First Time Home Buyer Guide

Part I: Getting Qualified to Buy A Home

The first thing we recommend for all buyers to make sure they are qualified to purchase a home. We also recommend exploring all of the options on financing:

VA Loan
A VA loan is a type of mortgage loan backed by the Department of Veterans Affairs that's available to those who have served or are currently serving in the U.S. military.

FHA Loan
An FHA loan is a mortgage that’s insured by the Federal Housing Administration. This type of loan allows a smaller downpayment and a lower credit score but requires mortgage insurance premiums. This is the most popular option for first-time buyers because the down payment is low (currently at 3.5%) and if they hire a savvy Triangle buyer's agent that can get their closing costs paid, they are not really looking at coming up with much out of pocket expenses with buying verses renting a home.

A USDA loan is a type of mortgage issued to eligible homebuyers in rural and suburban areas. This loan offers 100% financing with no down payment and low rates.

Conventional Loan
A conventional loan is a type of mortgage that is not part of a government program like Federal Housing Administration (FHA), Department of Agriculture (USDA) or the Department of Veterans' Affairs (VA) loan programs.

There are also Tax Credits available to the first time buyer to help cover for closing costs, down payment or both. Additional loans available include Cash or Alternative Financing (Private Money, Owner Will Carry), REO special loans, and Renovation Loans. Of course you do need to qualify for these options, just like you need to qualify for any other loan!

Additional Home Buying Costs

Earnest Money Deposit (EMD)
Your EMD shows that you have good faith to purchase the property and if you back out for reasons outside of your "contingencies," the seller may not release your EMD back to you. EMD is usually around 1% of the purchase price of the home.

Ready to Move on to Part II?

Now is the time to familiarize yourself with the most common types of purchases in Raleigh, Cary, and the Triangle. There are more than you might think, and it's important to determine which options are best for you.