Buying a Home: Exploring Your Options

Buying a home is one of the biggest financial decisions you’ll make, and today’s market can feel especially complex. This guide walks through key choices so you can move forward with confidence.

Take stock of today’s market

Higher home prices and interest rates have reshaped what it means to be a first-time homebuyer.

• The median age of first-time homebuyers has climbed to about 40, up sharply from the early 30s just a few years ago, reflecting a market with limited inventory and how long it takes many people to save.¹
• First-time buyers now make up just about one-fifth of recent buyers, down roughly 50% from the mid-2000s.²
• Repeat buyers dominate the market and often bring more equity and cash to the table, which can be challenging if you’re just starting out.

These trends can sound daunting, but they also explain why exploring your options, from loan programs to down payment strategies, matters more than ever.

Understand how much you may need to put down

You’ve probably heard you need 20% down to buy a home. In reality, many people purchase with far less.

• First-time homebuyers typically put down about 9-12%, while repeat buyers often put down more than 20%.³
• Many loan programs allow significantly lower down payments, and most recent homebuyers financed the majority of their purchase rather than paying cash.

A practical example: On a $400,000 home, a 10% down payment is $40,0000, while 3% is $12,000. The trade-off is that smaller down payments usually mean a higher monthly payment and the added cost of private mortgage insurance (PMI). PMI is an insurance policy that covers your lender in the event you can’t pay back what you borrowed. PMI can increase the overall cost of your loan, but conventional loans usually require less borrowing and lower closing costs than other types – even if the interest rate is slightly higher. You can avoid PMI if you're able to put at least 20% down on your home.

Compare common mortgage options

Most buyers use a mortgage to purchase a home, and different loan types are designed for different situations. Here are a few of the most common options to discuss with a lender.

• Conventional Loans: Normally repaid over 15, 20 or 30 years, these are widely used and can require as little as 0% down for qualified first-time homebuyers through special programs like Atlantic Union Bank's Steps Toward Achieving Results (STAR) Portfolio Loan Program or the Federal Home Loan Bank Homebuyer Assistance Program. They typically work best if you have solid credit and a stable income.
• FHA Loans: Insured by the Federal Housing Administration (FHA), these can be offered with as low as a 3.5% down payment. FHA requires a mortgage insurance premium (MIP) if your down payment is less than 20%. This helps ensure lenders in the unfortunate event that you default on your loan. The ceiling for how much you can borrow is often lower with these loans.
• VA Loans: Guaranteed by the U.S. Department of Veterans Affairs (VA), these are for eligible members of the U.S. military (active duty, veterans, National Guard and Reservists), as well as their surviving spouses. There’s no mortgage insurance or minimum down payment, but you’ll need to pay a funding fee ranging from 1.25% to 3.3% at closing.
• USDA Loans: Guaranteed by the U.S. Department of Agriculture (USDA), these are available to low-to-moderate income borrowers within certain income limits buying a home in rural, USDA-eligible areas. A major benefit to this type of loan is that eligible borrowers can finance with a 0% down payment. Guarantee fees do apply.
• Virginia Housing Programs: Through our partnership with Virginia Housing, we offer an array of special loan programs for both first-time and repeat homebuyers⁴ that help make homeownership more affordable. The qualifying guidelines are different from other loans with most requiring little or no down payment.⁵

The “right” loan depends on your budget, your credit, your military status and where you’re buying. A lender can help you compare total monthly cost, not just the interest rate.

Plan for the costs of buying a home

The purchase price is only part of what you’ll pay when you buy a home. Knowing the true costs up front can help you avoid surprises and budget with more confidence.

• Closing costs: These are the fees you pay to finalize the loan and transfer ownership, including lender fees, title services, appraisal and recording fees. For buyers, the closing costs typically range from about 2% to 5% of the home’s purchase price, depending on your loan, location and the services involved. On a $300,000 home, that could be roughly $6,000 to $15,000.
• Home inspections and appraisals: Your lender will require an appraisal to confirm the home's value, which is a separate fee typically paid at or before closing. A professional home inspection is strongly recommended, although not normally required by the lender, and usually costs between $350 and $750.
• Prepaid items: At closing, you may need to pay the first year of homeowners insurance plus several months of property taxes and mortgage interest in advance. Nationally, the average property tax bill on a single-family home was about $4,300 in 2024, with an effective tax rate around 0.86% of a home’s value, though this varies widely by state and local area.⁶
• Moving and immediate repairs: It’s also wise to set aside money for moving costs, new locks, small repairs and any essential furniture or appliances you’ll need right away. While these costs don’t show up on a loan estimate, they can easily add thousands of dollars to your overall budget.

When you talk with a lender, ask for a detailed estimate of your total cash to close, including down payment, closing costs and prepaid expenses, so you can see the full picture of what you’ll need to bring to the table.

Explore strategies to enter the market

Even in a competitive environment, you have options to make buying a home more achievable.

• Adjust your price range and location. Some buyers are expanding their search to more affordable neighborhoods or nearby suburbs to get more for their money.
• Build your down payment over time. With many buyers putting less than 20% down, setting a specific savings target for 3-10% can make the goal feel more manageable.
• Consider your debt and credit. Improving your credit score and reducing other monthly debts can help you qualify for better terms and potentially lower your overall housing cost.
• Look at assistance programs. Depending on your income and where you’re buying, you may qualify for down payment assistance or special programs for first-time homebuyers.

While some buyers can afford to buy a new home in all cash, most people still rely on financing and thoughtful planning.

Partner with professionals you trust

Buying a home isn’t just a financial transaction, it’s an ongoing relationship with your community and your lender. A trusted real estate agent can help you understand local price trends, competition levels and what to expect in negotiations. A knowledgeable loan officer can walk you through preapproval, help you compare loan options and estimate your monthly payment, closing costs and cash needed to close.

When you’re ready, reach out to a member of our team of mortgage professionals to talk through your goals, your budget and your timeline. Together, we can explore your options and help you decide which path to homeownership fits you best.

¹First-Time Homebuyer Share Falls to History Low. National Association of Realtors.

²The Typical First-Time Homebuyer is Now 40 Years Old, a Record High. Realtor.com.

³What’s the Actual Down Payment on a House in 2026? AmeriSave.

⁴Repeat homebuyers must not have owned a home within the previous three years.

⁵Virginia Housing home loan programs are only available in the state of Virginia. Eligible areas include Alexandria, Arlington County, Clarke County, Fairfax, Fairfax County, Falls Church, Fauquier County, Fredericksburg, Loudoun County, Manassas, Manassas Park, Prince William County, Spotsylvania County and Stafford County. Other areas in Virginia have a maximum household income limit that ranges from $129,000 to $144,000 with a maximum loan amount that ranges from $500,000 to $675,000 based on the area. Depending on the program, there is a maximum household income cap of $245,000 and no maximum loan amount.

⁶ATTOM’s 2024 U.S. Property Tax Analysis. ATTOMdata