depends on three things: military status, credit score, and cash on hand. For buyers who qualify, VA financing usually comes out ahead. For everyone else, the real decision is between FHA and a 3% down conventional loan, and that comparison turns on mortgage insurance rather than the headline rate.
Duane Buziak, a mortgage broker licensed in VA, FL, TN, GA, DC, NC, SC, and MD, lays out seven strategies in the order he works through them with clients. The same sequence applies whether you are buying in Richmond, Tampa, Nashville, or Charlotte. Program rules are federal, while county loan limits and taxes vary.
By Duane Buziak, NMLS #1110647
1. Start With a Soft Pull Pre-Approval Using a NoTouch Credit Pull
A soft credit pull lets a broker see your credit profile without logging a hard inquiry on your report. A NoTouch Credit Pull uses that approach, so you can see which programs fit and what price range is realistic before any score-affecting activity happens. A hard inquiry is usually a small hit on its own, but the fear of it pushes many buyers to guess at their options instead of comparing them.
Suppose a buyer has a 660 score, steady W-2 income, and $15,000 saved. A no hard inquiry mortgage pre-approval shows FHA at 3.5% down and a 3% down conventional loan side by side, with payments for each. The score does not move, and the buyer leaves knowing which program to pursue.
To put it into practice:
- Request a Free NoTouch Credit PreQual from a soft pull mortgage broker.
- Provide income, employment, and asset basics.
- Review the program options and price ranges shown for your profile.
- Keep the pre-approval letter ready for offers, and ask when a full credit review will be needed.
The common mistake is letting several companies run hard pulls in different weeks before you understand program fit. The CFPB notes that mortgage inquiries made within a short window are typically treated as a single inquiry for scoring, but the window depends on the scoring model. Do not count on it to rescue a scattered approach. A hard pull is still required before closing, so the soft pull is for choosing the path, not skipping a step.
Measure two things: the number of hard inquiries on your credit report, which should stay at zero until you choose a program, and the time from application to a usable pre-approval letter. A mortgage pre-approval without hard pull that arrives the same day lets you start touring homes immediately.
2. Use Your VA Entitlement First If You Have Military Service
VA-backed loans let eligible veterans, service members, and some surviving spouses buy with no down payment and no monthly mortgage insurance. The VA guarantee lowers risk for the broker’s funding source, and that shows up in pricing. The trade-off is a one-time funding fee, which for first use with no down payment is 2.15% of the loan as of 2026 (VA.gov lists the tiers). Veterans with a service-connected disability rating are generally exempt.
Here is an illustration at a $400,000 purchase price and a 6.50% rate on both loans:
- VA, $0 down: the $8,600 funding fee is financed, so the loan is $408,600. Principal and interest is $2,582.63, with no monthly mortgage insurance.
- Conventional, 5% down: the $20,000 down payment leaves a $380,000 loan. Principal and interest is $2,401.86. PMI at an assumed 0.60% annual rate adds $190.00, for $2,591.86.
The monthly totals are within about $9 of each other, but the VA buyer needs $20,000 less at closing. A buyer with a 740 score might see lower PMI, which is why you run both with real numbers.
To put it into practice, request your Certificate of Eligibility through VA.gov or ask your broker to pull it. Then compare VA against conventional at the same price and rate.
Two mistakes show up often. Some buyers dismiss VA because the funding fee looks large, even though it can be financed and the no-PMI structure often offsets it. Others assume VA only suits a second home, when it is built for primary residences. Measure the total monthly payment and cash to close against the next-strongest program.
3. Consider FHA When Credit or Savings Are Thin
FHA loans are insured by the Federal Housing Administration and allow 3.5% down with a score of 580 or higher. Buyers with scores from 500 to 579 can sometimes qualify with 10% down. Flexible credit standards are the draw, and mortgage insurance premium (MIP) is the cost. MIP has two parts: an upfront premium of 1.75% of the base loan, usually financed, and an annual premium paid monthly.
Worked example, at an assumed 6.50% rate on a $350,000 home:
- Down payment at 3.5%: $12,250, leaving a base loan of $337,750.
- Upfront MIP at 1.75%: $5,910.63, financed, for a total loan of $343,660.63.
- Principal and interest: $2,172.17.
- Annual MIP at 0.55% of the base loan: $1,857.63 per year, or about $154.80 per month in year one.
- Payment including MIP: about $2,326.97, before taxes and homeowners insurance.
