North Carolina is home to great barbecue, wonderful universities and a thriving art scene. It continues to attract new homeowners, particularly young professionals, and anyone who wants to buy a home in a state with affordable home values. While the home financing process can seem monumental at first, there is plenty of help available. This page is your step-by-step guide to getting a mortgage in North Carolina.

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Check Mortgage Rates in North Carolina

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Mortgage rates may seem to be all over the map, but key factors drive their variability: Available inventory, buyers’ credit history and down payment. Another critical factor is your credit history (though don’t be discouraged by a spotty credit history — some programs may be able to still get you a mortgage). Also, the prevalence of foreclosures or delinquent payments in an area can affect rates. Fortunately, North Carolina has seen a decline in delinquent mortgage payments over the last couple of years. The state also is drawing younger people in waves, who are buying their first homes. For an overall explanation of what drive rates, visit our guide to mortgage rates.

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First-Timer? Get Homebuying Help in North Carolina

Several programs offer assistance to first-time homebuyers in North Carolina: NC Home Advantage Mortgage: This program offers a fixed-rate mortgage and down payment assistance up to 5 percent of the loan amount. Repayment is forgiven at 20 percent per 10 years, only if the borrower sells or refinances, after 10 years living in residence.

Community Landing: For borrowers with disability, this program offers a variety of loans with little to no money down. They often help by reducing closing costs and allowing higher debt.

Mortgage credit certificate: This allows qualifying borrowers to take a federal tax credit of 30 percent of the mortgage interest paid annually. For an in-depth explanation of the homebuying process, visit our first-time homebuyers guide.

Financial Assistance in North Carolina for First-Time Buyers

Here’s a comprehensive listing of the programs available to first-time buyers in the Tar Heel State:

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Home Affordability in North Carolina

Young professionals have been flocking to parts of North Carolina such as Raleigh, raising the visibility of this southern state. However, you don’t just have to be young to take advantage of excellent rates and home prices. North Carolina has a 66 percent homeownership rate, which means it’s a popular place to own a home, but there is still good inventory available. The median home value is approximately $151,900, with the median sales price at $190,150, but values have appreciated 4.8 percent since 2015. The average household income is approximately $57,380, and on the rise.


How North Carolina Mortgage Rates and Home Prices Affect Monthly Payments

Metro Area Estimated Monthly Mortgage Payment* Q1 2016 (Change from Previous Year) 2015 Median Home Price 2014 2013
Charlotte-Gastonia-Concord $894 $190,300 (+5.90%) $198,100 $193,800 $174,200
Durham $1,056 $224,800 (+14.20%) $222,900 $199,100 $192,700
Fayetteville $780 $166,000 (+14.50%) $116,900 $125,400 $146,500
Greensboro-High Point $664 $141,200 (+2.10%) $151,500 $136,600 $131,000
Myrtle Beach-Conway-North Myrtle Beach $888 $188,900 (+6.70%) $187,900 $177,800 $176,900
Raleigh-Cary $1,097 $233,400 (+6.60%) $238,200 $208,600 $196,900
Virginia Beach-Norfolk-Newport News $931 $198,000 (+4.20%) $209,000 $196,000 $193,000
Wilmington $969 $206,100 (+4.40%) $211,200 $211,400 $207,200
Winston-Salem $659 $140,200 (+1.20%) $147,700 $135,200 $128,700

Source: National Association of Realtors Q1 2016 Metropolitan Median Area Prices and Affordability report.
*Estimated Monthly Mortgage Payment is based on median home prices for the metro area in Q1 2016 and a 30-year fixed mortgage with today’s rates.

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How Much Can You Borrow in North Carolina?

Conventional loan limits are determined by the county where the home is located and are set using the highest median home price within the metropolitan area. But your specific loan limit will also be determined by your income and down payment amounts as well as rules of the county where the home is located, using the highest median home price within the metropolitan area. FHA limits in the majority of counties is $271,050 for single-family home; $458,850 in Currituck and Gates County, $625,750 Caldwell, and $350,750 for Durham County. Use the tool below to view conventional and FHA limits by county in North Carolina.

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Buying a Home in North Carolina: Experts Weigh In

Eleanor Warren

Eleanor Warren Thorne is a digital marketing manager at Equity Resources in Cary, North Carolina.

Jim Enright

Jim Enright is a mortgage strategist at Corporate Investors Mortgage Group in Chapel Hill, North Carolina.

Is this a good time to buy a home in North Carolina?

Thorne

Within the past three years, the real estate purchase market, especially for first time homebuyers has exploded. We see many buyers who are making four to five offers on different houses before they are be able to purchase a home.  Buyers in the under $300,000 range seem to be competing across the state homes that might also be considered move down homes for aging baby boomers.

Enright

The Triangle (Raleigh Durham Chapel Hill) market is strong. More demand than listings available. Homes in the $375,000 range may have multiple over asking pricing offers and go under contract within days.

What do first-time homebuyers need to know about buying in N.C.?

