North Carolina Mortgage Overview
North Carolina falls in the middle of the
states for size, yet is the 9th most populated state. It has 10.4
million residents. It could be due to the low cost of living with the average
home price around $172,000.
If you want to surround yourself with the
beauty of North Carolina, here are your top loan options.
North Carolina conventional loans
Borrowers
with good credit may secure a conventional loan. You need at least a 660+
credit score and a max 36 percent debt ratio. If you've never owned a home a 3
percent down payment is enough. If you've owned a home, you'll need 5 percent
down. Any down payment lower than 20 percent requires Private Mortgage
Insurance. You can cancel it when you owe less than 80 percent of the home's current
value.
North Carolina FHA loans
If you have a lower
credit score, try the FHA loan. You need just a 580 credit score and a 3.5
percent down payment. FHA loans have high debt to income ratio allowances of 45
- 50 percent. You can use gift funds for FHA down payments but may have to contribute
some of your own money if you have a 500 - 579 credit score. Lenders require a
10 percent down payment and 3.5 percent of the funds must be yours.
North Carolina VA loans
Veterans can get 100
percent financing from a North Carolina VA lender. You'll need a 620 credit score
and to prove you can afford the new mortgage plus your existing debts and the
cost of living. VA loans don't require money down. They also don't charge mortgage
insurance. Veterans pay an upfront funding fee, but it's low.
North Carolina USDA loans
If rural living is
on your agenda and your household income is less than 115 percent of the area's
median income, a USDA loan may be a good option. You'll need a 640+ credit
score and a max 41 percent debt ratio. You won't need a down payment. USDA
loans require mortgage insurance for the loan term, but they are affordable.
First-Time Homebuyer
Programs in North Carolina
NC Home Advantage Mortgage
This fixed
rate mortgage with up to 5 percent in down payment assistance. You must
have an annual income of less than $89,500 and a 640 or higher credit score.
You only have to repay the down payment assistance if you sell the home or
refinance the mortgage.
NC Home Advantage Down Payment Assistance
Eligible
borrowers may receive up to $8,000 in down payment assistance.
NC Home Advantage Tax Credit
First-time
homebuyers may get a tax credit of up to $2,000 per year on the mortgage
interest paid. This decreases your taxable income, leaving more money in your
pocket, making homeownership more affordable.
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