The annual MIP rate shown applies to standard 30-year terms with under 5% down. Confirm current rates on HUD.gov before you budget.
The pitfall is duration. With less than 10% down, annual MIP generally lasts the life of the loan, unlike conventional PMI. The usual exit is a refinance once your equity is high enough for a conventional loan without mortgage insurance.
In practice, check the county loan limit using HUD’s FHA limit lookup, since Northern Virginia limits differ from the rest of the state. Get an FHA quote, then model a refinance at roughly 20% equity. Measure the full monthly payment including MIP and the equity level at which refinancing starts to pay off.
4. Compare Conventional Low-Down-Payment Options Against FHA
A common misconception is that 20% down is required for a conventional loan. Programs like Fannie Mae’s HomeReady allow 3% down, with income limits tied to area median income and education requirements for some buyers. The edge over FHA is that private mortgage insurance (PMI) is cancelable. You can request removal at 80% loan-to-value, and it ends automatically at 78% (see the CFPB’s PMI explainer).
The tricky part is pricing. Conventional loans carry loan-level price adjustments (LLPAs), which are fees based on credit score and down payment that get built into the rate or cost. A 680 score with 3% down is priced differently than a 760 score. FHA pricing does not vary as sharply by score, so weaker credit often favors FHA and stronger credit favors conventional.
| Program | Minimum down payment | Typical minimum score | Upfront cost | Ongoing mortgage insurance | Can insurance end? | Strongest-fit profile |
|---|---|---|---|---|---|---|
| FHA | 3.5% | 580 (500 with 10% down) | 1.75% upfront MIP | Annual MIP | Life of loan under 10% down; refinance to exit | Lower scores, limited savings |
| VA | 0% | Set by broker’s funding source, often 580 to 620 | Funding fee, typically 2.15% first use with $0 down | None | Not applicable | Eligible veterans and service members |
| Conventional, 3% down | 3% | 620 or higher | LLPAs priced into rate | PMI, based on score | Yes, at 80% loan-to-value on request | Mid to strong credit, steady income |
Score minimums vary by broker’s funding source and can be higher than program floors. For conforming limits, see FHFA.
To put it into practice, run both scenarios at the same price with your actual score, then check HomeReady eligibility. The mistake is comparing rates alone. A conventional rate that looks 0.25% higher can still produce a lower payment once MI is included. Measure payment with MI and total cost over an expected seven-year hold.
5. Stress-Test Your Payment With a Three-Rate Scenario Table
Rates can move between your pre-approval and your lock, and a payment that fits at one rate can strain you at another. Modeling three rates gives you a ceiling before you fall for a house. Take a $350,000 loan on a 30-year fixed term:
| Rate | Monthly principal and interest | Total interest over 30 years | With $550 taxes and insurance | Share of $8,500 gross monthly income |
|---|---|---|---|---|
| 6.50% | $2,212.24 | $446,406 | $2,762.24 | 32.5% |
| 6.75% | $2,270.09 | $467,232 | $2,820.09 | 33.2% |
| 7.00% | $2,328.56 | $488,282 | $2,878.56 | 33.9% |
The $550 for taxes and insurance and the $8,500 income are assumptions for illustration. Moving from 6.50% to 7.00% adds $116.32 a month and more than $41,000 in lifetime interest. Real tax and insurance figures vary by county and property, so use quotes for your target area. These are illustrations, not rate quotes.
To put it into practice:
- Calculate principal and interest at three rates spaced 0.25% apart.
- Add estimated property taxes, homeowners insurance, and mortgage insurance from Strategies 2 through 4.
- Divide each total by gross monthly income.
- Set your purchase ceiling using the highest-rate scenario.
The common mistake is budgeting to the lowest quoted rate and leaving out taxes and insurance, which can add several hundred dollars a month. Measure the payment as a share of gross monthly income at the highest scenario. If that number makes you uncomfortable, lower the price target now, not after you are under contract.
6. Decide on Discount Points With a Breakeven Calculation
A discount point is an upfront fee equal to 1% of the loan amount that can lower your rate. Whether it pays off depends on how long you keep the loan, and breakeven is the month when cumulative savings equal what you paid.
Worked example on a $350,000 loan:
- One point costs $3,500.
- Assume it lowers the rate from 6.75% to 6.50%, which drops principal and interest from $2,270.09 to $2,212.24, a saving of $57.85 a month.
- Breakeven: $3,500 divided by $57.85 is 60.5 months, so savings begin in month 61.
