Best Virginia Mortgage Lenders for First-Time Homebuyers

Your first time trying to finance a house might seem scary, but lenders can offer guidance, competitive rates and a path to the front door of your dreams. Explore Virginia mortgage lenders for first-time homebuyers; these lenders can make your first home purchase a smooth transaction in the Old Dominion.

Quick Look: Best Mortgage Lenders for First-Time Homebuyers in Virginia

• Best for Digital Convenience: Rocket Mortgage
• Best for Underserved Borrowers: Angel Oak Mortgage Solutions
• Best for First-Time Homebuyers: CrossCountry Mortgage
• Best for Jumbo Loans: LoanDepot
• Best for Rate Comparison: Credible Mortgage
• Best for Military Borrowers: Veterans United

6 Best First-Time Homebuyer Loans in Virginia

Purchasing your first home in Virginia doesn't have to be overwhelming or stressful. These loan programs are specifically designed to assist first-time homebuyers in achieving their dream of homeownership.

1. Best for Digital Convenience: Rocket Mortgage

Rocket Mortgage, by Quicken Loans, has revolutionized the mortgage industry with its digital solutions. It’s known for providing a fast, user-friendly experience. It offers a variety of loans designed to meet different financing needs. Applicants typically need a credit score of 620 or higher, sufficient income and a down payment (which varies by loan type).

• Loan types offered: Conventional, fixed-rate and adjustable-rate mortgages, government and jumbo loans
• Credit score requirement: Ranges from 580 (FHA loans) to 700 (jumbo loans), depending on the loan type
• Average days to close a loan: 30-45 days
• States served: All 50 states and the District of Columbia

2. Best for Underserved Borrowers: Angel Oak Mortgage Solutions

Angel Oak Mortgage Solutions is a leading non-qualified mortgage (QM) lender providing innovative mortgage solutions for brokers and correspondents nationwide. It specializes in offering loan products for consumers whose circumstances may not meet standard government agency-sponsored financing guidelines, mainly serving self-employed individuals, real estate investors and those with unique financial situations.

• Loan types offered: Bank statement loans, closed-end second mortgages, 1099-income loans and more
• Credit score requirement: Varies by loan product, starting from 640
• Average days to close a loan: Varies with the program, with Debt Service Coverage Ratio (DSCR) loans closing in as little as 6 days
• States served: 47 states, including Washington, D.C. but not Alaska, Massachusetts, New York or Vermont

3. Best for First-Time Homebuyers: CrossCountry Mortgage

CrossCountry Mortgage is a full-service nationwide lender that offers an extensive range of loan products. The company's various loan options and programs make homebuying more accessible, especially for first-time homebuyers.

• Loan types offered: Conventional loans, jumbo loans, government loans (FHA, VA and USDA), home equity Loans and more
• Credit score requirement: 620 for most loans, 660 for jumbo loans and 500 for FHA loans
• Average days to close a loan: 21 days
• States served: All 50 states

4. Best for Jumbo Loans: LoanDepot

LoanDepot is the second-largest non-bank lender in the country, offering a blend of digital and personal services across its 200+ locations nationwide. It is known for its customer-centric approach and innovative technology platform, mello®.

• Loan types offered: Conventional loans, jumbo loans, government loans (FHA, VA), Home equity loans and more
• Credit score requirement: Ranges from 500 (FHA loans) to 700 (jumbo loans)
• Average days to close a loan: 30 to 60 days
• States served: All 50 states plus Washington, D.C.

5. Best for Rate Comparison: Credible Mortgage

Credible Mortgage is a marketplace that connects borrowers with top lenders to help them find the best rates for their mortgage needs. Founded in 2012, Credible’s mission is to simplify the mortgage process, providing a user-friendly platform for borrowers to compare rates, apply and close loans efficiently.

• Loan types offered: Conventional loans, jumbo loans, FHA loans, VA loans and USDA loans
• Credit score requirement: Varies by loan type and lender, but generally ranges from 620 to 700
• Average days to close a loan: 30-45 days
• State served: Available in most of the 50 states except Montana, New York and Rhode Island

6. Best for Military Borrowers: Veterans United

Veterans United is a leading provider of VA loans in the United States, dedicated to serving veterans and military families in their pursuit of homeownership. Established with the goal of enhancing lives through lending, Veterans United has helped veterans and service members achieve the dream of owning a home.

• Loan types offered: VA, FHA, USDA, jumbo and conventional loans
• Credit score requirement: Typically 600, but can vary depending on loan type
• Average days to close a loan: 40-50 days
• State served: All 50 states

The Housing Market in Virginia: An Overview

The Virginia housing market is diverse, with a mix of urban and rural areas influencing prices. Northern Virginia, near Washington D.C., typically has higher prices because of its proximity to the capital and economic opportunities. In contrast, more affordable housing can be found in the southern and rural parts of the state. The market has experienced fluctuations, with recent trends showing a competitive market with rising prices.

Total households: 3,380,607

Median list price: $370,000 

3 most expensive cities in Virginia to buy a house (by median price):

• Great Falls: $1,514,090
• McLean: $1,284,106
• Upperville: $1,199,919 

3 most affordable cities in Virginia to buy a house  (by median price):

• Danville: $137,067
• Richlands: $100,563
• Martinsville: $110,000

Preparing for a Mortgage

Preparing for a mortgage as a first-time homebuyer involves several key steps. Here’s a guide to help you through the process:

Check Your Credit Score

Start by knowing your credit score because it affects your loan eligibility and interest rates. Use free services like Intuit, Credit Karma or Experian to access your credit scores from major bureaus without harming your credit. 

