Overview of North Carolina Mortgages
From scenic coastlines to the Great Smoky Mountains and everywhere in between, North Carolina offers a number of beautifully diverse places to call home. Historically, North Carolina mortgage rates are right in line with national average rates. The state's county-level conforming loan and FHA limits are mostly standard, though there are some exceptions.
|30 year fixed||3.08%||3.13%||-0.04|
|15 year fixed||2.34%||2.34%||0.00|
|30 yr fixed mtg refi||3.09%||3.14%||-0.05|
|15 yr fixed mtg refi||2.38%||2.36%||+0.01|
|7/1 ARM refi||3.63%||3.63%||0.00|
|15 yr jumbo fixed mtg refi||2.56%||2.69%||-0.13|
National Mortgage Rates
Historical Mortgage Rates in North Carolina
North Carolina Mortgage Rates Quick Facts
- Median Home Value: $193,200 (U.S. Census Bureau)
- Loan Funding Rate: 54.31% (CFPB)
- Homeownership Rate: 65.1% (St. Louis Fed)
- Median Monthly Homeownership Costs: $1,314 (U.S. Census Bureau)
North Carolina’s landscape is as unique as its cities. The state’s borders stretch from the Appalachian Mountains to the Atlantic Ocean coastline, encompassing Raleigh’s N.C. State University, Durham’s Duke University, Chapel Hill’s University of North Carolina and Charlotte’s Discovery Place and NASCAR Hall of Fame. It is also one of the nation’s top-10 most populous states.
As for the mortgage market here, North Carolinian buyers can expect mortgage rates that are even with national averages.
A financial advisor in North Carolina can help you plan for the homebuying process. Financial advisors can also help with investing and financial plans, including tax, retirement and estate planning, to make sure you are preparing for the future.
North Carolina Historic Mortgage Rates*
|Year||North Carolina Rate||U.S. Rate|
*The FHFA stopped reporting new data in 2018.
North Carolina Mortgages Overview
Tar Heel State home values are less overall than the rest of the nation, with a statewide median home value of $193,200. This is below the nation’s median of $240,500.
The conforming limits for North Carolina counties are mostly the standard $548,250, with a handful of others that sit at $625,500. There is more variation among the counties’ FHA loan limits, which range from $356,362 to $805,000.
Conforming and FHA Loan Limits by County
|County||Conforming Limit||FHA Limit|
Lenders in North Carolina typically do not have to go to court to foreclose on a home when the owner has fallen behind on payments. Homebuyers in the state will likely get a deed of trust which allows lenders to bypass a judicial foreclosure and instead initiate a power of sale foreclosure by simply hiring a third party to auction the home. While you are probably not planning to buy a home with the intention of going into foreclosure in the future, it is best to be aware of where you stand and what you can expect if your circumstances were to change for the worse.
North Carolina state law requires home sellers to provide buyers with a disclosure form listing details on the property. This list should include information on the plumbing, electrical, water supply source, environmental conditions like asbestos and any homeowners’ association fees and services. The purpose of these disclosures is to protect buyers, but a home inspection is always a smart idea to protect the integrity of the sale. A quality home inspection gives you the peace of mind of knowing your home isn’t harboring any secrets that could cost you thousands down the line.
30-Year Fixed Mortgage Rates in North Carolina
If you are buying a home in North Carolina, the first home loan option you need to be aware of is a 30-year fixed-rate mortgage. Buyers have 30 years to pay off this loan unless they make prepayments or decide to refinance. It is a very reliable option because the interest rate remains the same for the duration of the loan which makes it easier to budget for monthly payments. You can also get a 15-year fixed-rate mortgage which will allow you to pay off your debt quicker and you will pay less interest but your monthly payments will be higher.
The average North Carolina rate for a fixed 30-year mortgage is 2.73% (Zillow, Jan. 2021).
North Carolina Jumbo Loan Rates
North Carolina county conforming loan limits are generally at $548,250 with some variability throughout the state. Three counties – Camden, Pasquotank and Perquimans – have limits as high as $625,500. You can expect higher real estate prices in these areas. If you need to take out a home loan in North Carolina that exceeds the conforming loan limit in that particular county, you will be taking on what is considered a jumbo loan. Conforming loans can be re-sold on the secondary mortgage market and they qualify for normal interest rates. Jumbo loans are riskier for lenders because more money is at stake, as such they come with higher interest rates. Note that jumbo loan rates are currently lower than fixed rates in North Carolina.
