Overview of Virginia Mortgages
As the oldest of the 13 colonies, Virginia boasts beautiful landscapes and a past steeped in American history that make the state a desirable place to own a home. Virginia’s mortgage rates have fluctuated over time. Some years they are higher than the national average and other years they are slightly lower. Virginia counties’ conforming and FHA loan limits vary widely.
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Virginia Mortgage Rates Quick Facts
Historical Mortgage Rates in Virginia
Historically, Virginia mortgage rates have sometimes been right in line with the national average, other years they have been higher or lower. Current rates are a bit below the national average.
Virginia Historic Mortgage Rates
|Year||Virginia Rate||U.S. Rate|
Virginia Mortgages Overview
Virginia, the oldest of the 13 colonies, is steeped in American history. Its capital, Richmond, is one of the oldest cities in the nation, and it’s famous for its urban rapids, breweries and amazing food. If you are looking to settle down here, know that homes are on the expensive side. The average sale price in the state is $300,992, as compared to the U.S. average of $236,450, according to Zillow.
Virginia Mortgage Rates
|Percentage of Homes||81.20%|
|Average Property Value||$236,321.26|
|Percentage of Homes||9.80%|
|Average Property Value||$213,836.12|
|Percentage of Homes||3.50%|
|Average Property Value||$206,188.14|
|Percentage of Homes||5.50%|
|Average Property Value||$235,322.50|
The conforming loan limits for Virginia range widely from the standard $417,000 up to $625,500. The FHA loan limits are similar, ranging from $217,050 to $625,500. This is a reflection of the high costs of homes in many parts of the state.
Conforming and FHA Loan Limits by County
|County||Conforming Limit||FHA Limit|
|Buena Vista City||$417,000||$271,050|
|Colonial Heights City||$535,900||$535,900|
|Falls Church City||$625,500||$625,500|
|Isle of Wight||$458,850||$458,850|
|King and Queen||$535,900||$271,050|
|Manassas Park City||$625,500||$625,500|
|Newport News City||$458,850||$458,850|
|Virginia Beach City||$458,850||$458,850|
|Virginia Loan Limits||$417,000||$271,050|
Anyone buying property in Virginia should be aware that they will likely get what is known as a “deed of trust,” not a mortgage. This is important to note because if you were to miss mortgage payments in the future, your lender does not need to get a court order to foreclose on your home. Deeds of trust contain “power of sale” clauses which allow lenders to hire a third party to auction the home they want to foreclose, skipping the hassle of going to court entirely.
Also of importance to buyers, Virginia is a “caveat emptor” or “buyer beware” state. This means that sellers are not required to disclose property defects to potential buyers. As such, a quality home inspection is an incredibly valuable tool to verify that the property is up to mark. Purchasing a home sans inspection usually means the buyer is accepting the property as-is.
30-Year Fixed Mortgage Rates in Virginia
A 30-year fixed-rate mortgage is a solid home loan option, particularly for buyers who intend to stay in their property long term. A fixed-rate mortgage, as its name indicates, is accompanied by an interest rate that remains the same for the duration of the loan. This is the most common home loan among buyers, as it offers a long time to pay off the loan (30 years) and the monthly payments do not change (unless the buyer decides to refinance). You can also choose a fixed-rate mortgage with a 15-year term and pay off your loan in half the time, but your monthly payments will be higher.
The average Virginia mortgage rate for fixed-rate 30-year mortgages is 4.59%.
Virginia Jumbo Loan Rates
The conforming loan limits throughout the state of Virginia vary widely from county to county. The conforming loan limit in a particular area is the maximum home loan that you can take out in that area and have the loan be subject to normal interest rates. If you need to take out a mortgage that exceeds that limit, you will be taking on what is considered a “jumbo loan.”
Jumbo loans are viewed as riskier for lenders as more money is on the line. Be aware that jumbo loans are accompanied by higher interest rates to make up for the additional risk.
The average jumbo loan rate in Virginia is 4.5%.
Virginia ARM Loan Rates
If you are purchasing a starter home or plan to flip the property, an adjustable-rate mortgage might be an attractive option for you. Unlike a fixed-rate loan, an ARM has an interest rate that changes over the course of the loan’s life. An ARM will offer a lower interest rate for a specific period of time lasting from somewhere between one and 10 years. When that introductory period has ended, the rate can go up or down (it usually goes up). The low introductory rate makes it clear why an ARM could be a good option for someone who plans to stay in their new home for a short period of time.
