How to Buy a House in Virginia: 6 Steps

Purchasing a house is a major financial decision that requires careful consideration and planning. In Virginia, the average home value is $395,685, higher than the national average of $362,481. This difference highlights the need to be well-informed about the financial commitments of homebuying.

Understanding down payment assistance programs, mortgage types and Virginia's specific regulations and requirements can ensure a smooth journey toward homeownership in the Old Dominion. MoneyGeek has compiled essential pointers to help you navigate the homebuying process in Virginia, from saving the down payment and choosing the ideal location to finding the best financing option for your particular needs and credit history.

Key Takeaways

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The average home value in Virginia is $395,685, higher than the national average of $362,481.

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To buy a home in Virginia, find an ideal location and explore mortgage options. Meet lenders' requirements and work efficiently towards closing on your loan.

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The Virginia Department of Housing and Community Development (VDHCD) offers down payment assistance programs, such as HOMEownership Down Payment and Closing Cost Assistance program, to help Virginians achieve homeownership faster.

Step 1: Prepare to Buy a House in Virginia

According to the U.S. Census Bureau, the homeowner vacancy rate in Virginia for the second quarter of 2024 was 1.2%. The homeowner vacancy rate measures the percentage of homes that are vacant and for sale at a given time and provides insights into the housing market's supply and demand dynamics.

Typically, a stable vacancy rate is around 2%, allowing homebuyers some choice and flexibility. With a rate between 1.0% and 1.9%, buyers face increased competition for fewer available homes and higher prices.

Before buying a house in Virginia, assess your financial and credit history. A strong financial profile improves your chances of getting approved when applying for a mortgage because lenders examine financial stability and creditworthiness to determine eligibility and loan terms.

Check Your Credit Score

Your credit score plays a significant role in determining the mortgage loans and interest rates you qualify for. A higher score increases your chances of securing a reasonable rate. According to Experian, the average credit score in Virginia in the third quarter of 2023 was 722.

If you have bad credit, or a score between 300 and 579 on the FICO scale, buying a house is still possible, but getting approved for a mortgage may be challenging. Check the table below to see which mortgage type is ideal based on the minimum credit score requirements.

Mortgage Type
Description
Minimum Credit Score

Conventional Loan

Conventional loans are standard loans not insured by the government, typically offering competitive rates.

620

Jumbo Loan

Jumbo loans exceed conforming loan limits, making them suitable for high-value properties.

700

FHA Loan

FHA loans are designed for low-to-moderate income borrowers, often with lower down payment requirements.

500–580, depending on the down payment

VA Loan

VA loans offer veterans and active military members favorable terms and no down payment options.

None given, but may require at least 620

USDA Loan

USDA loans are aimed at rural property buyers, often with no down payment required.

580

Source: Experian

Review Your Debt-to-Income (DTI) Ratio

Your debt-to-income ratio (DTI) is a crucial metric for lenders to understand how much of your monthly income is dedicated to debt payments and how much mortgage debt you can responsibly take on. In Virginia, the average mortgage debt was $278,177 in the third quarter of 2023, according to Experian. This figure reflects the financial responsibility that comes with homeownership.

Monthly debt payments factored into your DTI include mortgages, credit cards, student loans and other loan obligations. Use our debt-to-income ratio calculator below to determine your front-end DTI, which includes housing expenses, and back-end DTI, which consists of all your debt obligations.

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Debt-to-Income Ratio Calculator

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Determine How Much You Can Afford

Buying a house that exceeds your financial limits can lead to stress and financial hardship. To avoid this, consider using the 28% rule, which suggests you should not spend more than 28% of your gross monthly income on mortgage payments.

According to the U.S. Bureau of Labor Statistics, the median annual income in Virginia as of April 2024 was $49,920. This translates to a gross monthly income of $4,160 before taxes. With the 28% rule, your monthly mortgage payment should not exceed $1,165.

Use our mortgage calculator below to get a ballpark figure of your monthly mortgage payment in Virginia.

