Buying a home can be one of life's most stressful and rewarding events. As you go through the process of buying a home, you will find very quickly that there is a lot involved with the process and plenty of costs you might not have thought of. But before buying a home, you might be asking what all of the costs are associated with buying a home in Virginia Beach.
The costs associated with buying a home in Virginia Beach include the down payment, mortgage closing costs, inspection costs, appraisal fees, homeowners insurance, HOA or Condo Fees, and property taxes. These costs will mostly be before you purchase the home or with your first payment.
Keep reading further as we review each of these costs in further detail below. Also, don't forget about the general maintenance costs of owning a home when factoring in these costs.
Down Payment
In order to purchase a home, you will need to get preapproved with a mortgage lender beforehand. During this process, they will tell you how much down payment you will need to qualify for the loan. The downpayment varies depending on the type of loan you have. If you're doing a VA loan, you aren't required to have a downpayment. Whereas FHA loans typically require 3-5% down, some lender programs offer lower down payments than 3%. Lastly, with a conventional loan, you traditionally will put down 20%, however, similar to FHA loans there are programs with less required for down payment.
Mortgage Closing Costs
When purchasing a house with a mortgage lender, you must pay closing costs at closing. These closing costs are what the lender charges for originating the loan, additionally, there are other fees within the closing costs that are associated with the recording of the deed. Closing costs typically are around 3-4% of the loan amount.
The closing costs vary by loan type and lender, as there are lender programs that offer discounted closing costs. Some lenders also will allow you to put the closing costs into the loan financing so that you don't have to pay upfront. Another way to reduce the closing costs would be to ask the sellers to pay some of your closing costs. This is something that will need to be negotiated within your offer on a prospective house. When it comes to closing costs you want to make sure you speak to both a mortgage professional and your Real Estate agent, so that you understand the cost you will pay.
Home Inspections
When purchasing a home, one of the most important tasks you need to do is to get the home inspected. A home inspection is important as you want to ensure you're aware of any potential issues with the house. When purchasing the inspection, you want to ensure that you're using a licensed inspector for this job. The home inspector will spend 2-3 hours fully evaluating your house, including the plumbing, heat & air, roofing, appliances, and many more. The home inspection price will vary by company, but I would budget $300-$500.
In addition to the traditional home inspections, other inspections can be done before purchasing. If you are getting a mortgage on the property, most likely a termite and moisture inspection will be required.
Home Appraisal
Before purchasing the house, you must get a house appraisal if you're using a mortgage company for your purchase. The appraisal will be completed by a home appraiser that the mortgage company contracts with. The appraiser will tour the house and compare it to other similar properties in the area to determine its actual value. This value will be the maximum amount the bank will approve for the loan.
If the house appraises for less than your offer on the house, you will need to work with your Real Estate Agent to determine a plan of action. The seller and the buyer have the option to agree to a lower purchase price that matches the appraised value. If the seller does not agree to take a lower offer, the buyer can pay the difference out of their own pocket. Additionally, if no agreement can be made, the buyer can decide to walk away from the deal. During this process, paying too much over the appraised value is not advised. You have to make that decision with your agent, but you don't want to have negative equity from the start.
Homeowners Insurance
While you won't have to pay for Homeowners Insurance at closing, you must shop for a policy before closing. Homeowners Insurance is required if you're using a mortgage to purchase. If you're paying with cash for a house, Home Insurance is still highly recommended. Home Insurance protects the homeowner in the event of unexpected damage to your house or property. These events could include fire, storm damage, theft, water damage, etc. When looking for an insurance policy, make sure you speak to an insurance professional, as they will review and find the best policy for your situation.
Homeowner's Association and Condo Fees
When looking for a house to purchase, you must check to see if the property is in a Homeowner's Association(HOA) or a Condo Association. If they're located in one of these, you will have a monthly fee in addition to your mortgage payment. The fee amount will vary depending on each association and what is included in the monthly fees. Before purchasing the house, you need to review the rules and regulations of the individual association. Some associations are stricter with their policies, and you need to make sure you're comfortable with abiding by them before deciding to buy.
Property Taxes
Throughout Virginia, cities and counties can and will charge property taxes to homeowners. These taxes are collected for the cities' and counties' services and expenses. Some of these services would include trash pick-up, police & fire, road maintenance, schools, etc. If you're looking for a home in Virginia Beach, the good news is that the property taxes are the lowest in the region of Hampton Roads. The city of Virginia Beach charges $.99 per $100 of accessed value on the property. Some other cities in Hampton Roads charge as much as $1.21 per $100. Make sure you review this cost when looking at houses to purchase, as many people forget to include this in their budget.
Buying a home in Virginia Beach can be a great experience, and there are many different housing styles to choose from. When purchasing a house, ensure you're working with a real estate professional, but also ensure that you know the costs of purchasing a home upfront.
If there is anything you think I missed or you have any questions about the city, please comment below or reach out to me here.
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YOUR LOCAL REALTOR
DJ Parker is your local Realtor and guide to Hampton Roads, Virginia. As a native of Chesapeake and Virginia Beach, Virginia for over 30 years, he has the local knowledge you need. He has helped clients with Real Estate throughout Chesapeake, Virginia Beach, Norfolk, Suffolk and all of Hampton Roads Virginia.
