Mortgage Rates Virginia

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    Mortgage Rates Virginia: A Complete Guide To Home Buying

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    Virginia’s median home price is relatively high compared to the national average. However, home sales are still high which signifies a competitive housing market – this makes buying a home in Old Dominion relatively challenging.

    If you’re looking for the best home deals in the state, you need to know the most current mortgage rates in Virginia. This guide will provide you access to daily-updated Virginia mortgage rates and a complete rundown of the state’s homebuyer assistance programs!

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    Mortgage Options In Virginia 

    You have three loan options when it comes to buying a home. Each loan product has its benefits, caveats, and unique features which makes understanding them essential. Understanding what they do will help you pick the loan that best fits your financial situation. 

    Conventional Home Loan 

    Conventional mortgages are the most common loan types offered by banks and other private lenders. They’re subject to loan amount limits, which differ by area. In Virginia, the conforming loan limit varies widely from the national standard of $548,250 to $822,375 in several counties. 

    Conventional mortgages are further divided into three main loan types, which cater to different financial circumstances and needs.

    Fixed-Rate Mortgage

    Fixed-rate mortgages feature a static interest rate & annual percentage rate that aren’t influenced by market fluctuations. Since your loan rates are constant, your monthly payments won’t rise or fall. 

    The predictability of fixed-rate mortgages makes them a favorite among first-time homebuyers. However, the static rate & APR on fixed loans come with a higher interest rate compared to other loans.

    In addition to the common 30-year loans, you can opt for shorter 15-year or 20-year loan terms if you want lower rates. However, expect a higher monthly payment in return.

    Adjustable-Rate Mortgage (ARM)

    The interest & annual percentage rate on an adjustable-rate mortgage change annually based on a market index chosen by the lender. ARMs also have a period of low, fixed mortgage rates called an introductory period.

    The introductory period’s low mortgage rates make them popular for short-term savings. However, your rates may be unpredictable once it enters the adjustable phase.

    An ARM’s introductory periods usually last from 3 to 10 years. The introductory period is listed in the name of the loan– for instance, a 3/10 ARM comes with three years of fixed rates before they adjust annually.

    Jumbo Mortgage

    Jumbo loans are typically used to buy higher-priced homes, which can be useful in states with a high median home value like Virginia. They allow you to exceed conforming loan amount limits but come with higher interest rates and stricter qualification requirements. 

    Government-Backed Loan Programs

    The United States federal government sponsors three major mortgage programs aimed to boost the homeownership rate in specific demographics, such as veterans and rural communities. 

    Here are the three main government mortgage programs and their main features:

    • FHA loans: An FHA loan is geared toward low-income borrowers, featuring lower interest rates as well as more lenient qualification requirements. The downside is a mandatory mortgage insurance payment for the loan’s entire life. 
    • USDA loans: United States Department Of Agriculture-administered loans are subject to strict area restrictions. This means you must purchase a home in eligible areas if you want to get a USDA loan. However, you get the benefit of a zero-down mortgage with reduced mortgage insurance premiums.
    • VA loans: You can only qualify for these zero-down home loans if you’re an active or former military service member. You must pay a VA funding fee worth 2.3% of your loan for the zero-down option, but you can put more money down to lower your VA loan fees. 

    Mortgage Refinancing

    Refinancing a mortgage means taking out a new loan to pay off your existing mortgage. You can do this to accomplish one of two things:

    • Alter your loan term: You can change your mortgage’s length or type using a rate and term refinance. For instance, you can shorten a 30-year loan to pay it off faster or lengthen a 15-year one for lower mortgage payments. You can also change an ARM into a fixed-rate loan to dodge the unpredictable rate adjustments.
    • Convert home equity into cash: Cash-out refinancing liquidates your home equity. With this refi, you take out a loan larger than your current mortgage balance. Any money left over after paying your main loan can be used for other needs. 

    Compare Mortgage Rates In Virginia 

    Historically, Virginia mortgage rate trends are relatively close to national average mortgage rates. Check the table below for current mortgage rates in Virginia. All the mortgage and refinance rates here are taken from America’s top lenders.

    Today’s Mortgage Rates in Virginia

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    Current mortgage & refinance rates are subject to change without prior notice. Your actual rate & APR may vary depending on your financial conditions and other factors. 

    Enter your financial details into the calculator above this page for a customized Virginia mortgage rate & APR estimate!