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Updated: Dec 6, 2024

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BUDGET FOR ADDITIONAL HOMEOWNERSHIP COSTS

When planning to buy a house, you need to consider more than just the mortgage payment. Additional housing expenses like property taxes and homeowners insurance can significantly impact your budget.

According to data from the Tax Foundation, Virginia residents face a property tax rate of 0.87% on owner-occupied properties. Additionally, the average cost of homeowners insurance in Virginia is $1,840 annually.

Step 2: Save for a Down Payment in Virginia

A down payment is an initial payment made when buying a home, typically 20% of the purchase price. However, for many, this standard can be a significant hurdle. The average home value in Virginia is $395,685, or a 20% down payment of $79,137. For homes above average or $415,000, the down payment increases to $83,000.

Fortunately, a 20% down payment isn't mandatory. Most mortgage options allow for lower down payments. For example, VA loans offer the possibility of purchasing a home with 0% down, while FHA loans require just 3.5%.

If you choose to put down less than 20%, your lender might require you to obtain private mortgage insurance. This insurance protects the lender in case of default but adds to your monthly expenses. Our PMI calculator can estimate your monthly premium based on your credit score and down payment.

Private Mortgage Insurance Calculator

Calculate your monthly private mortgage insurance (PMI) premium in Virginia based on your credit score and down payment.

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Explore Down Payment Assistance Programs

The Virginia Department of Housing and Community Development (VDHCD) offers down payment assistance programs to help make homeownership a reality for many residents. Please refer to the table below for specific information on the available programs.

Program
What It Offers

HOMEownership Down Payment and Closing Cost Assistance program (DPA)

This program provides up to 10% or 15% of the sales price for the down payment. Additionally, it offers $2,500 to assist with closing costs.

Step 3: Find the Right Location in Virginia

Finding the right location in Virginia requires evaluating several factors. Consider the average house price in your desired area and how close it is to family, friends and work or school. Access to public transportation, parks, restaurants and shopping centers can also influence your decision.

The cost of living is another consideration. According to the Missouri Economic Research and Information Center (MERIC), Virginia's cost of living index in the first quarter of 2024 was 101.3, slightly above the national average of 100. Here are some essential expenses to consider:

  • Food
  • Health care
  • Clothing
  • Utilities
  • Education
  • Transportation
  • Entertainment

Check the table below to see the average home values of some cities in Virginia based on recent data. You can also use our cost of living calculator to help you estimate how much to pay for all the essentials in different locations.

City
Average Home Value

Chesapeake City, VA

$395,990

Newport News, VA

$284,107

Norfolk, VA

$301,405

Richmond, VA

$357,704

Virginia Beach, VA

$406,933

Source: Zillow

Work With a Real Estate Agent

Working with a real estate agent can expedite your house hunt in Virginia. They can provide expert advice, handle paperwork, offer access to a wider range of properties and recommend service providers like title companies and inspectors.

When selecting a real estate agent, conduct thorough research and interview those with experience in your desired neighborhoods. Consider the following tips:

  • Find someone compatible with your needs and personality
  • Verify the agent's credentials, training and licensure
  • Ensure they have in-depth knowledge of the area
  • Shop around for agents and compare their rates

You can also use the license holder search tool from the Virginia Department of Professional and Occupational Regulation to find or verify real estate agents.

Step 4: Shop for the Best Financing Options in Virginia

You can choose from various mortgage types in Virginia, including conventional, jumbo, FHA, VA and USDA loans. You also have the flexibility to select terms ranging from 10 to 30 years. Additionally, you can decide between a fixed-rate mortgage or an adjustable-rate mortgage (ARM). Selecting the right financing option not only increases your chances of approval but also helps in saving money over time.

Know the Current Mortgage Rates

Interest rates on a mortgage can fluctuate daily due to various factors, including the type of mortgage, the lender and the overall economy. While the interest rate is a percentage of the loan amount charged annually by the lender, the Annual Percentage Rate (APR) encompasses the interest rate and other costs associated with the loan, providing a clearer picture of the true cost of borrowing.

