Ready to buy a home in the Diamond State?
Delaware offers small-town charm, coastal living, and financial perks like no state or local sales tax. Your dream home could be a cozy single-family house in Dover or a stylish condo near Rehoboth Beach.
Whether you’re a first time home buyer in Delaware or new to it’s housing market, this guide will walk you through everything you need to know. We’ve simplified the entire home-buying process into 13 easy, actionable steps.
Key Takeaways:
- Get Pre-Approved Early: A pre-approval letter helps you stand out in Delaware’s seller driven housing market.
- Use Assistance Programs: Delaware programs like Preferred Plus and the First-Time Home Buyer Tax Credit can lower your down payment and closing costs.
- Don’t Skip Inspections: Get termite, radon, and flood inspections especially in coastal or older homes.
- Ask for Credits: If issues come up, ask for seller credits at closing instead of repairs.
- Protect Your Investment: Consider hurricane and flood insurance and check if you qualify for Delaware’s property tax credits.
How to Buy a Home for the First Time in Delaware: 13 Steps!
This step-by-step guide walks first time home buyers in Delaware through everything, from assessing finances and budgeting for a down payment to choosing the right mortgage. These 13 steps make the perfect process of buying a house in Delaware- simple and manageable.
Step 1: Assess Your Finances
If you are buying a home in Delaware, the two factors that should matter the most to you are your credit score and Debt-to-Income (DTI) ratio. Additionally, you must also consider how much you can afford for a down payment, a monthly mortgage, taxes, and insurance.
What Is Your Credit Score?
A credit score is a three-digit number that indicates your creditworthiness to lenders. The minimum credit score to buy a house in Delaware depends on the type of mortgage you get.
Minimum and Ideal Credit Scores by Loan Type
| Loan Type | Minimum Score | Ideal Score |
|---|---|---|
| FHA | 500 (10% down) | 580+ (3.5% down) |
| Conventional | 620 | 740+ for best rates |
| VA | No minimum | 620 |
| USDA | No minimum | 640 |
Portfolio mortgage loans are easy to qualify for. Here, the credit score needed to buy a house starts at around 580. VA loans are available only to veterans and active-duty service members, and require a score of 620. FHA loans also accept scores as low as 580. They are good for buyers with lower credit scores looking for houses in Delaware.
When purchasing property in Delaware, you can check your credit score using several reliable methods. Most of them are free and will not harm your score:
- Annual Credit Reports: Federal law entitles you to one free credit report every 12 months from each of the three major credit bureaus: Equifax, Experian, and TransUnion. These can be accessed through the official, government-authorized website, AnnualCreditReport.com.
- Credit Monitoring Services: Many banks, credit card issuers, and financial service apps provide complimentary and regular access to the FICO score. This is a convenient way to track your credit health over time.
Knowing how to repair your credit score is important to get better mortgage rates. If you’re a first time home buyer in Delaware, here’s what you need to do:
- Pay down credit card balances and make all payments on time.
- Avoid opening multiple new accounts quickly.
- Consider becoming an authorized user on a family member’s account with a good history.
- Monitor your score regularly to track progress.
How to Calculate Your Monthly Mortgage Payment in Delaware?
As a first time home buyer in Delaware, knowing your average mortgage payment helps you plan your budget. Your total payment includes 4 key components, often called PITI:
- Principal and Interest: This is a major chunk of your payment, covering the amount you borrowed (principal) and the cost of borrowing (interest). It’s determined by your loan amount, interest rate, and loan term.
- Taxes: Delaware has some of the lowest property taxes based on your home’s assessed value. The lender holds these funds in an escrow account and pays the tax on your behalf.
- Insurance: Lenders require you to have homeowners’ insurance to protect the property. The annual premium is usually divided by 12 and added to your monthly payment, also managed through the escrow account.
Apart from PITI, your monthly payment may also include Private Mortgage Insurance if your down payment is less than 20%, and HOA fees.
What Is a Debt-to-Income (DTI) Ratio?
Your debt-to-income ratio shows how much of your monthly income goes toward debt payments, including mortgage, car loans, credit cards, and student loans. To calculate it, add all monthly debts and divide the total by your gross pre-tax monthly income.
