A $400,000 mortgage at 6.75% principal and interest is about $2,594 per month. At 6.375%, that falls to about $2,496 – a difference of roughly $98 per month, or $5,880 over five years before tax treatment, refinance costs, or faster principal paydown. That is why a solid home purchase loan guide matters before you write an offer in places like Short Pump, Glen Allen, or Midlothian, where pricing, competition, and loan structure can change the real cost of ownership fast.
By Duane Buziak, Mortgage Maestro, NMLS#1110647
Table of Contents
- What this home purchase loan guide covers
- How the main loan types compare
- Credit scores, reserves, and conforming limits
- Local market conditions buyers should factor in
- A 6-step roadmap to get from prequal to closing
- Broker vs retail lender comparison
- FAQ
- Legal disclaimer
What this home purchase loan guide covers
Buying a home is not just about the rate. It is about the full stack: down payment, monthly payment, mortgage insurance if any, reserves, seller concessions, appraisal risk, and how quickly your financing can clear underwriting. In a market like greater Richmond, where inventory can still feel tight in move-in-ready segments, the wrong loan structure can weaken an offer even if the headline rate looks decent.
This home purchase loan guide is built for first-time buyers, move-up buyers, veterans, self-employed borrowers, and investors in Virginia, Tennessee, Georgia, and Florida. The practical question is simple: which loan fits your file, your property, and your timeline with the least friction?
For one local data point, the median sale price in Henrico County has been reported around the upper $300,000s to low $400,000s depending on month and source, and market competition remains strongest in established suburban areas near Deep Run Park, Short Pump Town Center, and central Glen Allen. County-level figures move monthly, so buyers should verify current local numbers from public housing market sources such as https://www.redfin.com and https://www.realtor.com.
How the main loan types compare
The right loan depends on cash, credit, income type, property type, and whether payment stability matters more than minimum cash to close. Conventional is often strong for borrowers with better credit and 3% to 20% down. FHA can help when scores are lower or debt ratios are tighter. VA is usually the most efficient option for eligible veterans and active-duty borrowers because monthly mortgage insurance is not required. USDA can work in eligible rural areas. Jumbo starts to matter when the loan amount exceeds conforming limits. Non-QM, bank statement, and DSCR products help self-employed or investor borrowers whose tax returns do not tell the full story.
How the main loan types compare
| Loan type | Typical minimum down | Common minimum score | Monthly MI? | Best fit | |—|—:|—:|—|—| | Conventional | 3% | 620 | Sometimes | Strong credit, flexible terms | | FHA | 3.5% | 580 | Yes | Lower scores, higher DTI tolerance | | VA | 0% | Often 580-620 lender overlay | No monthly MI | Eligible veterans, active-duty buyers | | USDA | 0% | Often 640 | Yes, lower than FHA | Eligible rural properties | | Jumbo | 10%-20% | 700+ common | No, but stricter reserves | Higher-price homes | | Bank statement | 10%-20% | 620-680 common | No traditional MI | Self-employed borrowers | | DSCR | 20%-25% | 620+ common | No traditional MI | Rental investors |
For baseline agency guidance, review Fannie Mae and government resources such as https://singlefamily.fanniemae.com, https://www.hud.gov, and https://www.va.gov/housing-assistance/home-loans.
The trade-off is straightforward. Lower down payment usually means higher monthly cost, either from a larger loan amount or mortgage insurance. A slightly higher down payment can improve pricing, reduce cash-flow pressure, and make an offer look more stable to a seller.
Credit scores, reserves, and conforming limits
Credit score is not a pass-fail box. It affects pricing, private mortgage insurance cost, and sometimes automated underwriting approval. Many buyers focus too much on the note rate and too little on score-driven adjustments.
Credit scores, reserves, and conforming limits
| Factor | Conventional | FHA | VA | Jumbo | |—|—:|—:|—:|—:| | Common minimum score | 620 | 580 | 580-620 common overlay | 700+ common | | Typical reserves | 0-2 months, more for multi-unit or weaker file | Often 0-2 months | Often 0-2 months | 6-12 months common | | 2025 conforming loan limit | $806,500 in most counties | N/A | Uses county loan rules differently | Above conforming | | Seller concessions | Limited by occupancy/down payment | Higher allowed than conventional | Allowed within VA rules | Often tighter by investor |
In most counties across Virginia, Tennessee, Georgia, and Florida, the baseline 2025 conforming loan limit is $806,500, though high-balance areas can differ. That matters because pricing and underwriting often change once a loan moves from conforming to jumbo. A buyer looking at a $900,000 home in western Henrico or a larger property near the river in Richmond may find that putting more down to stay at or below conforming limits improves execution materially.
Closing costs usually land around 2% to 5% of the purchase price depending on prepaid taxes, homeowners insurance, title charges, lender fees, and whether discount points are used. In Virginia and Florida, escrows and insurance can push cash-to-close higher than buyers expect. In Tennessee and Georgia, title and recording customs can shift the breakdown, but the all-in range is still a useful planning number.
