​Make sure your credit history is as clean as possible in order to obtain a mortgage loan. Start by reviewing your credit report, which provides a history of your credit, bad debts and late payments. Some credit reports will also contain your credit score, which is calculated based on information in your credit report.

You are entitled to a free credit report* annually from each of the three major credit-reporting agencies below:

• Equifax​: (800) 685-1111
• Experian: (888) 397-3742​
• TransU​nio​n: (800) 888-4213

There is a charge to obtain your credit score.

Why are my credit report and score important?
A lender will typically pull a merged credit report based on information from all three of these agencies. Generally, the better (higher) your credit score, the better (lower) the interest rate you will qualify for on your mortgage loan. The lower your interest rate, the more house you can afford to purchase. Therefore, it is in your best interest to try to achieve the highest score you can by paying your bills on time and not carrying a lot of debt.

My credit report looks incorrect. What do I do?
Contact the credit agency as soon as possible if you find any errors in your credit report to have them corrected. Some issues can take up to three months to resolve and have removed from your credit report(s). Although your lender will pull your credit report, it is to your advantage to know if you have any errors on your report now rather than waiting until you have found a house and are trying to close the loan. Many sellers require that the loan close within a certain timeframe and may not be willing to hold the house for you while you try to resolve your credit issues.

According to the 2009 National Housing Pulse Survey, an annual survey published by the National Association of Realtors, having enough money for down payment and closing costs is considered by most Americans to be the biggest obstacle to buying a home. Even with a great credit score, it is possible to not be able to purchase a home due to lack of funds for down payment and/or closing costs.

Down Payment Costs
Ideally, you should have 20 percent  of the home's purchase price saved for a down payment. However,  there are public and private loan programs you may qualify for that require a much smaller down payment. Be aware though that with a down payment less than 20 percent, you may have to pay for private mortgage insurance (an insurance policy that protects the lender in the event you default on the loan). Private mortgage insurance typically adds 0.5 percent of the loan amount to your mortgage payments for the year. On an $180,000.00 mortgage, your private mortgage insurance (PMI) would cost $900.00 annually ($75.00 per month).

Closing Costs
Closing costs are additional expenses that you may have to pay to "close the deal" and transfer the property from the seller to you. Closing costs can run anywhere from two to five percent, or more, of the purchase price. These additional expenses include, but are not limited to:

• origination fees
• discount points
• appraisal and survey
• flood certification
• title search and insurance
• recording fees 
• city/state and real estate taxes
• credit report
• document preparation, underwriting and attorney fees
• prepaid interest
• hazard, flood, and private mortgage insurance premiums 
• escrows for future taxes and insurance premiums

Maintenance Costs
As a homeowner, there are other expenses you will need to pay long after the home buying process. You also need to consider costs related to maintaining and repairing your home, such as a leaking roof, broken heating/cooling system, plumbing repairs , etc.

The Department of Housing and Neighborhood Preservation has programs available to help eligible homeowners who cannot afford necessary repairs and improvements.

​An educated buyer makes for a successful homeowner. Make sure you fully understand the buying process and the true cost involved with homeownership. There are many free homeownership classes offered throughout the Hampton Roads area.