Virginia Mortgage Rates

Photo Credit: ©iStock.com/Joe_Potato

Virginia Mortgage Rates Quick Facts Median Home Value: $251,300 (Zillow) Loan Funding Rate: 63.2% (CFPB) Average Mortgage Rate: 4.01% (Freddie Mac) Homeownership Rate: 65.3% (St. Louis Fed) Median Monthly Homeownership Costs: $1,706 (U.S. Census Bureau)

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.

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 median sale price in the state is $252,000, as compared to the U.S. average of $228,000, according to Zillow.

The conforming loan limits for Virginia range widely from the standard $453,100 up to $679,650. The FHA loan limits are similar, ranging from $294,515 to $679,650. This is a reflection of the high costs of homes in many parts of the state.

If you’re buying property in Virginia you should be aware you 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 4.1%.

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 4.4%.

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 3.9%.

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.

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

When you refinance, 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.