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    First-Time Homebuyer Programs In Virginia

    The State of Virginia sponsors homebuyer assistance programs through the Virginia Housing Development Authority (VHDA). As with most states, Virginia Housing considers first-time homebuyers as anyone who hasn’t owned a home in the past three years. 

    VHDA Conventional Programs

    Virginia’s primary homebuyer assistance program offers 30-year fixed-rate conventional loans with or without mortgage insurance (MI). To qualify for either loan, you must fulfill these requirements:

    • Provide a 3% down payment
    • Have a minimum credit score of 640 (with MI) or 660 (without MI)
    • Complete a homebuyer education course
    • Buy a single-family primary residence in Virginia

    VHDA Down Payment Assistance

    Qualified Virginia Housing Conventional borrowers can qualify for one of these two down payment assistance (DPA) programs:

    • VHDA Plus Second Mortgage: Offers a 30-year second mortgage worth up to 5% of your purchase price. 
    • VHDA Down Payment Assistance Grant: Provides up to 2.5% of your purchase price as a down payment and closing cost assistance grant. Does not need to be repaid.

    Mortgage Credit Certificate (MCC)

    VHDA borrowers can get an MCC to receive a federal income tax credit. In Virginia, your MCC is worth 10% of your annual mortgage interest. 

    For example, if you pay $8,000 in interest per year, you’ll receive an $800 tax credit.

    Buying A Home In Virginia 

    Any missteps on your home buying journey can increase your costs. To avoid expensive mistakes, follow these six simple steps to buying a home:

    Step 1: Get Pre-Approved

    When starting a mortgage process with a lender, you’ll go through a credit rating check. If you pass, the lender will give you a pre-approval letter with key details of your loan, like its rate, loan type, and maximum loan amount.

    The letter will help you understand how much to budget for your house hunt and can also demonstrate to the seller that you’re financially ready to buy property. 

    Step 2: Find A Real Estate Agent

    A good real estate agent can help you find the best home deals and give you key information about your chosen neighborhood. When interviewing potential agents, pay close attention to their review scores and experience in the local area.

    Step 3: Look For Homes

    Your house hunt should start at the neighborhood level. Pick an area that fits your lifestyle needs, then search local home listings there. 

    We recommend choosing the most affordable house that still ticks all your boxes. If you end up buying a fixer-upper, use the money you saved for upgrades and improvements. 

    Step 4: Put Down An Offer

    Catching the seller’s eye can increase your chances of getting your dream home. Act quickly and make an offer above the property value to attract their attention. Consult with your realtor about how much you should offer to avoid overpaying.

    Step 5: Schedule Inspections & Appraisals

    Check the property before scheduling a closing date. Hire home inspectors and appraisers to uncover issues that need repairs and determine the home’s actual value. If the home has severe issues or is overvalued, contact the seller to renegotiate a deal.

    Step 6: Finalize The Deal

    Prepare money for your closing costs and lender fees before settling on a closing date. On the day itself, have your realtor present to answer any questions you may have before signing the paperwork. 

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    How To Get Better Virginia Mortgage Rates 

    Taking a few points off your mortgage may not save you a lot of money now, but your savings will eventually add up. Over the life of your loan, those few points you take off can save you thousands of dollars. 

    Follow these tips to reduce your home mortgage rates!

    Increase Your Down Payment

    Increasing your down payment reduces your loan balance/amount, which drives your monthly payments down. Your loan officer may also see you as a less-risky borrower, granting you lower rates. Moreover, putting at least 20% down helps you avoid mortgage insurance expenses.

    Purchase Mortgage Points

    You can buy mortgage points to reduce your interest rate. Typically, every point is worth 1% of your loan and reduces your rates by 0.25%. These points can cost thousands of dollars upfront, so they’re best bought if you’re looking for long-term savings. 

    Apply For Shorter Loan Terms

    Shorter loan terms pose less risk to the lender, which may land you better rates. In addition to that, you’re decreasing how many times you pay your mortgage, reducing your overall interest expenses. 

    Additional Rate Reduction Tips

    Aside from the three tips above, you can reduce your rates and save on your mortgage in other ways:

    • Have a good credit score.
    • Compare loan offers from multiple lenders.
    • Seek advice from a mortgage broker.

    Closing Thoughts 

    Due to the high median home value, finding an affordable home in Virginia can be challenging. However, knowing the latest mortgage rates and the key home buying steps can help you find and buy the house of your dreams. 

    If you’re looking for the best mortgage deals in Virginia, Wesley LLC is here to help. Contact our team today to schedule a mortgage consultation! 

    Written By Ed Wallace
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