Scenic country roads, vibrant small towns and beautiful state parks and forests make West Virginia a great place to live. The Mountain State’s low cost of living is another bonus.
If you’re searching for a home in West Virginia, remember to shop around and compare mortgage rates. What may seem like a small difference could add up to thousands over the course of a 15-year or 30-year mortgage.
- Mortgage debt in West Virginia
- Types of home loans
- Conforming loan limits in West Virginia
- First-time homebuyer programs in West Virginia
- Mortgage refinancing rates in West Virginia
Mortgage debt in West Virginia
Credit Karma members with mortgages in West Virginia had average mortgage debt of $125,896 in 2020, with average monthly mortgage payments of $896.
That puts West Virginia a bit below average for both mortgage debt and average monthly mortgage payments compared to Credit Karma members across the U.S. in 2020.
Types of home loans
If you choose to finance your dream home, you might be overwhelmed with the number of mortgage loan options out there. Here are some of the more common mortgage types West Virginia homeowners may consider.
Conventional loans in West Virginia
Conventional loans are mortgages that aren’t part of government programs. These loans tend to be good for people with solid credit and a down payment of at least 3% to 5%.
West Virginia FHA loans
FHA loans are a good option for first-time homebuyers to explore — particularly if your credit is less than perfect. That’s because you may be able to qualify with credit scores as low as 580 with a 3.5% down payment or 500 with a down payment of 10%. This FICO® score requirement is the FHA minimum standard. In general, additional lender credit score requirements may apply.
The FHA loan limit in 2023 is generally $472,030 for a one-unit property, but it can reach as high as $1,089,300 depending on where you live.
One area in West Virginia has a higher limit.
- Washington-Arlington-Alexandria, DC-VA-MD-WV
You can find the exact limit by county on the U.S. Department of Housing and Urban Development website.
VA loans in West Virginia
If you’re an eligible veteran or service member comparing mortgage rates in West Virginia, a VA loan can be attractive since down payments and mortgage insurance aren’t typically required by the VA, and you may be able to qualify even if your credit isn’t great.
Similar to FHA loans, VA loans are insured by the government but issued by private lenders.
Conforming loan limits in West Virginia
Conforming loans are a type of home loan that meets certain loan limits set by the Federal Housing Finance Agency. This means they can be bought by Fannie Mae and Freddie Mac, federal-government-sponsored enterprises that guarantee mortgages.
Loans that exceed conforming loan limits are known as jumbo loans. Lenders often consider these loans riskier than conforming loans.
Almost all of West Virginia’s counties have a conforming loan limit of $548,250 in 2021. The only exception is Jefferson County.
First-time homebuyer programs in West Virginia
If you’re hoping to buy your first home, there may be some assistance programs available to you in West Virginia.
- Homeownership Program: Offered by the West Virginia Housing Development Fund (WVHDF), the Homeownership Program provides 30-year, fixed-rate mortgages of up to 100% of the home’s purchase price. Eligible borrowers may also pair it with down payment and closing cost assistance of up to $10,000. To be eligible, you must be a first-time homebuyer and meet certain income and purchase price limits. If you go with a conventional mortgage, homebuyer education is also required.
- Movin’ Up Program: While this WVHDF program is for homeowners who would like to upgrade to a new home, you may also qualify if you’re a first-time homebuyer. You can get an affordable loan as well as down payment and closing cost assistance of $5,000 to $8,000, if you’re eligible. You’ll need to meet certain income limits and complete homebuyer education if you take out a conventional mortgage.
- Down Payment and Closing Cost Assistance Program: WVHDF’s Down Payment and Closing Cost Assistance program offers a 15-year, fixed-rate second loan to help cover down payment and closing costs. If you participate in the Homeownership program, eligible borrowers can get a loan of $7,500 or $10,000, depending on your loan-to-value ratio.
Mortgage refinancing rates in West Virginia
If you’re thinking about refinancing your mortgage, keep a few things in mind:
- Break-even cost — Once you know the closing costs for your refinance, you can use any savings on your monthly mortgage payment to calculate how long it will take you to recoup that investment and “break even.”
- Cash-out refinance — Have you accumulated equity in your home that you’d like to convert to cash? A cash-out refinance lets you refinance your home for more than what you owe and get cash in return. But you’ll owe the full amount plus interest and you’ll end up owning less equity in your home, which means less cash in your pocket if you sell in the future.
- Loan term — You also may want to either shorten or extend your loan term. For instance, if you have a 30-year mortgage, you may want to convert it to a 15-year loan. Keep in mind that reducing your term likely means you’re paying more each month — but less in interest over time. Lengthening your loan term may mean you pay less each month, but more interest over the course of the mortgage.