8 Steps to Buying a House in Virginia | How to Buy a House in Virginia

Whether you’re a Virginia native or coming from across the US, the home purchase process can be stressful, but not if you’re prepared! Buying a house in Virginia is a big deal, and we’re excited to walk you through the process. Whether you’re seeking a larger-than-life city like RVA or a more rural community like Glen Allen, you’ll need to know how to buy a house in Virginia.

Virginia was recently ranked #1, according to a study ranking the top states in the US. But we’re not surprised; the cost of living is affordable (100 COLI, which is on par with the national average), the demographics are diverse (61.1% diversity index), and Virginia hosts some of the best cities in the US—yes, we’re talking to those considering living in Richmond, VA! RVA has wonderful neighborhoods, and it's considered one of the best places to move with family.

Buying a house in Virginia is significant, but all states, including the Mother of States, have specific rules and regulations. Here are the steps to buying a house in Virginia and a bit more about what you can expect.

Steps to Buying a House in VA | What to Know When Buying a House

Buying a house in Virginia is a process, but if you prepare correctly, your journey to homeownership can be stress-free and easy.

The requirements to buy a house in Virginia will vary depending on your situation; however, you’ll want a credit score of at least 620 and enough saved for your downpayment and closing costs. Some first time home buyer programs may require you to take a certified ownership financing class.

1. Start Saving | Downpayment, Closing Cost, Possible Renovations, etc.

Buying a home in Virginia will be an added expense, so it’s a good idea to review your finances now and start saving what you can.

Whether you’re a first time home buyer in Virginia or have experience, you’ll need to save an adequate amount of money for your downpayment. Some traditional mortgages require 20% of the home’s purchase price, which would be $237,000 if you bought a home in Virginia for the state's median home price ($447,800). Some mortgages don’t require 20% down, making buying a Virginia house more obtainable.

FHA Loan Virginia Information

More than 91 million people have benefitted from FHA’s financial assistance since its establishment in 1934. The Federal Housing Administration insures FHA loans in Virginia (and everywhere) and is ideal for those with less-than-perfect credit or people struggling to save enough to put 20% down. With an FHA loan, you can put down as little as 3.5% when buying a house in Virginia.

Whether you’re in the place to apply for a conventional loan or opt for an FHA loan, the more money you have saved up, the better. Your monthly payment decreases with the amount you put down.

A few requirements exist to buy a house in Virginia with a conventional loan. Most applicants need to have a credit score of 620 or above; the average credit score in the US is 705. Plus, your debt-to-income ratio must be at or below 43. Putting down 20% is the standard down payment for a conventional loan, but oftentimes, if you’re seeking a loan for a primary residence, you can put down as little as 3-5%. Even if 20% isn’t required, putting down anything below 20% will likely result in you paying for private mortgage insurance (PMI), increasing your monthly payment. The cost of your PMI will depend on your loan program, but typically it’s 0.5% to 1.5% of the loan amount annually. For example, if your Virginia home costs $200,000, and your PMI is 0.5%, you will pay $1,000 per year or roughly $83 per month. Once you’re halfway through your loan term or your mortgage balance is below 78% of the property’s purchase price, you will no longer have to pay for PMI.

Whether you pursue a conventional or FHA loan, your ducks must be in a row! Closing costs, which include expenses like the appraisal, home inspection costs, title insurance, the origination and underwriting of the loan, etc., are a considerable cost not everyone considers in their budget.

Closing costs in Virginia typically cost between 2% and 5% of the property's purchase price. The median sale price in Virginia is $447,800, which would make the closing costs between $8,956 and $22,390.

• Question: What is the minimum downpayment for a house in Virginia?
• Answer: Your minimum down payment will depend on your loan and the price of your home. If you are approved for an FHA Loan, you can put down as little as 3.5%.

2. Check Your Credit | Minimum Credit Score to Buy a House in Virginia

Before buying a house in Virginia, you’ll want to check your credit score and work on getting it up to par before your house hunt begins.