While an ARM’s interest rate is free to change, there are specific parameters laid out in the loan’s terms that control how many times the rate can change as well as the highest possible level that it can reach. Even if you plan on being out of the home well before in the introductory period ends, it is crucial that you check the interest rate cap before signing the loan, and make sure that it is something you would be able to afford to pay in case your plans change unexpectedly.
The average rate for an ARM in Virginia is 3.36%.
Virginia Mortgage Resources
Virginia buyers can work with state and national programs to help reduce the financial load of buying a house.
The Virginia Housing Development Authority is an all-inclusive resource offering valuable programs to buyers in the Old Dominion. It offers free homebuying courses, housing counselors, home loans, mortgage credit certificates and down payment assistance to eligible buyers.
The Virginia Department of Housing and Community Development provides a down payment assistance program for first-time homebuyers below a specified income level. This program offers up to 10 percent of the purchase price in down payment assistance and up to $2,500 in closing costs.
|Resource||Problem or Issue||Who Qualifies||Website|
|Virginia Housing Development Authority||Provides homeownership education, housing counseling, mortgage credit certificates and down payment assistance.||Eligible first-time homebuyers who complete a homebuyer education course.||http://www.vhda.com/Homebuyers/Pages/homebuyers.aspx#.V5qQjpMrJ2Y|
|Virginia Department of Housing and Community Development||Provides downpayment assistance (of up to 10 percent of the purchase price) and up to $2,500 in closing cost assistance.||Eligible homebuyers who complete a homeownership education course.||http://www.dhcd.virginia.gov/index.php/housing-programs-and-assistance/68-down-payment-assistance-dpa.html|
|USDA Rural Development - Single family loans||Offers payment assistance to increase an applicant’s repayment ability.||Applicants must be without decent, safe and sanitary housing; Be unable to obtain a loan from other resources on terms and conditions that can reasonably be expected to meet; Agree to occupy the property as your primary residence; Have the legal capacity to incur a loan obligation; Meet citizenship or eligible noncitizen requirements; Not be suspended or debarred from participation in federal programs.||http://www.rd.usda.gov/programs-services/all-programs/single-family-housing-programs|
|Home Affordable Refinance Program||Refinancing.||Single family homes and condos that fit within lending loan limits.||http://www.harp.gov/|
Virginia is also eligible for the United States Department of Agriculture Rural Development program. Through the USDA, loans and grants are available for qualifying residents in rural areas who are looking to buy a home.
Virginia Mortgage Taxes
Virginia charges taxes on real estate transfers, so be prepared for that when buying or selling a home. The transfer tax is $0.50/$500 or 0.1%. There is also a mortgage tax of $0.25/$100 up to $10 million value, and more beyond that price. The local option allows for one-third more of state recordation tax. Additionally, there is a $20 fee on every deed collected.
The Northern Virginia Transportation Authority and the Hampton Roads Transportation Authority are also able to charge a realty grantor’s fee of $0.40 per $100.
In Virginia, the buyer pays the state/local grantee tax, while the seller covers the grantor tax.
Virginia homeowners should also be aware that they can deduct the mortgage interest that they pay throughout the year from their taxable income when they file both federal and state income taxes.
Virginia Mortgage Refinance
Are you planning on refinancing in Virginia? You can work with the lender who issued your original mortgage to come up with a new plan that fits better with your current situation. Alternatively you are free to shop around and compare the rates of other lenders to find something more competitive.
A good resource is Virginia’s Home Affordable Refinance Program. HARP works with lenders across the state to provide qualifying homeowners with low closing costs and payment reductions.
Best Places To Get A Mortgage
SmartAsset’s interactive mortgage map highlights the best counties in the country (and in each state) for securing a mortgage. Hover over counties and states to see data points for each region, or use the map’s tabs to view the top counties for each of the factors driving our analysis.
Methodology For many people buying a house means securing a mortgage. To determine the best places in the country to get a mortgage we looked at four factors: overall borrowing costs, ease of securing a mortgage, cheap property taxes and cheap annual mortgage payments.
To calculate the overall borrowing costs, we looked at the expected costs over the first five years of a $200,000 mortgage with a 20% down payment, including closing costs. We calculated the ease of getting a mortgage as the ratio of mortgage applications to actual mortgage originations (secured mortgages) in each county. We based annual mortgage payments on the annual principal and interest payments for a $200,000 loan in that location, using average mortgage rates in each county.
Finally, we ranked locations based on these four factors, and then averaged those rankings, giving equal weight to each factor. The areas with the lowest average rankings are the best places to get a mortgage.
Sources: Mortgage Bankers Association, US Census Bureau 2016 5-Year American Community Survey, Informa, Bankrate, government websites, SmartAsset