As of December 2024, the APR for a 30-year fixed conforming loan in Virginia was 6.41%, while the APR for a 30-year fixed-rate FHA loan was 7.81%. The table below shows the current rates in Virginia by mortgage type.

Data filtered by:Results filtered by:
Loan Type:
Loan Type:30-Year Fixed
6.33%6.41%
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FHA LOAN VS. CONVENTIONAL LOAN

In Virginia, you typically choose between government and conventional mortgage programs. FHA loans, backed by the government, often require lower down payments, making them accessible for first-time homebuyers. In contrast, conventional loans are not government-backed and may require higher credit scores and down payments.

Use our FHA loan vs. conventional loan calculator to compare your options. Enter your home price, down payment, term length, credit score and interest rate to determine which loan best suits your financial situation.

Get Pre-Approved

Getting pre-approved for a mortgage in Virginia involves a comprehensive evaluation of your financial status, giving you a realistic picture of the mortgage amount you can afford. Lenders will issue a mortgage pre-approval letter, which can make you a more attractive buyer to sellers. The letter is typically valid for 60 to 90 days, giving you a window to make offers.

To get pre-approved, you must submit several documents demonstrating your financial stability. These documents include:

  • Proof of income, such as recent pay stubs or tax returns
  • Credit history
  • Employment verification
  • Identification documents
  • Bank statements

It's important to distinguish between mortgage pre-approval and prequalification. Prequalification provides a general idea of how much you might be eligible to borrow based on self-reported information. Pre-approval, however, involves a detailed examination of your financial background for a more accurate estimate of your borrowing capacity.

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HOW TO CHOOSE THE RIGHT LENDER

Lenders in the market have varying eligibility requirements, interest rates and fees, so do your homework to find the right fit for your needs. Banks often have a wide range of products and established reputations but may have stricter requirements. Credit unions might offer lower rates and personalized service, though their product offerings can be limited.

When choosing the right lender, consider the following tips:

  • Ensure the lender offers the type of loan you want. For example, if you're seeking an FHA loan, confirm the lender is FHA-approved.
  • Compare the lender's sample rates with today's mortgage rates in Virginia.
  • Understand the lender's underwriting process and check if you can complete a mortgage application online, by mail or in person.
  • Read reviews about the lender to gauge the quality of customer service.

Step 5: Conduct a Home Inspection in Virginia

Home inspections in Virginia provide a thorough assessment of a property's condition. Inspectors examine critical components such as the roof, foundation, plumbing, electrical systems and HVAC systems and report findings on the structural integrity, safety issues and necessary repairs.

For example, an inspection revealing major issues such as a compromised foundation or faulty electrical wiring could negatively affect the property's appraisal value. This might lead to complications in securing a mortgage, negotiating the sale price or buyers rescinding their offer to avoid the financial burden of extensive repairs.

State-Specific Inspections

Virginia regulates home inspections through the Board for Asbestos, Lead, and Home Inspectors, operating under the Department of Professional and Occupational Regulation (DPOR). Licensed home inspectors in the state must adhere to a strict set of standards of practice and are subject to periodic audits by the DPOR to ensure compliance, maintain high standards and protect homebuyers from issues.

When searching for a home inspector in Virginia, ensure they are licensed. You can verify this using DPOR's license look-up tool. Additionally, read online reviews and ask for references.

Go Through Appraisal

Home appraisals provide an unbiased estimate of a property's market value, which is essential for buyers, sellers and lenders. This valuation helps ensure that the price agreed upon reflects the home's actual worth. According to the 2023 Appraisal Survey from the National Association of Realtors (NAR), the median appraisal cost in 2023 was $500.

While inspections and appraisals both assess a property, they serve different purposes. An appraisal determines the market value, whereas an inspection evaluates the home's condition. Lenders require appraisals to confirm that the property's value supports the loan amount.