Save for a Down Payment

The larger your down payment, the less you’ll need to finance. Save for it by setting a budget, cutting expenses and exploring down payment assistance programs. Consider opening a dedicated savings account where you can automatically deposit a portion of your income.

Research the Market

Understand local real estate trends, property values and neighborhood characteristics. Zillow or Roofstock can help you analyze market data and identify areas that fit your preferences and budget.

Gather Your Paperwork

W-2 forms, pay stubs and bank statements are some of the documents you'll need to apply for a mortgage. Organize them early to streamline the application process.

Get a Purchase Quote

A purchase quote gives you an estimate of the mortgage amount, interest rate and monthly payments you might expect. You can request quotes from multiple lenders to compare rates and terms. It’s also wise to get pre-approved for a mortgage to know exactly how much you can borrow.

Start Shopping

With your finances in order, start shopping for a home within your budget. Work with a real estate agent to find properties that meet your criteria and arrange viewings. Consider the location, size and condition of the home, as well as future resale potential.

Mortgage Options

Mortgage options for first-time homebuyers include.

Conventional Loans

Conventional loans are not insured by any government agency and are the most common type of mortgage. First-time homebuyers with good credit scores (typically 620 or higher) and a down payment of at least 3% may consider this option. 

FHA Loans

FHA loans are insured by the Federal Housing Administration and are popular with first-time buyers due to lower minimum credit score requirements (as low as 500 with 10% down or 580 with 3.5% down) and the possibility of a lower down payment. 

USDA Loans

USDA loans are backed by the United States Department of Agriculture and are aimed at rural homebuyers. They offer no down payment options for those who meet income eligibility (cannot exceed 115% of median household income) and are purchasing in eligible rural areas.

VA Loans

VA loans are available to veterans, active-duty service members and some surviving spouses. They offer benefits like no down payment, no private mortgage insurance and competitive interest rates. Eligibility includes sufficient credit, income and a valid Certificate of Eligibility (COE).

Jumbo Loans

Jumbo loans are for property values that exceed the conforming loan limits set by the Federal Housing Finance Agency. They are suitable for high-cost areas and luxury homes. Borrowers typically need excellent credit, significant savings and a down payment of 10-20%.

First-Time Homebuyer Programs in Virginia

As a first-time homebuyer in Virginia, you have access to several programs designed to provide financial assistance, guidance and support throughout the home-buying process.

Down Payment Assistance Grant

This program is a true grant (meaning it doesn't have to be repaid) that provides financial assistance to first-time homebuyers for down payment and closing costs. Eligible buyers must meet certain income limits and purchase a home within the sales price limits set by Virginia Housing.

Fannie Mae HFA Preferred

This mortgage option is offered through participating Housing Finance Agencies (HFAs) for low- to moderate-income borrowers. It allows a loan-to-value ratio of up to 97% with no first-time homebuyer requirement and reduced mortgage insurance for loans at or below 80% of Area Median Income (AMI). The HFA sets the borrower's income limits.

Granting Freedom

Specifically for service-disabled veterans, Granting Freedom provides funds to make homes and rental units accessible. It offers up to $8,000 for modifications like ramps, chairlifts and alterations to bathrooms and kitchens. The grant is available on a first-come, first-served basis for veterans with a service-connected disability.

Mortgage Credit Certificate

The MCC program allows first-time homebuyers to claim a federal tax credit for a portion of the mortgage interest paid each year, which can result in significant tax savings. However, as of May 1, 2023, Virginia Housing’s MCC program is suspended.

Current Mortgage Rates in Virginia

As of April 21, 2024, the current mortgage rates in Virginia are as follows:

Rates are based on an average home price of $285,229 and a down payment of 20%.

See more mortgage rates on Zillow

Closing a Mortgage

When closing on a mortgage or settlement, the final step in buying a home is securing financing. Here's what usually happens during this stage.

• Reviewing documents: Before closing day, you'll get a Closing Disclosure from your lender at least three days prior. It outlines your loan details, monthly payments, closing costs and cash needed at closing.
• Final property check: You might do a final walkthrough of the property to ensure everything is as expected.
• Signing papers: On closing day, you and others involved sign the necessary documents, including the mortgage note and deed of trust.
• Paying closing costs: Any closing costs not included in the loan, such as origination fees and title insurance, must be paid.
• Funds transfer: Your lender disburses funds to the seller and the remaining closing costs are settled.
• Ownership transfer: The closing agent records documents with the local government to transfer legal ownership to you.
• Getting keys: Once all is done, you receive the keys to your new home.

The entire process usually takes 30 to 45 days from applying for the mortgage to closing. Signing documents on closing day typically takes 1 to 2 hours, assuming no issues arise.

Buying Your First Home in Virginia

As a first-time prospective homeowner in Virginia, you have a top selection of mortgage lenders to explore. From Rocket Mortgage's digital convenience to Angel Oak Mortgage's specialized solutions, finding the right fit for your needs is within reach. Take advantage of the programs and resources available and, soon, you'll be stepping through the door of your own home.

Frequently Asked Questions