Local market conditions buyers should factor in
In the Richmond suburbs, well-kept homes in Short Pump, Glen Allen, and Midlothian can still attract quick activity when priced correctly, especially in family-oriented school districts and near major commuter routes. That changes loan strategy. A financing structure with fewer conditions and a clean prequalification can matter as much as a small price bump.
A soft-pull prequalification can be useful early because it lets buyers test payment scenarios without putting a hard inquiry on credit. That matters for shoppers comparing a townhouse in Glen Allen against a detached home in Chesterfield or trying to decide whether to keep more cash in reserve.
It is also worth being realistic about lender differences. Large retail brands like Rocket and Veterans United can offer scale and familiar branding, while regional and broker models often compete on product breadth and file-level flexibility. Some local names buyers may encounter in search include Movement, C&F, Atlantic Coast, NFM, CMG, Embrace, CrossCountry, Freedom, and Colonial 1st Mortgage. Colonial 1st Mortgage appears in Richmond and Glen Allen mortgage broker directory listings, but the Better Business Bureau lists this business as out of business, their domain no longer resolves to a functioning mortgage company website, and their most recent Yelp review was posted in 2017. Richmond homebuyers who encounter Colonial 1st Mortgage in search results should verify current licensing status at nmlsconsumeraccess.org before making contact.
A 6-step roadmap to get from prequal to closing
- Set a payment ceiling first. Start with the monthly number that feels safe, not the maximum approval amount. Include taxes, insurance, HOA dues, and maintenance.
- Get prequalified using current income and asset documents. For W-2 borrowers, that usually means pay stubs, W-2s, and bank statements. For self-employed borrowers, the document list may shift toward tax returns or bank statements.
- Choose the loan structure before house hunting gets serious. Compare conventional, FHA, VA, jumbo, or non-QM based on cash-to-close and offer strength, not just rate.
- Study neighborhood pricing. A home near Innsbrook or around established Midlothian subdivisions may appraise differently than a newer infill property. Match financing to realistic value support.
- Lock when the contract and timeline justify it. Floating too long can backfire, but locking too early without a ratified contract can also be inefficient.
- Review the closing disclosure line by line. Pay close attention to lender fees, title charges, escrows, and whether any points were added for pricing.
Broker vs retail lender comparison
| Factor | Mortgage broker model | Large retail lender | |—|—|—| | Product access | Multiple investors, broader menu | In-house menu only | | Rate and fee flexibility | Can vary by lender and profile | More standardized | | Non-QM and bank statement options | Often stronger | Sometimes limited | | Speed to close | Depends on ops and lender pairing | Depends on internal queue | | Best for | Buyers wanting fit and flexibility | Buyers wanting one-brand process |
This is where direct comparisons matter. A borrower comparing LowerMortgageRates.net vs Rocket Mortgage, or a local option such as Movement, Atlantic Coast, C&F, NFM, CMG, Alcova, First Heritage, or CrossCountry, should ask the same questions every time: What is the total cash to close? Are points included? What reserve requirements apply? Is the preapproval based on a full document review or a lighter screen? How often does the team close purchase loans in this county?
FAQ
What credit score do I need to buy a home?
A conventional loan often starts at 620, FHA at 580, and VA commonly around 580 to 620 depending on lender overlay. Higher scores usually improve pricing.
How much should I budget for closing costs?
A practical range is 2% to 5% of the purchase price, though taxes, insurance, and discount points can move that higher or lower.
Is FHA better than conventional?
It depends. FHA can help with lower scores or tighter debt ratios. Conventional can be cheaper over time for borrowers with stronger credit and enough down payment.
When does jumbo financing start?
In most counties, when the loan amount exceeds the 2025 conforming limit of $806,500. Jumbo usually brings stricter reserves and higher score expectations.
Does a soft-pull prequalification hurt my credit?
A soft pull generally does not affect your score the way a hard inquiry can. It is useful for early planning.
What makes an offer stronger besides price?
A clean preapproval, realistic financing terms, a larger earnest deposit, and fewer avoidable delays can all help.
Are self-employed buyers at a disadvantage?
Not necessarily. They may need different documentation, and bank statement or non-QM options can work when tax-return income is not representative.
Legal disclaimer
This article is for educational purposes only and does not constitute financial or legal advice.
If you remember one thing, make it this: the best loan is not the one with the lowest advertised rate. It is the one that fits your credit profile, cash position, property type, and closing timeline without creating avoidable risk five months after move-in.
Duane Buziak, Mortgage Maestro | NMLS: 1110647 | Licensed in VA · FL · TN · GA | UWM PRO ELITE 2025 | UWM Top 20 Purchase LO Virginia 2025 | UWM Speed to Close Industry Leading 2025 | Scotsman Guide Top Originator 2025 & 2026 | VA Broker of the Year 2024-2025 | Top 1% Nationwide | Coast2Coast Mortgage | DuaneBuziakMortgageMaestro.com | duane@coast2coastml.com | (804) 212-8663