The average 30-year fixed jumbo loan rate in North Carolina is 2.52% (Zillow, Jan. 2021).
North Carolina ARM Loan Rates
An adjustable-rate mortgage (ARM) typically offers a lower initial interest rate than a fixed-rate mortgage. That rate is available for one, three, five, seven or 10 years (for a 30 year overall loan). When that initial period ends the rate can increase or decrease once per year. The rate usually increases.
One plus of an adjustable-rate mortgage is that the interest rate can’t suddenly jump to a level that is extremely high. The interest rate is capped at a certain amount, specified in the loan’s terms, protecting you from that scenario. Before deciding on an ARM, though, you should weigh the potential maximum interest rate carefully to see if it’s one that you can afford to pay or not. Oddly enough, however, ARM rates in North Carolina are currently higher than jumbo loan rates and fixed rates.
The average rate for a 5/1 ARM in North Carolina is 2.98% (Zillow, Jan. 2021).
North Carolina Mortgage Resources
Certain North Carolinian homebuyers have a couple options when it comes to funding a home purchase.
The North Carolina Housing Finance Agency offers mortgages that come with down payment assistance for up to $8,000. First-time and move-up homebuyers can both apply for that program, which is called the NC Home Advantage Mortgage™. The NC Housing Finance Agency also provides eligible first-time buyers and military veterans with Mortgage Credit Certificates for up to $2,000 in tax savings per year.
|Resource||Problem or Issue||Who Qualifies|
|North Carolina Housing Finance Agency||Down payment assistance and Mortgage Credit Certificate.||First-time homebuyers, move-up homebuyers and military veterans.|
|USDA Rural Development - Single family loans||Offers payment assistance to increase an applicant’s repayment ability.||Applicants must be without decent, safe and sanitary housing; Be unable to obtain a loan from other resources on terms and conditions that can reasonably be expected to meet; Agree to occupy the property as your primary residence; Have the legal capacity to incur a loan obligation; Meet citizenship or eligible noncitizen requirements; Not be suspended or debarred from participation in federal programs.|
If you live in a rural area of the state, you may be eligible for a loan or grant from the United States Department of Agriculture Rural Development. The USDA has programs across with the nations which target rural communities, with the goal of helping residents obtain affordable housing. It is worth seeing if you qualify for the USDA rural development offers.
North Carolina Mortgage Taxes
North Carolina, like most states, charges real estate transfer taxes. That tax is $1 per $500, or 0.20%. Certain areas may also increase that tax up to 0.4%. In North Carolina, the seller typically pays this fee.
Another perk of being a homeowner is that you can deduct the mortgage interest that you pay throughout the year from your taxable income when you are filing your federal income taxes. This deduction also applies for North Carolina state income taxes, as the state’s rules are similar to the federal guidelines for itemized deductions.
North Carolina Mortgage Refinance
North Carolina homeowners who want to refinance should keep in mind that they are not obligated to work with the lender who issued their original mortgage. They should feel free to compare rates from different lenders.
Homeowners in North Carolina used to have the Home Affordable Refinance Program (HARP) to help them refinance. However, it has now been retired, with the High Loan-to-Value Refinance Option from Fannie Mae taking over.
Best Places To Get A Mortgage
SmartAsset’s interactive map highlights the best counties in the U.S. (and in each state) for securing a home mortgage. Hover over states and counties to see rankings and data points for each region, or use the map’s tabs to view the top counties for each of the factors included in our analysis.
Methodology In order to determine the best places in the country to get a mortgage, our study compared four factors, including overall borrowing costs, likelihood of securing a mortgage, property taxes and annual mortgage payments.
To calculate the overall borrowing costs, we analyzed the expected costs throughout the first five years for a $200,000 mortgage with a 20% down payment, including closing costs. We calculated the ease of getting a mortgage as the ratio of mortgage applications to mortgage originations (secured mortgages) in each county. Annual mortgage payments are a measure of the annual principal and interest payments for a $200,000 loan in that location using average mortgage rates in each county.
Finally, we ranked locations based on these four factors, giving equal weight to each factor. The areas with the lowest average rankings are the best places to get a mortgage.
Sources: Mortgage Bankers Association, US Census Bureau 2018 5-Year American Community Survey, Informa, Bankrate, government websites, SmartAsset