Conventional Loan Guide for First-Time Buyers in Virginia

Conventional Loan

Conventional Loan Guide for First-Time Buyers in Virginia

Reviewed by the HomeMath editorial team Updated 2026-08-06

Key takeaways

Minimum credit score for most conventional loans: about 620
Down payment can be as low as 3% with private mortgage insurance (PMI)
Lenders usually cap total debt‑to‑income ratio around 45%
PMI is required when the down payment is under 20% of the purchase price
Closing costs in Virginia typically run 2%–5% of the home price

Conventional loans are private‑sector mortgages that aren’t guaranteed by the government. They are a common choice for first‑time homebuyers because they offer flexible terms and can be paired with state assistance programs.

Eligibility Basics

To qualify, lenders look at three main factors: credit score, down payment, and debt‑to‑income (DTI) ratio. A score of around 620 is often the lowest accepted, though a higher score can secure better interest rates. The down payment can range from 3% to 20% of the home’s price. If you put down less than 20%, you’ll need private mortgage insurance (PMI) to protect the lender.

Why Credit Scores Matter

Credit scores reflect how reliably you’ve repaid debt in the past. Lenders use them to gauge risk; a higher score suggests lower risk, which can translate into lower fees and a lower PMI rate. Improving your score before applying—by paying down balances and correcting errors—can save you money over the life of the loan.

Debt‑to‑Income Ratio

The DTI ratio compares your monthly debt payments to your gross monthly income. Most conventional loan programs cap the total DTI at about 45%. Keeping this ratio low shows lenders you have enough income left over to handle a mortgage payment.

Down Payment and Private Mortgage Insurance

When you put down less than 20%, the lender will require PMI. This insurance protects the lender if you default, and the cost is added to your monthly payment. Once you reach 20% equity—through paying down the loan or home appreciation—you can request to cancel PMI, which reduces your monthly expense.

Virginia‑Specific Closing Process

Virginia traditionally uses attorney‑led closings rather than title‑company closings common in many other states. Your attorney will review the deed, title report, and loan documents, ensuring everything complies with state law before you sign. Additionally, Virginia offers first‑time‑buyer assistance programs through the Virginia Housing Development Authority (VHDA) that can provide down‑payment grants or favorable loan terms, and these programs can be combined with a conventional loan.

Typical Closing Costs

Closing costs cover fees such as lender origination, appraisal, title search, attorney fees, and recording fees. In Virginia, these costs usually total 2%–5% of the home’s purchase price. Shopping around for service providers and asking the seller to contribute can help lower your out‑of‑pocket amount.

Tips for First‑Time Buyers

Get a copy of your credit report early and dispute any errors.
Save for a down payment and an additional 2%–5% for closing costs.
Consider a pre‑approval to strengthen your offer.
Explore VHDA assistance programs that may reduce the amount you need to bring to the table.
Work with a real‑estate agent familiar with Virginia’s attorney‑closing process.

This article provides general information and should not be considered personalized financial advice. Consult a qualified mortgage professional or financial advisor for guidance specific to your situation.

FAQ

Do I need a mortgage broker to get a conventional loan?

A broker can help you compare offers from multiple lenders, but you can also apply directly with a bank or credit union. Choose the option that gives you the best rates, fees, and service.

Can I use a conventional loan if I have student loan debt?

Yes, as long as your total debt‑to‑income ratio stays within the lender’s limit (usually around 45%). Paying down student loans before applying can improve your chances.

What is private mortgage insurance (PMI) and when is it required?

PMI protects the lender when the down payment is less than 20% of the home’s price. It is added to your monthly payment and can be cancelled once you reach 20% equity.

How does the Virginia closing process differ from other states?

Virginia typically uses attorney‑led closings. Your attorney will handle the title search, prepare the deed, and ensure all documents meet state requirements before you sign.

Can I combine a conventional loan with Virginia first‑time‑buyer assistance?

Yes. Programs offered by the Virginia Housing Development Authority can provide down‑payment grants or favorable loan terms that work alongside a conventional mortgage, reducing the amount you need to bring to closing.

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