Quick Answers: First-Time Buyer FAQ
What should a first-time homebuyer do first? Check your credit score, review your full financial picture, and get preapproved by a lender. Preapproval tells you exactly how much you can borrow and makes your offer stronger to sellers.
How much money do you need to buy a house for the first time? Less than most people think. Conventional loans require as little as 3% down, FHA loans require 3.5%, and VA and USDA loans require 0%. NC's NC 1st Home Advantage program provides up to $15,000 in additional down payment assistance for first-time buyers.
What credit score do you need to buy a house? Conventional loans generally require 620+. FHA loans require 580 with 3.5% down. VA loans have no official minimum. Higher scores unlock lower interest rates.
Are there first-time homebuyer programs in North Carolina? Yes. NCHFA offers up to $15,000 in down payment assistance, a mortgage program with 3% assistance, and a tax credit worth up to $2,000 per year on new homes.
Step 1. Know Your Credit Score (and What It Means)
At New Home Inc, we work with first-time buyers across the Triangle every month. The number one thing we tell every buyer before they do anything else: know your credit score.
Your credit score is a three-digit number between 300 and 850 that tells lenders how likely you are to repay borrowed money. It is the single biggest factor in whether you get approved and what interest rate you receive.
What Lenders Look For
Lenders evaluate your FICO score based on five factors: payment history (35%), amounts owed (30%), length of credit history (15%), credit mix (10%), and new credit inquiries (10%).
Here is a general breakdown by loan type: Conventional loans typically require 620 or higher. FHA loans require 580 with 3.5% down. VA loans have no official federal minimum, but most lenders look for 580 to 620. USDA loans generally require 640. For Raleigh-area buyers, 660 or higher positions you for competitive rates, and 740+ unlocks the best terms.
For a complete breakdown, read What Is a Good Credit Score to Buy a House.
How to Improve Your Score Before Applying
Start at least six months before you plan to buy. Pay all bills on time. Reduce credit card balances below 30% of your limit. Avoid opening new accounts. Check your report for errors at AnnualCreditReport.com and dispute anything inaccurate.
Step 2. Understand What You Can Actually Afford
The 28/36 rule is a widely used guideline: spend no more than 28% of gross monthly income on housing costs and no more than 36% on total debt. At $100,000 annual income, that means a max housing payment of about $2,333/month.
With the median home sale price in Raleigh at approximately $430,000 and rates near 6.25% per Freddie Mac, a household income of $100,000 to $115,000 is typically needed for the median Raleigh home. NHI communities in Willow Spring, Wendell, Zebulon, and Lillington offer homes below the Raleigh median, expanding your options.
Do not just look at the purchase price. Your real monthly cost includes principal, interest, property taxes, insurance, PMI, and HOA fees. Budget for all of it.
For Raleigh-specific affordability calculations, read How Much Mortgage Can I Afford in the Raleigh Area.
Run Your Numbers
Try it now: Use our NHI Mortgage Calculator to estimate monthly payments or switch to the Buying Power tab to enter your income and debts.
Step 3. Get Preapproved, Not Just Prequalified
A prequalification is an informal estimate. A preapproval is a verified, conditional commitment based on full documentation review. The preapproval process typically takes 48 hours or less.
Why Sellers Prefer Preapproved Buyers
In a market where homes sell within weeks, sellers want confidence that a deal will close. A preapproval letter signals solid financing. Without it, your offer may not be taken seriously.
At New Home Inc, we work with preferred lenders who understand new home construction Raleigh NC and can offer benefits like closing cost credits and rate buydown programs.
Step 4. Understand Your Loan Options
Conventional loans are the most common. First-time buyers can qualify with as little as 3% down with a 620+ credit score. PMI required below 20% equity.
FHA loans require just 3.5% down with a 580 score. More flexible qualification but require mortgage insurance for the life of the loan. For details on FHA and new construction, read FHA Loans for New Homes.
VA loans require zero down payment and no PMI for eligible military buyers. For families near Fort Bragg, VA loans paired with NC assistance create an exceptionally affordable path to new homes in Lillington NC.
USDA loans also require zero down in eligible rural and suburban areas. Several Triangle communities qualify.
Step 5. Take Advantage of NC First-Time Buyer Programs
NC 1st Home Advantage Down Payment ($15,000)
The NC 1st Home Advantage provides up to $15,000 for first-time buyers and veterans. Zero-interest, forgiven after 15 years. Credit score of 640+ required.
NC Home Advantage Mortgage (3% Assistance)
The NC Home Advantage Mortgage provides up to 3% of the loan amount in down payment help. Available to first-time and move-up buyers. Same forgiveness structure.
NC Home Advantage Tax Credit (MCC)
The NC Home Advantage Tax Credit provides a federal tax credit of 50% of annual mortgage interest on a new home, up to $2,000/year for the life of the loan. Over 30 years, that is up to $60,000 in savings.
For a full breakdown of down payment amounts and how these programs reduce your cash at closing, read How Much Do You Need for a Down Payment on a Home in NC.
Step 6. Know What to Expect with Costs Beyond the Mortgage
Closing Costs (2-5% of Loan Amount)
On a $400,000 loan, expect $8,000 to $20,000 in closing costs covering lender fees, appraisal, title insurance, and attorney fees. NHI's preferred lenders may offer closing cost credits on select homes.
Property Taxes and Insurance
Rates vary by county. Wake County, Johnston County, and Harnett County all have different rates that can shift your monthly payment by $100 or more. Always calculate full PITI plus HOA before committing.
Emergency Reserves
Keep three to six months of living expenses in savings after closing. Homeownership comes with unexpected costs. This cushion prevents a broken water heater from becoming a financial crisis.
For savings strategies, read Best Ways to Save for a Home Down Payment.
Step 7. Decide Between New Construction and Resale
Why First-Time Buyers Are Choosing New Construction
New construction eliminates the biggest financial unknowns. With a resale home, you inherit whatever condition the previous owner left behind: aging roof, outdated wiring, inefficient HVAC. Those are expensive surprises when your budget is tight.
With a new NHI home, everything is new, warrantied, and built to current code. Every NHI home is certified through Eco Select Energy and meets ENERGY STAR standards, delivering lower utility bills from day one. NHI also offers rate buydown programs on quick move-in homes that lower your interest rate for the full 30-year term.
For a step-by-step walkthrough, read The New Home Buying Process.
Step 8. Build Your Wish List and Start Looking
Needs vs. Wants
Create two lists. Non-negotiable requirements: bedrooms, school district, commute, budget ceiling. Preferences: home office, first-floor primary, larger lot, community amenities. Knowing the difference keeps you focused.
Choosing the Right Community
Location affects taxes, schools, resale value, and daily quality of life. NHI builds across the Triangle in communities selected for access to employment corridors and school quality. Visit during the day and evening. Picture yourself there for five years or more.
Step 9. Protect Your Credit During the Process
Once you are preapproved and under contract, do not change anything about your financial profile. No new credit cards. No financed furniture. No car loans. No large unexplained deposits. Your lender pulls credit again before closing, and any changes can delay or kill the deal.
Wait until after closing to make major purchases on credit.
Ready to Start Your Home Search?
Start by running your numbers with our NHI Mortgage Calculator.
Then explore new homes in Raleigh NC to browse communities and floor plans. Looking at specific areas? Check out new homes in Clayton NC, new homes in Fuquay-Varina NC, new homes in Wendell NC, new homes in Zebulon NC, or new homes in Willow Spring NC.
Have questions? Contact us and we will walk you through it.
