Last Updated on June 9, 2017 by Taylor Welshe
One third of the entire land of Virginia is dedicated to agriculture, which is why this industry remains a major economy-booster in the state, although it’s not the only one. With the Pentagon calling it home, it’s easy to see why the military and government service sectors here are extremely powerful. Technology also plays a huge part, seeing as the state has the greatest number of technology professionals in the entire country.
All these, plus the simple fact that The Old Dominion State is really pretty and that it boasts of plenty of cities offering good quality of life, including Arlington, Virginia Beach, and Chesapeake among many others, and one should no longer wonder why it keeps drawing the attention of new home buyers. (Source: Livability.com)
The cost of buying a home
Although the state has a cost of living higher than the national average, this is outweighed not just by its high employment rate, but also its impressive median household income. Home buyers should keep in mind though that the main factor influencing living costs here is housing. (Source: Sperling’s Best Places)
Compared with other states, real estate in VA is slightly more expensive. While the nationwide median home value is $195,300, it’s $242,000 in the state. (Source: Zillow)
This hasn’t stopped consumers from taking the big step towards home ownership though. Statistics show that 67.1% of all residential dwellings in the state are owned and occupied. (Source: U. S. Bureau of Census)
Housing loans for financing a home purchase
In almost all parts of the country, most home buyers have to take out a mortgage in order to finance their purchase. The same goes true for this state. The two primary housing loan types they can choose from include the fixed-rate and the adjustable-rate (also called variable-rate) mortgages.
It’s important to know how to distinguish the two, since the process behind the application of their interest rate can greatly affect one’s overall housing-loan expenditures. It also pays to have the knowledge of the various money-saving strategies that borrowers should implement so they can manage their loan repayment better.
Best candidates for fixed-rate mortgages
Here are a few examples of situations wherein a fixed-rate mortgage makes for a more financially-sound choice:
- For consumers who want the assurance that the interest rate won’t change, no matter what happens to the market.
- For those who want the security that easily-predictable monthly mortgage payments provide.
- For individuals or families who have plans of settling down and living in the same house for a long period of time.
- For borrowers who want to make lower monthly payments and spread their repayment over the course of many years.
It’s also worthy to note that the most of the state’s residents opt for the 30-year fixed-rate loan, which has an average interest rate of 4.31%.
Best candidates for adjustable-rate mortgages
Not everyone will find fixed-rate loans suitable for their needs and preference. Here are the most common reasons why borrowers choose adjustable-rate mortgages:
- Their priorities are to get the lowest possible interest rate, even if only for the first few years of their contract.
- Buyers only plan to stay in the same house for a short period of time.
The state has an average ARM interest rate of 2.88%.
Improving credit score to raise mortgage eligibility
One of the biggest factors determining mortgage qualification is credit score. Despite of the size of a borrower’s income or savings account, if he/she has poor FICO score, it will affect his/her eligibility. Even though they will still qualify, the lenders will regard them as high-risk borrowers, which will then result in a higher-than-necessary interest rate.
This is why home buyers who have a poor credit score rating should first do what they can to bring it higher. This is one of the most effective ways to improve mortgage qualification as well as one’s chances of getting a better interest rate.
Virginia Housing Development Authority
Virginia Department of Housing and Community Development
USDA Rural Development
Home Affordable Refinance Program