How to Buy a House in West Virginia: A Homebuyer’s Guide

Consider hiring a real estate agent to save you some of the hassles of finding a new home in West Virginia. They are often the best source of information when it comes to real estate deals.

An easy way to find a real estate agent is to ask your family and friends for recommendations, especially those who have bought a home in the neighborhood you’re interested in. When choosing an agent, make sure they have at least the following qualities:

• Honesty and integrity
• Knowledge of the real estate market
• Communication and negotiation skills

Although buying a house is exciting, it can also be challenging. You want to make sure the agent you hire is someone you can trust and feel comfortable with to make the homebuying process easier.

It’s important to remember that your cost of living will change whether you move to a different part of the country or another city in the same state. Before deciding where you want to live in West Virginia, make sure to consider the costs of the following expenses:

• Groceries
• Rent or mortgage
• Education
• Transportation
• Utilities (electricity, water, internet)
• Income and property taxes
• Car and health insurance

You can use MoneyGeek’s cost of living calculator to determine if your potential new home in West Virginia is more or less affordable than your current location.

West Virginia is one of the least expensive states you can choose to live in. Case in point, it has the eighth lowest cost of living in the country for the third quarter of 2022, according to the Council for Community & Economic Research (C2ER).

If you’re looking for the cheapest places to buy a house in West Virginia, consider suburbs or non-metropolitan areas. That said, social amenities such as schools, hospitals and malls may be limited or distant in these locations.

Some cities in West Virginia also have lower costs of living, like Beckley. Still, it’s vital to find a balance between property prices, the cost of living and access to services and amenities before selecting your ideal location.

Your mortgage rate depends on the lender and type of home loan you choose. Additionally, your borrower profile plays a significant role in the rate you receive. For instance, if you have good to excellent credit, you’re likely to get an interest rate on the lower end of the scale.

See the list below to find out the average rates for different mortgage types:

• Conventional loans: 6.3%
• VA loans: 6.4%
• USDA loans: 3.3%
• FHA loans: 7.0%

Note that eligibility for some mortgage programs is limited to borrowers who meet specific requirements. VA loans, for example, are only available to active military members and veterans.

Because a house is one of the most expensive purchases you will make in your life, it’s critical to find out if you can afford it. Use MoneyGeek’s mortgage calculator to get a ballpark figure of your overall mortgage costs.

We also have an FHA vs. conventional loan calculator to help you compare the two mortgage programs and determine which option is the best for you. Additionally, we provided scenarios to explain when is the best time to use either mortgage type.

After you get an estimate, it’s important to shop around and compare different lenders to find the best mortgage for your unique needs and profile.

The mortgage terms you receive largely depend on your financial profile. Typically, mortgage lenders take the following factors into consideration to determine APR rates, loan amounts and more:

• Credit score: In general, the higher your credit score, the less you’ll pay on your loan.
• Debt-to-income (DTI) ratio: Your DTI ratio indicates the percentage of your income that goes to your debts.
• Down payment: You may be able to secure lower rates from your lender and avoid private mortgage insurance (PMI) by putting down 20% on a home purchase.
• Income: Lenders look at your income to assess your ability to repay the loan.

It’s best to go into your first home purchase after improving these individual factors to increase your chances of obtaining mortgage approval.

Your down payment may vary based on the mortgage type you choose. In contrast to FHA loans, which allow a down payment of just 3.5%, conventional loans usually require at least 20% down to avoid private mortgage insurance (PMI).

Conversely, down payments are not required for government-backed loan programs such as USDA and VA loans. However, they have eligibility requirements that limit qualified applicants. For example, you must be a low-income borrower looking to purchase a home in an eligible rural area to get a USDA loan without a down payment.

Remember that your down payment influences your interest rates and loan terms. Making a larger down payment may significantly decrease your monthly mortgage payments.

When choosing among available mortgage programs, it’s vital to consider additional fees that can affect the cost of your loan, such as private mortgage insurance (PMI). Note that this insurance will only benefit your lender, protecting them in case you default on your payments.

Fortunately, not all mortgage options require PMI. MoneyGeek lists the additional requirements of different loan types based on your down payment.

• Conventional loans: You need to purchase PMI if your down payment is less than 20%.
• FHA loans: PMI is not required, but you need to pay an upfront mortgage insurance premium (MIP).
• USDA loans: No PMI required, but a guarantee fee — paid to the USDA by your lender — will be included in your monthly loan payment.
• VA loans: No PMI required.

Mortgage down payments often prevent homebuyers from achieving homeownership. Fortunately, there are down payment assistance programs that can help West Virginia first-time homebuyers and repeat buyers overcome this particular hurdle.

Some of the available down payment assistance programs in West Virginia include:

• Homeownership Program: Through its Homeownership Program Loan, the West Virginia Housing Development Fund (WVHDF) helps make homeownership more affordable for eligible borrowers.
• Movin’ Up: The WVHDF designed the Movin’ Up Program for moderate-income homebuyers looking to buy a new home.
• Down Payment and Closing Assistance: The WVHDF’s down payment and closing assistance program allows homebuyers to lower the amount of upfront money required to finance a property.