Wondering what credit score you will need to buy a house in Virginia? Your current credit score will be crucial to the VA home buying process. Depending on your loan, the credit score requirement will vary.

Your FICO can range from 300 to 850, with the latter being the best possible score. Anything above 700 is considered good (or average); scores between 740 and 799 are considered significant. If you have a credit score of 800 - 850, that score is exceptional and considered nearly perfect.

If your credit score isn’t as high as you’d like, consider the following before buying a house in Virginia:

• Make timely payments on your loans
• Settle any outstanding credit card balances
• Correct any inaccuracies on your credit report

3. Set a Budget | Determine Debt to Income Ratio

Knowing how to buy a house in Virginia is helpful, but you must first understand what you can afford. Start by determining your debt-to-income ratio; examine your monthly income, including what you spend on bills and what amount goes towards paying off debt.

CNBC says that experts suggest keeping monthly mortgage payments less than 28% of gross monthly income. 28% of Virginia’s median household income ($89,931) is $2,100, meaning the monthly mortgage payment should stay within that range. Buying a house in Virginia is likely one of the biggest purchases of your life, so it's essential to ensure you can afford it.

Pro tip: Your mortgage includes more than just what you borrowed from your lender. Property taxes, homeowner’s insurance, and PMI (if applicable) are typically added to your monthly payment.

• Question: Do you need a lawyer to buy a house in Virginia?
• Answer: It could be beneficial to have a lawyer when buying a house in Virginia, but it’s not required by Virginia law.

4. Get Pre Approved | Approval Process & Finding a Lender

Getting pre-approved before you start looking at houses for sale in Virginia is crucial. Not only does it help you narrow down your search, but it also shows the sellers that you mean business! Here’s what the pre-approval process will look like when buying a house in Virginia.

Find a Lender Your Trust

We recommend applying to multiple mortgage lenders to compare options. If you consult with other lenders within 14 days of your initial credit check, all inquiries within this period will count as one inquiry. For example, if you consult with seven different lenders within 14 days, they would all be considered a single inquiry.

Buying a house in Virginia is a big step, so keeping all your options open is key to securing the best rate possible.

The kind of loan you choose will influence your mortgage interest rate. For instance, conventional and FHA loans are the most common, as well as VA loans (government-backed mortgages designed for veterans and their families). Additionally, USDA loans are available, provided by the U.S. Department of Agriculture, for low- to moderate-income families in rural areas. Each loan type will impact your mortgage rate.

You can’t trust everyone; some mortgage lenders can be misleading and offer an extremely low rate, which may be a red flag. Lenders do this by structuring the mortgages so that you only pay the interest for a set period, but you will eventually have to pay the principal amount. Knowing what to watch out for when buying a house in Virginia is a good idea.

To simplify the process, gather the following information to send to your chosen mortgage lender:

• Bank statements covering the past three months
• Recent pay stubs from your employer
• A driver’s license or passport for identification
• Latest W-2 forms or tax returns
• Statements from investment accounts
• Documents detailing your monthly debt payments
• A gift letter, if applicable (only if a friend or family member is helping with the mortgage or down payment)

5. Shop for Your Real Estate Agent

Before buying a house in Virginia, you must find the best agent possible. Your real estate agent should be located where you plan to buy your Virginia home. Big cities in Virginia, like Virginia Beach, will have more options; RVA has over 36,000 licensed real estate agents ready to serve you.

6. Start House Hunting | Is Virginia a Good Place to Buy a House?

Arguably, the best part of buying a house in Virginia is shopping for one—let’s help you buy a house in Virginia at the right price! Virginia is a lovely state to buy a house, thanks to its many safe neighborhoods and low crime rate (1,930 per 100,000 people).

Everyone has their must-haves and can’t-do-withouts, so making a list of yours is smart. Perhaps you need a big yard for your kids and fur babies, or maybe proximity to a bigger city is a necessity. Regardless, an excellent real estate agent will work tirelessly to meet your needs without budget.