A high DTI can prevent you from qualifying for a mortgage, as it shows that you struggle to manage your debt. For the best mortgage rates and a higher likelihood of mortgage approval in, aim for a DTI ratio of 36% or lower.
💡 In Delaware, your debt-to-income ratio (DTI) targets are generally 36% lower for conventional loans, but you may qualify with a DTI up to 43%, or even 50%. This applies if you have a strong compensating factors like excellent credit and cash reserves.
Recommended DTI Ratios by Loan Type
| Loan Type | Recommended DTI Ratio | With Compensating Factors |
|---|---|---|
| Conventional | 36% back-end | 45-50% |
| FHA | 43% back-end | Up to 50% |
| VA | 41% | Can exceed 50% with the residual income test |
| USDA | 41% back-end | 44% with strong credit |
To improve your DTI ratio for a mortgage, you can either reduce your monthly debts or increase your verifiable income.
- Pay Down Debt: Use a tax refund or bonus to clear smaller loans, or consolidate multiple debts into a single loan with a lower monthly payment.
- Increase Verifiable Income: Ask for a raise, take on part-time work, or start a side business. Include all consistent income sources on your application, such as bonuses or commissions, but remember that lenders require a two-year history for secondary income.
- Adjust Your Housing Budget: A larger down payment reduces your loan amount and your monthly mortgage payment. You can also consider a lower home purchase price to keep your future housing costs down.
Step 2: Budget for Your Down Payment and Closing Costs
You should set aside money for the down payment and closing costs in Delaware. Delaware’s first time home buyer programs help make homeownership accessible and affordable.
How Much Down Payment Does a Delaware First Time Home Buyer Need?
Typically, the down payment for buying a house for a first time home buyer in Delaware usually ranges from 3% to 20% of the property’s price. However, it can vary based on the loan type. FHA loans require just 3.5% down, while some conventional loans allow a 3% down payment.
To help with these upfront costs, there are many state and local down payment assistance programs in Delaware. They provide grants or loans to cover these expenses.
👉 First-Time Home Buyer Programs in Delaware: Find out which is the #1 downpayment assistance program in the Sunshine State.
How to Estimate Closing Costs in Delaware?
Closing costs in Delaware are fees and expenses paid at closing beyond your down payment. Typically, buyer closing costs in Delaware range from 2% to 5% of the home’s price. So, for a $371,100 home, buyers might pay about $7,422 to $18,555 in closing costs.
These fees cover lender charges, appraisals, inspections, title insurance, taxes, agent commissions, and recording fees when buying a property in Delaware.
👉With Houzeo’s Delaware closing cost calculator, you can find the exact costs instantly.
Step 3: Get Pre-Approved for a Mortgage
Secure your financing early by getting pre-approved for a mortgage as a first time homebuyer in Delaware. This step helps you understand your budget and strengthens your offer when buying a house.
How to Get Pre-approved as a First Time Home Buyer in Delaware?
You need to follow these steps to get pre-approved when buying a house in Delaware:
- Gather Financial Documents: Provide proof of income (recent pay stubs and W-2s), tax returns (last two years), asset statements, debt information, and a government-issued ID.
- Choose a Lender and Apply: Compare lenders in Delaware and submit a mortgage application to get the best rates and terms.
- Receive Pre-Approval Letter: The lender verifies your info and issues a letter stating your approved loan amount, usually valid for 30–90 days.
A mortgage preapproval turns you from a casual house hunter to a serious buyer in Delaware, as it:
- Strengthens Your Offer: 86% of the sellers prefer buyers with a pre-approved mortgage. For the strongest position, ask for a fully underwritten pre-approval, where the lender has already verified all your documents.
- Defines Your Budget: It clarifies exactly how much you can afford, allowing you to focus your home search on a realistic price range.
- Speeds Up Closing: With much of the financial vetting already completed, the mortgage process is streamlined once your offer on a home is accepted.
Yes, you can get pre-approved and even buy a home with bad credit in Delaware. However, your loan options may be limited. You can also expect higher interest rates with poor credit.
