A Step-by-Step Guide to Buying a Home in West Virginia 

Becoming a homeowner is a milestone achievement for many people and is the result of months or sometimes years of hard work and preparation. But buying a home doesn’t have to be stressful. We’ll help you understand the key steps involved so you can move through the home buying process with confidence.

1. Assess your finances. Before talking with a mortgage loan officer, you should review your finances. Inspect your credit reports from Equifax, Experian, and TransUnion—you’re entitled to one free report per year from each bureau—and make sure your credit is in good shape. WVHDF programs require a minimum credit score of 620, but other lenders may have different qualifications. If you don’t meet your lender’s credit score minimum, you’re not out of the game yet. Ask for a referral to a HUD-certified financial counselor to help you get your credit back on track.
   
   Aside from credit, you’ll also need to consider your income and expenses. Add up your monthly income, including any money you make from side hustles or odd jobs. Next, list all your fixed expenses, such as your housing costs, student loans, and other debt payments, as well as your variable expenses, such as groceries or transportation costs. Make sure you have room in your budget to afford not just your monthly mortgage payment, but also other costs of homeownership such as maintenance, property taxes, and homeowners insurance. Be sure to leave some room in the budget for emergencies and fun.
   
2. Get prequalified or preapproved. After you assess your finances, you should meet with a lender to determine what you can afford within your budget. A lender may give you a quick estimate based on an overview of your finances, called a prequalification. However, we suggest buyers have preapproval. This requires a more in-depth look at your finances. The lender may ask to see your pay stubs and tax returns, bank and investment statements, and information about debt. You’ll also want to disclose any buy now, pay later payments coming out of your accounts, such as Klarna or Afterpay. Lenders will consider these payments and your credit history in determining your loan worthiness.
   
   While prequalification can help you get an idea of what you can afford, preapproval will strengthen your position with sellers and show that you’re serious about making a purchase.
   
3. Start shopping. Now comes the fun part! Make a list of must-haves in your new home, such as the location, number of bedrooms, and other essentials. Also, make a list of things that would be nice to have but aren’t deal breakers. With these lists in mind, work with a real estate agent (encouraged, but not required) to visit homes that fit your budget. Evaluate the home’s location, layout, and condition.
   
   It may take some time to find a home that’s right for you. The housing market changes all the time. Just because the right home isn’t for sale right now doesn’t mean it won’t hit the market next month. You are making a huge financial and time investment in your home, so you need to feel confident in your decision. Your real estate agent can help guide you and adjust your expectations.
   
4. Make an offer. Once you find that right home, you will work with your agent to submit an offer to the sellers. This offer will include how much you want to pay for the home (this amount can be lower than the asking price but should be based on market value and your budget) and contingencies such as home inspection, appraisal, and financial approval. Your offer can also ask the sellers to cover all or part of the loan’s closing costs. More on that in Step 7.
   
   Once they receive and review the offer, the seller can accept your offer outright, open negotiations with a counteroffer, or simply reject your offer. If the seller counteroffers, you can accept the counter or come back with your own counteroffer. This can continue until you and the sellers reach an agreement or the seller rejects your offer.
   
   If the offer is accepted, you will begin the mortgage application process. More on that below. In the meantime, you will need to schedule a home inspection to uncover any potential repair issues before closing. You have options if the inspection reveals numerous or costly repairs. You may ask the seller to cover the costs of those fixes, you can pay for them yourself, or you can walk away from the deal. 
   
5. Apply for a mortgage. After your offer is accepted, you will work with your lender to complete your mortgage application. Your lender will verify the details and may require extra documentation. The lender will also order a property appraisal to ensure that the home’s value aligns with the sales price.
   
   If the home appraisal comes in low, meaning the appraiser has determined that the value of the home is less than the sales price, you can ask the seller to either come down in price to match the home’s appraised value or to make up the difference themselves. If the seller is unwilling to do that, you can walk away from the deal.  

Once your offer is accepted and you apply for a mortgage, you’ll want to contact an insurance agent about getting your home insured. You will be required to show proof of insurance to the lender and at the closing table.

6. Underwriting. Your application will be reviewed by an underwriter, who will focus on what we call the “Three C’s:”

• Capacity: Can you afford the payments?
• Credit: Do you have reliable credit history?
• Collateral: Is the home’s value sufficient to support the loan amount requested?

Borrowers should not open new lines of credit during this process, as changes in your finances could cause delays and jeopardize approval. Wait until after the loan is closed to take on new debt or make any changes to your finances. 

7. Loan approval and closing. Once the underwriter determines your application meets the Three C’s, your loan will officially be approved. You’ll receive a Closing Disclosure that shows the loan terms, interest rate, monthly payment, and closing costs. It is important that you review everything carefully and ask about anything that you don’t understand.
   
   Your lender will schedule a meeting with the closing attorney and the sellers. Prior to the meeting to close your loan, the attorney will conduct a title search on your property to ensure that there are no unknown liens or claims against the property and to determine the amount of property taxes and that they are paid up to date.
   
   Be prepared to sign a lot of paperwork! Also, be sure to bring your identification and a cashier’s check if you’re paying anything toward the down payment and/or closing costs.
   
   After you and the sellers sign the paperwork, the loan is officially closed. You are now a homeowner! Congratulations!
   
   Down Payment and Closing Costs Assistance Options
   The amount of your down payment and how much your closing costs will be are a function of the type of mortgage you obtain and the lender that you get it from. These amounts are the highest out-of-pocket costs that you will have when you purchase your home, and often, first-time buyers are unaware of these up-front costs and are unable to pay them. But there are a few options to help. One is the Fund’s Low Down Home Loan. This is offered exclusively to borrowers using our Homeownership or Movin’ Up mortgage programs. This loan offers up to $12,000 toward the borrower’s down payment and/or closing costs.
   
   Another option to help is a gift. Your lender can offer you guidance here, but generally, a gift from a family member can be used to cover your down payment. Your lender will provide you with a gift letter that details where the money came from and stipulates that it is a gift and not a loan to be repaid.
   
   In some situations, your seller can be induced to give you a credit that can cover some or all of your closing costs. Discuss this with your real estate agent if paying closing costs is a challenge for your pocketbook.
   
   Other lenders may offer no down payment options. Work with your lender to find the program that is right for you and your budget.
   
8. Move in and maintain your investment. After closing, you should set up utilities in your name. Changing the exterior locks is always recommended. Keep track of your mortgage and utility payments to ensure you make your payments on time each month. Note that if your mortgage payment includes property taxes and homeowners insurance (escrow), changes to these payments may cause your monthly mortgage costs to fluctuate from year to year. If escrow is part of your mortgage, your lender will pay the taxes and insurance on your behalf.
   
   Maintain your home by budgeting for maintenance and repairs. You won’t have a landlord to fix the furnace or maintain the yard. That’s your responsibility as the homeowner. If you’re not handy, you should ask your new neighbors for references for local professional service providers, such as electricians or plumbers, who can help you out. 

Help Is Available at Every Step

It may sound daunting, but the home buying process is not something to fear. You’ll have the ear of experienced professionals along the way, including your loan officer and your real estate agent. These professionals are there to serve you and answer your questions, so you should not hesitate to tap into their expertise when you’re feeling unsure.  

The West Virginia Housing Development Fund offers resources for first-time and repeat homebuyers. Learn more about our Homeownership and Movin’ Up mortgage programs and the Low Down Home Loan in the Single-Family Programs and Resources section of our website. 

When you’re ready to tackle the home buying process, give us a call at 800-933-8511 or use the Find a Lender database to locate a WVHDF partner lender in your area.