To ensure the pre-approval process goes smoothly, make sure to prepare all the necessary documents. These include the following:

• Tax returns
• W-2 forms
• Pay stubs
• Bank account statements
• Investment statements
• Driver's license
• Social Security number

Expect your lender to request additional documentation as part of the standard process. For example, if you are self-employed, you may have to submit year-to-date profit and loss statements as well as statements of unpaid accounts receivable.

It’s crucial to get pre-approved for a mortgage when buying a house in West Virginia. The process can take up to 10 days, but this may vary depending on the lender. If you are pre-approved, you will receive a pre-approval letter that can be used when you’re putting down an offer for a home.

Pre-approval letters generally last for 90 days, so most homebuyers wait to get pre-approved until they’re ready to make a bid on a home. Once the validity of your pre-approval letter expires, you can ask your lender to renew it by providing your latest financial and credit information. However, keep in mind that renewal may require a hard credit check.

A pre-approval letter indicates that you’re a serious homebuyer with the financial capacity to take out a mortgage. It typically contains the maximum loan amount your lender has agreed to give you, plus other pertinent details such as loan term, interest rate and monthly mortgage payment. That said, the contents of a pre-approval letter may differ per lender.

There isn’t a limit to how many times you can get a pre-approval letter, but keep in mind that lenders conduct hard credit checks to pre-approve you. Requesting too many times can negatively affect your credit score.

Moreover, pre-approval letters typically last for 90 days. Make sure to use this timeframe to your advantage so you won’t have to request a renewal from your lender.

It’s easy to miss things when you’re swept up in excitement over finding your dream home. Fortunately, a professional and licensed home inspector can help you spot and identify specific issues and determine if any major repairs are necessary.

Based on the home inspection standards of practice by the International Association of Certified Home Inspectors, an inspector should cover the following parts of a house during inspection:

• Roof
• Exterior
• Basement, foundation and crawlspace
• Heating
• Cooling
• Plumbing
• Electrical
• Fireplace
• Attic, insulation and ventilation
• Doors, windows and interiors

Buying a house is one of the largest and most important purchases you can make, so it’s only natural to want to know everything about the property before closing the deal. That’s where professional home inspections come in. While a home inspection is not legally required in West Virginia, it’s still always a good idea.

Note that a standard home inspection excludes some specific things. If you want to test the house for radon or asbestos, you will need to hire a specialty home inspector to conduct a special inspection at an additional cost.

Home appraisals can provide valuable insight for you into the actual value of the property. To determine the home’s worth, a real estate appraiser needs to conduct a physical inspection, taking into account various details of the house, such as its size, floor plan, condition and amenities.

Mortgage lenders require home appraisals to ensure the house is worth the amount that the homebuyer borrowed. After all, the house serves as collateral for the mortgage. That means if the borrower defaults on the loan, the lender can sell the property to recoup its money.

Thus, if the property’s appraisal value is lower than expected, the real estate transaction can be delayed or even canceled.

The process of getting the necessary documents ready for closing can take some time. As such, it's critical to prepare the following beforehand:

• Homeowners insurance: A homeowners policy can pay for damages to your home’s physical structure due to a covered event. Additionally, it provides protection for personal belongings inside your home.
• Title insurance policy and survey: This ensures that the house is free and clear of any liens. Without this, your lender can refuse to close on the mortgage loan.

As always, take care to read and understand the fine print before signing the contract. You don’t want to overlook any details that could wind up costing you more in the long run.

When finalizing a home purchase, expect the following fees included in your closing costs:

• Escrow: Your lender sets up special holding accounts where the money for property tax, homeowners insurance, mortgage insurance and annual funding fees are deposited.
• Prepaid interest: This is the interest you accrue on your loan between the closing date and the end of the month.
• Appraisal fee: This refers to the amount you pay an appraiser to determine the actual value of the property.
• Origination fee: Some lenders charge a fee for evaluating and setting up your mortgage loan.
• Discount points: By buying discount points, you can lower the interest rate of your loan.
• Third-party fees: You will also pay third-party fees such as legal fees, structural and pest inspection charges, title insurance premiums, recording fees and more.

Although buying a house can be nerve-wracking, having a step-by-step guide can help ease the homebuying process and prevent any issues or delays. MoneyGeek encourages readers to do their due diligence in researching ideal locations, calculating mortgage rates and preparing all the necessary documentation.

Once you’ve completed the home purchase, make sure to manage your funds wisely. You not only have your monthly mortgage payments to think of but also property taxes, homeowners insurance premiums and utility charges.

Becoming a homeowner entails many responsibilities. You have to maintain the appearance and working condition of your home, which requires both constant attention and continual expense. This means you always need to set aside money to anticipate expected maintenance and unexpected repairs.