Step 4: Choose the Right Mortgage
As a first time homebuyer in Delaware, assess your finances and select a loan that fits your budget and qualifies you for available programs.
| Feature | Conventional | FHA | VA | USDA |
|---|---|---|---|---|
| Min Credit Score | 620 | 580 (500 w/10% down) | No minimum | 640 |
| Min Down Payment | 5% to 20% | 3.5% | 0% | 0% |
| Max DTI | 45% to 50% | 43% to 50% | 41%+ | 41% to 44% |
| Mortgage Insurance | PMI if <20% | Always | None | Always |
| Loan Limits | $766,550+ | $498,257 to $766,550 | $766,550+ | Varies |
| Property Eligibility Criteria | Few | Must meet FHA standards | Must meet VA standards | Rural/suburban areas only |
Step 5: Decide Where to Buy a Home in Delaware
Deciding where to buy is one of the most important steps for a first time homebuyer in Delaware. Consider factors like local housing markets, popular neighborhoods, cost of living, and amenities to help you find the best places to live in Delaware.
Why Now Is the Time to Buy in Delaware
The Delaware housing market is a seller’s market. You now have more negotiating power and a wider selection of properties to choose from:
- Housing Supply is High: Delaware has a 6-month housing supply, which is the benchmark for a buyer’s market.
- Prices Have Stabilized: The median home price has remained relatively constant at $371,000. This allows you to set your budget with more certainty.
- Sellers are Negotiating: 27.8%-32% of homes in Delaware have seen price drops, signaling increased seller flexibility.
- Homes are on the Market Longer: Properties are taking an average of 41-43 days to sell, which allows you to make more informed decisions.
Delaware follows standard national mortgage preapproval procedures, but DSHA programs offer flexibility and have a few rule exceptions for first-time and repeat homebuyers, such as credit and DTI requirements and loan eligibility what are these exemptions values.
These trends show that now is the best time to buy a house in Delaware. According to Mauricio Umansky, founder of The Agency, the current market provides “great opportunities for buyers to be aggressive and write strong offers.”
Popular Areas for Different Buyer Types
With the market now in your favor, you can be more selective about where you buy. Use this advantage to find a neighborhood that matches your priorities — whether it’s schools, commute, or lifestyle.
- Best Areas for Families: Neighborhoods like Middletown, Hockessin, and Pike Creek are popular for their top-rated schools and family-friendly atmosphere. If you envision life in a close-knit community with great parks and schools, explore homes for sale in Newark, DE. Family-oriented properties here typically range between $399,900–$409,300.
- Best Areas for Retirees: For those seeking a relaxed, low-maintenance lifestyle, towns like Rehoboth Beach, Lewes, and Milford are ideal. If you’re interested in a coastal community with a strong sense of community and active social scene, consider homes for sale in Ocean View, where prices generally range from $547,500–$555,000..
- Best Areas for Young Adults: Wilmington and Dover offer growing job opportunities, lively downtowns, and convenient access to major cities like Philadelphia and Baltimore. If you’re drawn to a more urban vibe with modern apartments and entertainment options, check out homes for sale in Wilmington, where you can find stylish condos starting around $285,000.
Consider the Cost of Living When Choosing a Location
When looking for the best place to buy a house in Delaware, consider the overall cost of living, as lower home prices can be offset by higher taxes or insurance.
- High-Cost Areas: Rehoboth Beach and Fort Lewes are 15–20% above the national average.
- Moderate-Cost Areas: Middletown and Newark are near or just below the national average.
- Low-Cost Areas: Dover, Smyrna, and Seaford are 8-12% below the national average.
Step 6: Start House Hunting in Delaware
Once you’re pre-approved and know where you want to live, the next step is finding the right house. As a first-time home buyer in Delaware, you have two options:
- Work with a Realtor.
- Search for homes online.
An experienced agent can give you valuable local insights and expert guidance on neighborhood trends. However, you’ll have to negotiate the buyer agent commission with the seller, which may raise the home sale price.
If you prefer to take the lead, a high-tech platform like Houzeo is what you need. Whether you’re looking for beachfront mansions, high‑rise penthouses, spacious big homes, or luxury homes in Delaware, Houzeo has you covered. You can browse through thousands of listings, set alerts, and save your search. You can even schedule showings and submit offers, all by yourself.
Don’t Just Browse. Buy.
Your entire home purchase, managed in one place.