• Question: How much is a house in Virginia?
• Answer: The median sale price in Virginia is $447,800, but prices can vary drastically.

Best Places to Buy a House in Virginia | How to Buy a House in Virginia in the Right City

Virginia is home to 39 cities, 190 towns, 362 census-designated places (CDPs), and 229 incorporated communities, and finding the right one for you can feel overwhelming.

The place you choose to live depends on your wants and needs. However, buying a house in Virginia may be best in one of these areas! Travel & Leisure states that Richmond, Charlottesville, Alexandria, and Fairfax are the best places to live in Virginia overall. RocketMortgage suggests buying property in Salem, Brambleton, or Mechanicsville.

RedFin says Roanoke is the most affordable Virginia city, with a median home price of $225,000. Portsmouth and Lynchburg secured the second and third spots, respectively.

7. Consider First Time Home Buyer Programs Virginia + Virginia First Time Home Buyer Grants

Before becoming an official Virginia home buyer, follow the above steps. If, during your lender-shopping process, you decide one of Virginia’s first time home buyers programs will better serve you than a conventional loan, below is the information you’ll need.

Virginia Housing Conventional

If you’re seeking a low-interest loan with a 30-year fixed rate (unchanged rate), the Virginia Department of Housing guarantees the Virginia Housing Conventional loan. To utilize this resource, you don’t need to be a first-time Virginia home buyer.

Requirements:

• Credit score of 640 (660 to avoid PMI)
• 3% of the house price to put down
• Debt-to-income ratio of 45%

Virginia Housing Plus Second Mortgage - Down Payment & Buyer Closing Costs Assistance Program

Buying a house in Virginia is affordable, but regardless, you will have to pay your down payment. Thankfully, there are ways to help negate these costs.

The buyer and the seller must pay closing costs; the costs and expenses are split in half. This is sometimes negotiable, but that will be between you and your real estate agent.

If you need help with your downpayment, consider the Virginia Housing Plus Second Mortgage, a down payment and closing cost assistance program. The first half of the loan goes towards purchasing the house, and the second half goes towards downpayment costs. Both mortgages are 30-year fixed-rate with no prepayment penalty.

Requirements:

• Must be a first time or repeat Virginia home buyer
• Have an income within Virginia Housing’s income limits
• Qualify within Virginia Housing's sales price and loan limits
• Have at least 1% of the sales price documented and available for use toward closing costs, prepaid items, or reserves (or a combination of these)

First-Time Home Buyer Virginia Qualifications

To be considered a first time home buyer in Virginia, you must have never owned a home or have not owned one in the past three years. However, this is dependent on the region.

Grants to Consider When Buying a House in Virginia

You may qualify for the Down Payment Assistance Grant offered by the Virginia Housing Development Authority; you will not have to pay back your reward!

Applicants must be either first-time homebuyers or repeat buyers purchasing in areas designated as economic opportunity zones. They are required to secure an FHA or Conventional No MI loan through the Virginia Department of Housing. Additionally, household income must fall within the income limits set by Virginia Housing, and the property's sales price or loan amount must meet the standards established by Virginia Housing (refer to the link above for more details).

8. Make an Offer on Your Dream Home

Congratulations, you’re almost a homeowner! Making an offer on your chosen home is an exciting time, and luckily, your real estate agent will likely handle most of it. You may be asked to formulate a compelling letter (which your agent will help you with) to help set a good tone with the seller. Occasionally, an earnest money deposit (1% to 2% of the home’s purchase price) is used to reserve the home essentially and for the sellers to take it off the market because the official offer is in.

If the seller accepts, you will be a homeowner in no time!

Congratulations on Buying a House in Virginia!

Now that you’re a new Virginia homeowner, you’ll need help getting to your new location. If you’ve decided somewhere in the Richmond Metro area is right for you, we have the best Richmond movers ready to help. Contact us at (804) 836-4954 for a free quote.