At seven years, cumulative savings are about $4,859, for a net gain of roughly $1,359. At ten years, savings reach about $6,942, for a net of $3,442. If you sell or refinance at year three, the same point costs you about $1,418 net. The 0.25% reduction is an assumption, and actual pricing varies by day and program.
In practice, ask for quotes with and without points on the same loan, divide the cost by the monthly savings, and compare the result to how long you expect to stay. First-time buyers with limited cash may find that money is better spent on a larger down payment or reserves.
The classic mistake is buying points and then moving or refinancing before breakeven. Rates that fall after you close make this more likely. Measure the breakeven month against the years you realistically plan to own the home, and treat any gap under three years as a reason to skip points.
7. Shop Through a Broker With Access to Hundreds of Wholesale Lenders
A single retail company can only offer its own products and pricing. A broker like Duane Buziak submits one application to hundreds of wholesale lenders and compares the results, which is why rates and fees can differ for the same borrower. Brokers are paid through disclosed compensation, and the Loan Estimate shows it.
The Dare to Compare exercise puts this to the test. On the same day, request Loan Estimates from Duane Buziak and from one single-company retail option, using identical assumptions. Then line them up:
- Interest rate and APR
- Discount points or credits
- Origination and third-party fees (Section A through C of the Loan Estimate)
- Lock period
- Estimated monthly payment including mortgage insurance
- Cash to close
The CFPB’s Loan Estimate guide explains each section. Because soft credit pull pre-approvals do not add inquiries, you can gather the first round of comparisons without a score penalty.
The mistake that ruins most comparisons is mismatched terms: one quote with points and one without, FHA against conventional, or a 30-day lock against a 60-day lock. Fix loan type, price, down payment, points, and lock period before asking anyone to quote.
Measure the rate and total fees at identical terms, and ask each party for their estimated days to closing. Speed matters for offers: sellers in competitive Virginia markets often weigh a fast, reliable close as heavily as a slightly higher price. Duane Buziak also works with realtor referrals and supports buyers in VA, FL, TN, GA, DC, NC, and SC, plus MD.
Questions Virginia First-Time Buyers Ask Most
What is the right mortgage option for a first-time buyer in Virginia?
For eligible veterans and service members, a VA loan is usually the strongest fit because it needs no down payment and no monthly mortgage insurance. Everyone else should compare FHA and 3% down conventional, using payment including mortgage insurance.
Does getting pre-approved hurt my credit?
Not if it starts with a soft pull. A NoTouch Credit Pull shows your options without a hard inquiry. A hard credit check is required before closing once you choose a program.
Do I need 20% down to buy a home?
No. FHA allows 3.5% down, conventional programs allow 3%, and VA allows 0% for eligible buyers. Less than 20% down on a conventional loan means paying PMI.
Is FHA always costlier than conventional?
No. FHA can produce a lower payment for borrowers with scores under roughly 700, because conventional PMI and LLPAs rise as scores fall. Stronger credit usually favors conventional.
Can first-time buyers use VA loans?
Yes, and VA is not limited to first-time buyers. Eligibility comes from service history, and you can confirm it by requesting a Certificate of Eligibility through VA.gov.
What credit score do I need?
FHA generally starts at 580 for 3.5% down, and conventional programs typically start near 620. Individual funding sources may set higher minimums, so a soft pull pre-approval shows where you land.
How is a broker different from going to a single company?
A broker compares hundreds of wholesale lenders on one application, while a single company offers only its own shelf. Comparing Loan Estimates at identical terms shows the difference in your own numbers.
Which states does Duane Buziak serve?
Duane Buziak is licensed in Virginia, Florida, Tennessee, Georgia, Washington DC, North Carolina, South Carolina, and Maryland. You can verify his license on NMLS Consumer Access under NMLS #1110647.
Your Decision Order: NoTouch First, Then VA, Then FHA Against Conventional
Begin with the NoTouch Credit Pull so you know your options before any hard inquiry happens. If you have military service, test VA first. If not, compare FHA and 3% down conventional using the three-rate table and the breakeven math, then ask for a broker comparison at identical terms.
Ready to secure your dream home with a mortgage expert who knows your market? Get your free NoTouch Credit PreQual today and discover your buying power without impacting your credit score. Then see why homebuyers choose Powerhouse Mortgages by Duane Buziak for faster close times and access to hundreds of wholesale lenders working for you.