Download the Houzeo Mobile AppStep 7: Schedule and Attend Home Showings
After you narrow down your list of potential homes, schedule and attend showings to see each property in person. For a first time home buyers in Delaware, visiting homes firsthand helps you evaluate condition, layout, and neighborhood, ensuring you make an informed choice.
During the showing, ask specific questions like:
- How long has the home been on the market?
- Why is the owner selling?
- What is the age of the roof, HVAC system, and water heater?
- Are there any HOA fees or pending special assessments?
- Is the property located in a hurricane prone zone?
When buying a house in Delaware for the first-time, check the property carefully during the open house. Look for roof sagging, foundation cracks, water stains, uneven floors, or sticking doors, which may indicate serious issues.
As a first time home buyer in Delaware, there are three main aspects you need to focus on when shortlisting homes:
- Insurance Risks: Verify the home’s disaster zone using FEMA’s maps. Get a 4-point inspection and a wind mitigation report to assess insurability and identify features, like an old roof or the lack of impact windows, that could drive up insurance costs.
- Commute and Lifestyle: Test your commute during rush hour. Visit the neighborhood at different times to check for noise from traffic, airports, or nightlife. Ensure convenient access to key amenities like schools, groceries, and parks.
- Delaware Home Loans/Assistance Program Eligibility: If you’re applying for a loan or a first-time homebuyer program in Delaware, make sure the property meets the Delaware State Housing Authority (DSHA) requirements.
Step 8: Make an Offer
When crafting an offer, make a competitive bid but stay within your budget. As a first-time home buyer in Delaware, consider factors like the home’s market value, recent comparable sales, and any repairs needed. This increases your chances of getting a fair deal.
Step 1: Analyze Recent Sales
Your agent will pull up real estate comps that are similar to the one you want. Focus on the final sale price, not the list price. Home prices in many Delaware metro areas have seen modest declines, so your offer should reflect this trend.
Step 2: Adjust for the Home’s Condition
Factor in the age and condition of the roof and HVAC. If a comparable home sold for $371,000 but had a new roof, and your target home needs a $20,000 replacement, adjust your offer to account for that expense.
Step 3: Factor in Today’s Market
With more homes for sale, you have leverage. Even home builders are lowering their prices by almost 5% to attract buyers. So, for a home that is priced fairly, offer 3% to 5% less. If it is overpriced, you can justify an even lower offer, citing both the comps and market trends.
What is an Earnest Money Deposit in Delaware?
An earnest money deposit is a “good-faith” payment that shows you are a serious buyer. This money is held in escrow and applied towards your down payment at closing.
In Delaware, the standard deposit is typically 1% to 3% of the purchase price. On a $371,100 home, this would be between $3,711 and $11,133. This range is standard for Delaware real estate transactions.
Once your offer is accepted, you typically have 3 business days to submit the deposit to an escrow agent, such as a title company or real estate attorney.
Yes, you can get your earnest money deposit back in Delaware, but only if you back out of the sale for the following reasons:
- The inspection reveals major issues, and you exercise the inspection contingency.
- The appraisal comes in low, and you exercise the appraisal contingency.
- You’re unable to secure the required financing, and exit during the financing contingency period
- Title issues are discovered.
Many Delaware first time home buyers forfeit their earnest money because:
- They back out after the contingency periods expire without a valid reason.
- They violate contract terms.
- The seller meets all contract obligations, but the buyer still refuses to close.
Step 9: Conduct Home Inspections
First-time home buyers in Delaware should schedule home inspections to uncover any issues before buying a house. You typically get the inspection report within 24 to 48 hours.
Which Delaware Home Inspections Should You Schedule?
A standard home inspection in Delaware isn’t enough. The state’s unique climate and weather risks require a few specialized inspections:
- General Home Inspection ($300–$500): A licensed inspector will examine everything from the roof to the foundation. They pay special attention to storm damage, proper drainage, and the age of the AC unit.
- 4-Point Inspection ($100–$150): Insurance companies require a 4-point inspection for homes over 30 years old. It focuses on the four most critical systems: the roof, HVAC, electrical, and plumbing. An old roof or an outdated electrical panel can result in the insurance coverage being denied.