Step 6: Close on Your House in Virginia

Closing is the final step in purchasing a home in Virginia, marking the transfer of ownership and the moment you receive the keys to your new property. Your lender will provide a closing disclosure document three days before closing. This document outlines your loan terms, projected monthly payments and closing costs. As you approach the closing day, plan a final walk-through with your real estate agent to ensure the property is in the expected condition.

Sign All Documents

On closing day, you'll review and complete various paperwork to finalize your home purchase. These documents are crucial to ensure everything is in order.

  • Final loan application: This document confirms the details of your mortgage loan. It's your last chance to verify the information before the loan is finalized.
  • Deed transfer: The deed transfer officially and legally moves ownership of the property from the seller to you.
  • Promissory mortgage note: This is your written promise to repay the mortgage loan. It outlines the loan terms, including the interest rate and repayment schedule.
  • Homeowners insurance: Homeowners insurance in Virginia protects your new home from potential damages or losses. It provides peace of mind by covering repairs or replacements in case of unforeseen events.
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CONSIDER HIRING A REAL ESTATE LAWYER

Hiring a real estate lawyer is common when buying a house, though not mandatory in Virginia. A real estate lawyer specializes in property-related legal matters. They assist in reviewing contracts, ensuring compliance with laws and resolving disputes.

The cost of hiring a real estate lawyer ranges from $700 to $1,250. This depends on the complexity of the sale, the location, the property type and the specific needs of the homebuyer.

Pay Closing Costs

Closing costs are the fees you pay when finalizing a home purchase. In Virginia, the average closing cost is $4,001, according to NAR. This cost includes the following:

  • Appraisal fee: This covers the cost of appraising the home appraised to determine its value.
  • Title search and insurance fee: This fee ensures there are no liens or legal issues with the property's title.
  • Escrow deposit: An escrow deposit is often required to cover future property taxes and insurance.
  • Prepaid costs: These include advance payments for items like homeowners insurance and property taxes.
  • Other closing costs: This category covers additional fees such as recording and underwriting.

Virginia Homebuying Details: What You Should Know

While we've broken down the general steps of the homebuying process in Virginia, it's important to recognize the unique procedures specific to the state. Understanding these state-specific regulations and standard business practices is key to navigating the market effectively and avoiding potential pitfalls.

  1. 1
    Dual agency is legal

    In Virginia, a dual agency — where a single real estate agent or brokerage represents both the buyer and the seller in the same transaction — is legal but must be disclosed and consented to by both parties.

  2. 2
    Real estate attorneys are not required

    Virginia does not require buyers to hire a real estate attorney to handle the closing. However, many buyers do so to ensure that all legal aspects of the transaction are thoroughly reviewed.

  3. 3
    Virginia is a "caveat emptor" state

    Virginia follows a "caveat emptor" (let the buyer beware) philosophy. Sellers are not required to disclose most property defects. Instead, buyers are responsible for performing due diligence.

Learning about the different first-time homebuyer programs in Virginia can help you achieve homeownership faster.

FAQ About Buying a House in Virginia

Buying a house in Virginia is a financial commitment that lasts for years. We answered some frequently asked questions about buying a house in Virginia to kickstart your homebuyer journey.

How much does it cost to buy a house in Virginia?

What are the requirements to buy a house in Virginia?

What credit score do I need to buy a house in Virginia?

How much income do I need to buy a house in Virginia?

Is buying a house in Virginia a good idea?

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About Zachary Romeo, CBCA


Zachary Romeo, CBCA headshot

Zachary Romeo is a certified Commercial Banking and Credit Analyst (CBCA), and the Head of Loans and Banking at MoneyGeek. Previously, he led production teams for some of the largest online informational resources in higher education, with over 13 years of experience in editorial production.

Romeo has a bachelor's degree in biological engineering from Cornell University. He geeks out on minimizing personal debt and helping others do the same through people-first content.


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