West Virginia’s housing market has struggled somewhat since 2010. Housing prices did manage to recover from the worst declines in the country, but lower energy costs, closings and a weaker employment market caused them to fall again in 2014. But that has changed slightly in the last few years. West Virginia’s housing market is linked to its labor market, so improvement in one market will help bolster the other. More jobs created in the state means there could also be improvement in the housing market. According to Zillow, the median home value in West Virginia was $95,300 as of August 2018. Values in the state have increased 3.5% over the past year and may rise another 2.2% in the next year. The state also has a lower mortgage delinquency rate of 1.5% compared to the national average of 1.6%. 

But homebuyers need to brace themselves at settlement time. Closing costs in West Virginia are among the highest in the country. Homebuyers can expect to pay 2 to 5% of their home's value in closing costs. Although many closing costs are fixed, some may be negotiable. Some costs can even be rolled into the loan to minimize out-of-pocket expenses. Because closing costs vary among lenders, homebuyers should compare them, starting with an understanding of the average closing costs across the state.

Average Closing Costs in West Virginia

On average, homebuyers in West Virginia pay $927 in lenders' fees and $1,287 for third-party fees, for a total of $2,213 in average closing costs. That is well above the national average of $2,084 and among the highest in the country. New York, Hawaii and Delaware have the highest costs, all above $2,300. The lowest closing costs are found in Oklahoma, Wisconsin and South Dakota, which are all below $1,850.

West Virginia homebuyers pay an average of $58 for document preparation, $800 for origination fees, $76 for tax services, $542 for a home appraisal, $623 for closing or settlement costs, $25 for a credit report, $10 for flood certification, $100 for courier services and $415 for a survey.

Title insurance fees are not included in these averages because lenders may have a difficult time in estimating them, but these fees can add as much as $1,000 to the closing costs. Prepaid items such as property taxes and homeowners insurance are also not included. These average closing costs are based on a home valued at $200,000, with a 20% down payment. With a median home value of $95,000, many West Virginia homebuyers may pay less.

What Goes Into Closing Costs?

Closing costs in West Virginia can vary among lenders and based on the type and size of property. However, these are the more common closing costs homebuyers will find of a good faith estimate provided by lenders.

The loan origination fee is an all-inclusive fee charged by the lender to cover the cost of processing the loan through funding. The fee is stated in points, with each point representing 1%. Most lenders charge one point for these services. However, homebuyers who wish to negotiate for a lower interest rate can do so by adding points to their closing costs.

Lenders require an independent appraisal of the property to confirm that its value is in line with the listed sale price and the sale price of comparable homes in the area.

In West Virginia, the title company handles the legal aspect of closing escrow. Homebuyers who want their own legal representation in the settlement can hire a private attorney at their own expense, resulting in a settlement/closing fee. 

The homebuyer is required to buy a title insurance policy on the lender to protect it against any title defects that could threaten its position as the top lien holder. The seller is required to purchase title insurance on the buyer to guarantee a clear title on the property.

In West Virginia, tax liens take precedence over first mortgages. Depending on the amount of the down payment and the value of the home, some lenders may set up a property tax impound account, which it monitors to ensure that tax payments are current.

On some properties, lenders may require a survey to ensure the integrity of the property lines in order to avoid any property line issues that might arise.

The Bottom Line

West Virginia's home values may make the state one of the country's most affordable places, but additional expenses like closing costs can add up. The state has the 10th highest closing costs nationally. In order to alleviate any additional stress, homeowners may be able to roll some of these costs into their mortgage loan, so it's always a good idea to explore the options. 

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