- Wind Mitigation Inspection ($85–$125): This inspection documents hurricane-resistant features like impact windows, hurricane straps, and a hip-shaped roof. These features can qualify you for insurance discounts of up to 45%.
- WDO / Termite Inspection ($75–$100): A termite inspection is mandatory for government-backed loans like FHA and VA, and is highly recommended for all others. Delaware’s warm, damp climate is a breeding ground for termites and other pests that can cause severe structural damage.
Consider Other Specialized Inspections
Based on the property, a Delaware first-time home buyer may want to conduct additional tests. For older homes, a sewer scope can detect cracks or tree roots in the main sewer line, saving you from a $15,000 repair down the road. If you see large cracks or uneven floors, a $700 foundation inspection is worth the investment.
For rural properties, a septic inspection is essential. If the home has a pool, a separate pool inspection will check the pump, filter, and structure for costly defects.
It’s not recommended. Even if you plan to buy cheap homes in Delaware, skipping a home inspection can lead to unexpected repair costs.
Step 10: Complete the Home Appraisal
After the inspection, your lender will typically order a home appraisal, which professionally values the property to ensure it matches your offer.
Why Do Lenders Need Appraisals?
A home appraisal in Delaware confirms the property’s market value. Appraisers typically focus on the following parameters:
- Flood Zone and Elevation: A home in a high-risk flood zone (like Zone AE or VE) will likely be valued lower than a similar inland property due to higher insurance premiums.
- Insurance and Mitigation Features: The age of the roof, the presence of hurricane shutters, and impact-resistant windows directly affect a home’s insurability and, therefore, its market value.
- Condo/HOA Health: Appraisers closely examine a condo association’s financial health. They look for anything that may reduce the unit’s value, like the association’s reserve funds or any pending special assessments.
A standard appraisal in Delaware costs between $350 and $650 and typically takes 7 to 14 days to complete. For luxury or waterfront properties, the cost and timeline can be higher.
If the appraisal comes in lower than your offer price, you have an appraisal gap. In such a situation, you can either:
- Renegotiate the Price: Ask the seller to lower the price to the appraised value. In the current market, many sellers are willing to negotiate.
- Cover the Gap: If the seller won’t budge, you can choose to pay the difference in cash.
- Dispute the Appraisal: If you believe the appraiser made a factual error or used poor comparable sales, you can file for a Reconsideration of Value.
- Walk Away: If you cannot reach an agreement, your appraisal contingency allows you to cancel the contract and get your earnest money back.
Step 11: Negotiate Repairs and Credits
As a first time home buyer in Delaware, use your home inspection results to negotiate repairs and request credits from the seller. This step can help reduce unexpected costs and ensure your new house is move-in ready.
How to Use Your Inspection Report to Negotiate Repairs?
Your negotiation strategy should center on issues that impact the home’s safety, structural integrity, and insurability. Minor cosmetic flaws are not worth fighting over and can make you seem unreasonable. It’s easy to make this mistake as a first home buyer in Delaware.
Focus your request on these critical areas:
- Safety Hazards: This includes outdated and dangerous electrical panels, faulty wiring, or missing safety features like GFCI outlets near water.
- Structural Problems: Any issues with the foundation, load-bearing walls, or the roof structure.
- System Failures: A failing HVAC system, major plumbing leaks, or an old roof.
Get 2 to 3 written estimates from licensed contractors for any major repairs. A repair request that includes professional quotes shows you are serious and have done your homework.
Should You Ask for Repair Credit?
While you can ask the seller to perform the repairs themselves, it’s better to ask for credit instead. Credit gives you the funds to hire your own contractors and ensures the work is done to your standards, not just the cheapest way possible. It also allows the sale to proceed on schedule, without any delays.
How to Negotiate Seller Concessions
Seller concessions are a powerful tool for reducing your out-of-pocket closing costs when buying real estate in Delaware. Here, the seller pays for some of your expenses, such as the appraisal, title insurance, or property taxes.
