Featured Experts
Lisa Cullum
Lisa Cullum Financial compliance officer, Wood County HOME Consortium’s First-Time Homebuyer Program View bio
Patti
Patti Shamblin Director of loan origination, West Virginia Housing Development Fund View bio

This guide was written by

MoneyGeek Staff

West Virginia offers many different settings for residents and a rich historical culture. You can find a home in the mountains, the foothills or near one of its numerous lakes or rivers. And best of all, that home is likely to be very affordable.

The Mountain state led the nation in home ownership in 2009, with a nearly 80 percent home ownership rate, according to its commerce website. That distinction may be partly due to the state’s low property taxes and cost of living rate below the national average. In this step-by-step guide to getting a mortgage in West Virginia, we will explore what resources are available to help you find your new home in the Mountain State.

1

Shop Mortgage Rates in West Virginia

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Multiple factors affect mortgage rates. Of course, the borrower’s individual situation, credit score and the property’s location are primary factors. Slide into the mix competition in the area, foreclosure rates and laws in West Virginia, along with the cost of doing business, and the result is what rates lenders offer. Market conditions, such as the track record of loan repayment by borrowers in West Virginia can also affect rates. Click here to find a more comprehensive explanation of what drives mortgage rates.

2

Homebuying Help in West Virginia

The West Virginia Housing Development Fund has a few home buying assistance programs. The HOMEownership program offers a 30-year, fixed rate mortgage loan for up to 100 percent of the home’s purchase price to qualified buyers. The Movin’ Up program for moderate-income homebuyers does not have a first homebuyer requirement. It is geared toward home buyers who might have outgrown their current residence or just want to make a change. Both programs offer qualified homebuyers down payment and closing cost assistance loans at low interest rates.

There are also standard homebuying programs offered nationally, such as loans through the Federal Housing Authority (FHA) and Veterans Administration (VA). Select mortgage lenders in West Virginia can help with these programs.

The USDA 502 Direct Loan Program offers low- and very-low-income applicants in federally-determined rural areas payment assistance to reduce the mortgage payment in the near-term. No down payment is typically required for these loans. First-time homebuyer’s can look here for a guide to and in-depth explanation of the homebuying process.

First-Time Buyer Financial Assistance in West Virginia

Check here to see what you might qualify for and how to get financial assistance to purchase your first home in West Virginia.

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3

West Virginia Home Affordability

West Virginia historically has had a reputation for affordable housing. Its commerce site says the price for an average home in the state is 38.5 percent below the national average and one-third the price of homes in the Washington D. C. area. Based on data from the 2011 Coldwell Banker Home Price Comparison Index, you could buy a home three times the size in WV compared to Washington D.C.

Of course, location, interest rates, and the local economy are primary factors affecting home prices and affordability. West Virginia had a median household income of $41,059 in 2014, which is down 2.07 percent from 2013 but up 1.36 percent from 2011. Currently, the unemployment rate for West Virginia is 6 percent as of June 2016.


How West Virginia Mortgage Rates and Home Prices Affect Monthly Payments

Metro Area Estimated Monthly Mortgage Payment* Q1 2016 (Change from Previous Year) 2015 Median Home Price 2014 2013
Charleston $608 $129,300 (+3.90%) $135,600 $132,600 $134,000
Cumberland $317 $67,400 (-5.90%) $81,100 $92,000 $102,200
Hagerstown-Martinsburg $680 $144,600 (-0.30%) $152,600 $150,700 $147,800
Washington-Arlington-Alexandria $1,741 $370,400 (+0.70%) $385,200 $383,800 $381,900

Source: National Association of Realtors Q1 2016 Metropolitan Median Area Prices and Affordability report.
*Estimated Monthly Mortgage Payment is based on median home prices for the metro area in Q1 2016 and a 30-year fixed mortgage with today’s rates.

4

How Much You Can Borrow in West Virginia?

If you get a traditional, conventional or Federal Housing Administration (FHA) loan, you should know there is a maximum amount that can be borrowed. FHA limits its loans because it insures the mortgage loan. Unlike FHA loans, conventional loans are not guaranteed or insured by the federal government. However, conventional loans follow the guidelines of government-sponsored enterprises such as Fannie Mae or Freddie Mac. Both FHA and conventional loans have limits due to the potential loss should a borrower default.

Unless you qualify for a “jumbo” loan, there is a limit to what you can borrow in West Virginia. Check the table below for the maximum limits in West Virginia, as they do vary from county to county.