Thorne

We have a ton of first-time homebuyer grant loans and Mortgage Tax Credits through the NCHFA. We also offer several of the “City Seconds” which are available in multiple municipalities across our state. These programs offer down payment assistance that does not have to be paid back (in most cases) if you reside in the home for a longer period of time.  For instance, most NCHFA grants drop off 20 percent a year for years 11 through fifteen.  The larger grants  ($15,000) programs are available through NCHFA, and another round of those grant funds are due to be available later in the 3rd quarter. 

Enright

To be competitive, buyers must be ready to make an offer quickly. This means not only a decision to place the offer, but also to be pre-approved in advance. Most sellers’ agents will require a pre-approval letter with the offer. From the lenders’ perspective, this means a credit report has been pulled, income and assets have been verified, and in most cases an automated approval has been obtained.

Can you qualify for a loan if your credit history isn’t perfect, or you don’t have a down payment?

Thorne

There are many programs that do not require an appraisal. Veterans, for instance don’t have to even have their credit re-pulled; we drop interest rates based solely on their mortgage credit history.  USDA and FHA Loans offer similar programs for streamlined refinances with no appraisals.

Enright

I am a big fan of “no closing cost” and low closing cost loans. When this cannot be done due to competitiveness of the property, the interest rate can be ratcheted up (and) the lender pays additional funds back to the broker, which can be passed on to the borrower to reduce closing transaction costs. This works best with loans in the $250,000-plus range. All of the down payment can be a gift. It is possible through a combination of seller credits and lender credits to pay only the minimum down payment required. On FHA and VA loans, this can be done even without seller credits.

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More on North Carolina Closing Costs

North Carolina closing costs run a tiny bit higher than other states but Jim Enright says closing costs don’t vary in lender fees but “Only in the way of third party fees. For example, attorney’s fees may vary in different counties. In the Triangle (Raleigh, Durham and Chapel Hill) purchase closing costs range from $800 to $975. Refinances are in the $550 to $845 range depending upon the county.” The costs that are not fixed are: attorneys, realtors and other professionals. Closing costs in North Carolina total average is $1,911, compared to the national average of $1,847.In North Carolina, a title attorney is required to be present at settlement. Though lenders will sometimes request pest inspections, home inspections are usually optional. Average origination fee: $1,036. Average third party Fees: $875. Broker fee: $1,084. Appraisal: $421. Attorney: $713. Survey: $620

For a fuller explanation of what closing costs consist of and what to expect, check out our guide to Common Closing Costs.

Average Closing Costs in North Carolina

Average Origination
Fees
$1,036
Average Third-Party
Fees
$875
Average Total Closing
Costs
$1,911

Source: Bankrate’s 2015 survey of closing costs.

Refinancing a Mortgage in North Carolina

According to realty agent Carla Freund, “Many Triangle cities and towns have improved enough to bring them to pre-recession price points,” and other cities have even surpassed those price points, making it a decent time to refinance, though buyers may want to wait just a little bit longer. The “hottest real estate in the Triangle,” she says, includes Cary, Apex, Morrisville, Holly Springs, Fuquay-Varina, Wake Forest and Raleigh. Although interest rates have risen slightly, they are still at historic lows in North Carolina, so that would be a good reason to refinance if you’re in the position to do so. For more comprehensive general information, check out our Refinance Guide.

Further North Carolina Mortgage Resources

These resources may offer additional information for the first-time homebuyer:

North Carolina Foreclosure Fund

For qualified borrowers, this fund can pay your mortgage for up to 36 months while you retrain or find new employment.

Mortgage Payment Program

This program offers one-time assistance to bring a borrower current, short-term assistance while looking for a job, or long-term assistance while borrower participates in approved job-training program.

Principle Reduction Recast/Lien Extinguishment

This program will help a borrower who experiences hardship through no fault of their own: such as medical issues, divorce, or death of co-borrower, and who has since been on a fixed or reduced income, or has mortgage payments greater than 25 percent of their household income. For qualifying borrowers, the program can provide a forgivable, no-interest deferred loan to reduce principle, and can be forgiven after 10 years.

Second Mortgage Refinance Program

For employed borrowers, deferred zero interest loan of up to 50,000 plus all related fees. Must talk to a housing counselor.

Urgent Repair Program

This program is for borrowers with special needs, or elderly borrowers whose income falls below 50 percent of the median income. It can also help those who must make emergency repairs to correct housing conditions that threaten safety, or modifications needed for accessibility reasons

Single Family Rehabilitation Program

This program finances major repairs for qualifying NC borrowers with disability, the elderly, or whose income is below 80 percent of the median of the area.

North Carolina Housing Coalition

Refers people to housing organizations

North Carolina Housing Finance Agency

General information for home buyers, along with specific mortgage programs for first-time homebuyers. A good resource to check the recent good practice rules and regulations, to ensure they are completing a quality program.

North Carolina Health and Human Services

Programs to find and maintain housing, specifically tailored to marginalized and low-income borrowers. Also has resources for people who have been victim to mortgage fraud or need help preventing foreclosure.

North Carolina FHA Expert

How to apply for first time homebuyer grants, with a comprehensive guide on what to expect during the home buying process. There are also guides on how to qualify for certain programs if you are a single parent or are helping someone else buy a home.

Wake.gov

A list of programs that provide emergency funds and rehabilitation grants for needed repairs. The repair programs are tailored to low-income, elderly, and people with disabilities.

Updated: July 27, 2017