Your ability to negotiate concessions depends on your loan type. Each loan program sets a maximum limit on how much a seller can contribute:
| Loan Type | Minimum Down Payment | Maximum Seller Concession |
|---|---|---|
| Conventional | Less than 10% | 3% of the purchase price |
| Conventional | 10% or more | 6% of the purchase price |
| FHA Loan | Any amount | 6% of the purchase price |
| VA Loan | Any amount | 4% of the purchase price |
| USDA Loan | Any amount | 6% of the purchase price |
Step 12: Review Your Closing Costs
After negotiating repairs and credit as a first time home buyer in Delaware, review all closing costs carefully. Check title fees, escrow, insurance, and taxes so you can finalize your budget and confidently buy your house.
Understanding Closing Costs in Delaware
- Delaware Transfer Taxes ($3,000+): Delaware charges a 4% transfer tax, usually split between buyer and seller. On a $300,000 home, that’s about $6,000 total. A First-time home buyer in Delaware may qualify for a transfer tax reduction, cutting their share from 2% to 0.5%.
- Title Fees ($2,000+): These cover the title search, closing services, and insurance. Buyers typically pay for owner’s title insurance, while owner’s coverage is optional but smart to have
- Third-Party Fees ($1,000 to $1,500): This category includes the appraisal fee, credit report fee, and flood certification fee. It also covers any inspections you ordered, like the general, 4-point, and WDO inspections.
- Prepaid and Escrow Costs ($3,000 to $6,000): You will pay for your first year of homeowners’ and flood insurance upfront. You will also fund your escrow account with several months of property tax and insurance payments to cover future bills.
Step 13: Close on Your New Home
Closing day is the moment you officially become the owner of your new Delaware home. Its success depends on a careful final walk-through, a smooth funding process, and making sure all legal documents are properly signed and recorded.
Complete Your Final Walk-Through
Within 24 hours of closing, you will do one last walk-through of the property. This is not a formal inspection, but rather your final chance to see if you want this home. Use this checklist:
- Verify Repairs: Bring your inspection report and repair addendum. Confirm that all negotiated repairs have been completed to a professional standard.
- Test Everything: Run the air conditioning and test all appliances. Make sure every system is functioning as it should.
- Check for Included Items: Ensure all items that were supposed to be included in the sale, like appliances, window treatments, and light fixtures, are still in place.
- Look for Signs of Additional Damage: Make sure no new damage has occurred since your last visit. If you see any issues, notify your agent and the title company immediately before you sign any documents.
Sign the Documents
While there are numerous documents to sign, the most important ones are:
- The Closing Disclosure: You will sign the final version of this document, which outlines all your loan terms and costs.
- The Promissory Note: This is your legal promise to repay the loan. The promissory note outlines the loan amount, interest rate, repayment schedule, and maturity date.
- The Mortgage: This document secures the property as collateral for your loan.
Once you have signed everything, you will provide your “cash to close” amount via a cashier’s check or wire transfer. After your lender sends their funds to the title company, the deal is officially funded.
Get Your Keys and Celebrate
Once the deal is funded, the title company will record the new deed with the county, officially transferring ownership to you. After they pay the seller and other parties, you will finally get the keys to your new home.
Congratulations, you are officially a Delaware homeowner! 🎉
🚩 What are the Red Flags to Look for When Buying a House in Delaware?
A new home is a huge financial investment. To ensure that you don’t sink your money into a dud, look out for these red flags:
1. Bargain-Priced Homes
An asking price that’s significantly lower than comparable homes in the area seems like a dream come true. But that’s just until the roof collapses or faulty electrical systems burn the house down.
An extremely low price could mean the property is uninsurable, or is located in a high-risk flood zone with steep insurance costs. So before you put in an offer, check the home’s sale history and other permits from the local county’s office. Also, get insurance quotes to understand your total expense better.
2. Neighborhood Sell-Out
During the open houses in Delaware, if you notice too many “For Sale” signs on a single street or in a small community, it should ring alarm bells. It could be due to skyrocketing HOA fees, declining school quality, or a recent increase in crime rates, Delaware poses a crime rate of 4.5 per 1,000 residents. It could also point to a future nuisance, like a commercial development planned nearby.
Talk to potential neighbors to get their opinion on the area. You can also check community social media pages or online forums like Nextdoor for discussions about local issues.
3. Plumbing Issues
Many Delaware properties especially those built before the 2000s can have low water pressure, leaks Delaware’s humidity and salt air speed up pipe deterioration and several other plumbing problems.