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5

Homebuying in West Virginia: Experts Weigh In

Lisa Cullum

Lisa Cullumis a financial compliance officer for the Parkersburg, West Virginia, Wood County HOME Consortium’s First-Time Homebuyer Program.

Patti

Patti Shamblinhas served as director of loan origination with the West Virginia Housing Development Fund since 1981.

Following the market crash in 2008, how is the housing market in your area right now?

Lisa Cullum

In West Virginia the properties values are between 100,000 and sometimes first-time homebuyers can find a house for even less. (Sales are) picking up the more people become aware of our program I have three families in the process right now this month.

Patti Shamblin

We really have not seen much of a decline at all. We have remained steady, even through the foreclosure era. We didn’t see a big increase in foreclosures. In our work, as a state housing finance agency, we can offer programs that banks and credit unions can’t with down payment and closing assistance. We follow Fannie Mae guidelines, so the maximum we currently allow in financial assistance is $10,000 but the actual amount is based on loan to value. It’s a fixed-rate loan at 2 percent with a 15-year term. It can only be used in conjunction with our homeownership or Moving Up program. We are self-funded, which makes us unique. We are also AAA rated by Standard & Poors.

Any suggestions for improving credit scores before first-timers get into the homebuying process?

Cullum

I would recommend people download the packet on our website and bring it in so we can determine if they’re eligible.

I’d also check with one of our participating banks to make sure they’re eligible for a 20-year mortgage. We’re also going to try to start a new program with a grant that can help with closing costs and down payments. These will be income-based and people will be eligible for a grant up to $10,000.

Another thing people should be doing is paying off their credit cards. And check with the credit companies to be sure their scores are correct. Sometimes you can write letters and ask that things be adjusted on a credit report. Any explanation that can be provided and documented that you would think that would help.

Shamblin

Even if you pay off debt, do not close your accounts. That can actually lower your score when it’s removed from your credit history. Also, pay consistently and try to pay more than the minimum each month. If you see any mistakes on your credit report, contact the reporting agency and get it fixed.

Is there enough affordable inventory to meet first-time homebuyer demand in West Virginia?

Cullum

Right now I haven’t seen a problem with inventory. People have gotten approved and found a home within the week in Parkersburg.

Shamblin

In West Virginia as a whole, existing housing is limited and in particular parts of the state it can be a challenge to find affordable housing in the $75,000 to $150,000 range, so the inventory is very low.

6

How Much Are Closing Costs in West Virginia?

Mortgage closing costs vary for many reasons. From state to state, there are different policies and fees. Average closing costs in West Virginia are 6 percent higher ($1971) than the national average of $1847, according to a 2015 Bankrate survey.

The higher the loan amount, the more fees you incur. Title insurance and taxes are dependent on the loan amount. There also are several third-party fees for services such as the closing, credit report, appraisal, survey and title insurance. (Bankrate’s survey reflects minimal third party costs such as credit report and appraisal fees.) Lender origination fees were just 2 percent higher than national average while third-party fees were almost 11 percent higher.

Click here to get a full explanation of closing costs and what you should expect.

Average Closing Costs in West Virginia

Average Origination
Fees
$1,067
Average Third-Party
Fees
$904
Average Total Closing
Costs
$1,971

Source: Bankrate’s 2015 survey of closing costs.

Refinancing a Mortgage in West Virginia

Nationwide interest rates are close to records lows, making this a great time for most people to refinance. Lowering your rate can help ease the pain of a high mortgage payment. Refinancing can also cut a 30-year mortgage to a 15-year loan, resulting in savings over time.

For a more comprehensive look at mortgage refinancing and to determine if it’s the right time for you, check out see our tools, tips and resources here.

Other West Virginia Mortgage Resources

The West Virginia Housing Development Fund offers lending partner searches, homeownership programs and financial assistance, educational videos, and a mortgage calculator to help you figure out how much you can afford.

The U. S. Department of Housing and Urban Development offers resources to home buyers for state, regional and local home buying programs.

There are several local Habitat for Humanity offices in West Virginia offering housing assistance to those who demonstrate the need for a home, ability to pay a mortgage and willingness to partner in the construction of their home.

The U. S. Department of Agriculture (USDA) offers low- and moderate-income households loans and assistance in obtaining a home in eligible rural areas.

The City of Martinsburg offers homebuyer assistance programs and education for qualified home seekers.

Parkersburg City offers first-time homebuyer programs, low interest loan programs for owner-occupied rehabilitation of the home and low interest loans for new construction. Qualified homeowners could get financial assistance worth up to 40 percent of the overall home cost in Wood County.

The FHA Mortgage Center offers educational resources for obtaining FHA financing.