Pay close attention to the smell in the closets, bathrooms, and around the air conditioning unit. Open kitchen and bathroom cabinets and smell the area under the sink. If you detect a musty odor, ask for a separate mold inspection along with the standard home inspection.
4. HVAC Problems
When considering buying a house in Delaware, first time buyers should pay close attention to the condition of the HVAC systems. Delaware’s climate means homes need heating for cold winters and air conditioning for humid, hot summers.
If the HVAC system is broken, outdated, or inefficient, it can be very costly to repair or replace—sometimes thousands of dollars. During your inspection, make sure the HVAC heats and cools effectively, as many Delaware home buyers face losses in repairing huge HVAC issues.
5. Condensation in Windows
Condensation in windows is a notable red flag for Delaware home buyers, particularly because of the state’s humid summers and cold winters. When moisture forms on or between window panes, it usually signals failed window seals or poor insulation, which can result in costly energy inefficiency and discomfort year-round.
Persistent condensation may also lead to wood rot and mold in window frames, jeopardizing indoor air quality and requiring expensive repairs.
What Should You Do After Closing?
Welcome home! Now it’s time to handle a few must-dos to protect your investment:
- File for Homestead Exemption: Delaware does not offer a traditional “Homestead Exemption” like Florida or Texas. Instead, Delaware homeowners especially seniors (65+) and sometimes those with disabilities or qualified low income can apply for a Senior School Property Tax Credit and certain county or city tax exemptions if the home is their primary residence.
- Set Up Utilities: Turn on water, power, internet, and trash services. Because Delaware can get humid, plan for pest control and routine HVAC checkups.
- Get Insurance: If you have a mortgage, homeowners insurance is required. Flood insurance may also be needed in low-lying or coastal areas like Lewes and Rehoboth Beach. Hurricanes are also covered under the National Flood Insurance Program in Delaware.
- Home Maintenance Plan: Service your HVAC system twice a year, clean gutters often, and check your roof for leaks. Watch for basement moisture or mold, especially near the coast.
How to Buy a House in Delaware Without a Realtor?
Research neighborhoods and browse listings on trusted sites like Houzeo. Then, schedule showings directly with sellers or their agents. You can also hire a real estate attorney to review contracts and handle legal details.
Next, get pre-approved for a mortgage, make an offer, schedule inspections, and negotiate repairs. With the necessary due diligence, you can buy a house without a Realtor.
Which First Time Home Buyer Programs in Delaware Can You Apply For?
Various programs make homeownership accessible for a Delaware first time home buyer. They assist with down payments through grants or low-interest, deferred-payment loans. Applicants must meet the income and credit score criteria and complete a homebuyer education course to avail of these programs.
| Program Name | Eligibility | Grants / Assistance | Key Benefit |
|---|---|---|---|
| DSHA Preferred Plus Program | First-time and repeat buyers who meet income and purchase price limits | Up to 5% of the loan amount for down payment and closing costs | Can be combined with DSHA first mortgage options |
| DSHA Homeownership Loan Program | Buyers who meet credit, income, and home price requirements | 30-year fixed-rate mortgage options | Stable, affordable monthly payments |
| First State Home Loan Program | First-time buyers or those purchasing in targeted areas | Down payment assistance and competitive interest rates | Flexible underwriting and local lender support |
| New Castle County Down Payment Program | Income-qualified buyers purchasing in New Castle County | Up to $10,000 toward down payment and closing costs | Local county-based assistance |
| Bank Assistance and FHA Grants | Buyers who meet lender or FHA requirements | Grants up to $10,000 for down payment help | Low down payment FHA loans starting at 3.5% |
1. DSHA Preferred Plus Program
- Eligible Buyers: First-time and repeat buyers who meet DSHA income and purchase price limits.
- Credit Score: Minimum 620.
- Assistance: Up to 5% of the loan amount for down payment and closing costs.
The DSHA Preferred Plus Program offers up to 5% of your loan amount to help with your down payment and closing costs. It can be combined with a DSHA first mortgage for lower monthly payments and easier qualification.
2. DSHA Homeownership Loan Program
- Eligible Buyers: Delaware residents who meet credit, income, and home price limits.
- Credit Score: Minimum 620.
- Assistance: 30-year fixed-rate first mortgage options.
The DSHA Homeownership Loan Program provides affordable 30-year fixed-rate mortgages for eligible buyers. It can also be paired with DSHA down payment assistance for greater savings.
3. First State Home Loan Program
- Eligible Buyers: First-time buyers or those purchasing in designated target areas.
- Credit Score: Minimum 620.
- Assistance: Down payment help and competitive interest rates.
The First State Home Loan Program offers down payment assistance and affordable interest rates to help Delaware buyers qualify more easily. It’s ideal for those buying their first home or purchasing in approved areas across the state.
4. New Castle County Down Payment Program
- Eligible Buyers: Income-qualified buyers purchasing in New Castle County.
- Income Limits: County-specific income restrictions apply.
- Assistance: Up to $10,000 toward down payment and closing costs.
The New Castle County Down Payment and Settlement Assistance Program provides up to $10,000 for qualified homebuyers. It helps reduce upfront costs, making homeownership more accessible within the county.
5. Bank Assistance and FHA Grants
- Eligible Buyers: Buyers who meet lender or FHA requirements.
- Credit Guidelines: Flexible credit requirements for FHA loans.
- Assistance: Grants up to $10,000 for down payment help; FHA loans require only 3.5% down.
Many lenders, including major banks, offer down payment grants up to $10,000 or lender credits for first-time buyers. FHA loans also allow low down payments and flexible credit requirements, making it easier to qualify for your first home in Delaware.
» First Time Buyer Programs: Find the perfect program that helps you get the key to your first home.
What Should You Know Before Buying a House in Delaware?
Before you buy a home in the Diamond State, you must understand the factors that can impact your budget and lifestyle.
What are Some Additional Costs When Buying Houses in Delaware?
Apart from the purchase price, you must account for several other expenses, like property taxes and potential HOA fees. However, the most critical consideration for any Delaware homebuyer is insurance.
- Why Homeowners Insurance is Crucial: Delaware’s susceptibility to hurricanes, floods, and other natural disasters makes homeowners’ insurance important. This coverage protects your investment from catastrophic damage.
- High Insurance Costs: In Delaware, homeowners insurance can be costly due to coastal flood risks. In high-risk areas like Rehoboth Beach or Lewes, premiums can reach around $3,000 to $4,500 per year — nearly double the national average.
- Choosing the Right Policy: When selecting a policy, ensure it provides adequate hurricane and flood coverage. You could lower your premium by choosing a home with wind mitigation features like impact windows or a newer roof.
Do You Need Separate Floood Insurance in Delaware?
Yes, you do. Flood insurance in Delaware is important for many homeowners due to the state;s high flood and hurricane risk especially in coastal and floodplain areas.
| Flood Zone | Risk Level | Insurance Recommendation |
|---|---|---|
| A, AE, V, VE | High-Risk | Located in FEMA high-risk flood zones and coastal hurricane surge areas. These zones have at least a 1% annual chance of flooding and high hurricane/wind risk. |
| B, X | Moderate-Risk | Areas outside high-risk floodplains but within mapped flood-prone regions (“moderate flood risk”) and subject to some hurricane exposure. |
| C, X | Low-Risk | Areas outside mapped floodplains and at higher elevation or further inland (“minimal flood risk”) with less hurricane impact. Wind/hurricane coverage is needed in these areas. |
When is Flood Insurance Required?
Whether you need flood insurance typically depends on your property’s location, your mortgage lender, and your homeowners’ insurance provider. However, there are two main situations where flood and hurricane insurance is mandatory in Delaware:
- Federally-Backed Mortgages in High-Risk Zones: If your home in Delaware is located in a FEMA-designated high-risk flood zone (Special Flood Hazard Area, or SFHA) and you have a federally-backed mortgage, federal law requires you to purchase and maintain flood insurance. This applies regardless of your home’s value.
Why First Time Homebuyers Should Explore Delaware Now?
Delaware is a smart choice for first-time buyers, thanks to its no-income-tax policy and a market that now favors buyers. From Wilmington’s growing job market to Lewes’ coastal charm, Delaware offers communities for every lifestyle and budget. With thousands of homes for sale and multiple Delaware State Housing Authority down payment assistance programs, homeownership is more achievable than ever.
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