Mortgage Rates in North Carolina

North Carolina mortgage overview

If you want to call North Carolina home, you have access to several mortgage options and first-time homebuyer assistance programs that can make the homebuying process easier and more affordable.

North Carolina conventional mortgages: To qualify for a conventional mortgage, you generally must meet the following requirements.

• Credit score of at least 620
• Debt-to-income ratio (DTI) of no more than 45 percent
• Down payment of at least 10 percent of the loan amount
• Pay private mortgage insurance (PMI) if down payment is less than 20 percent

North Carolina FHA loans: If you don’t meet conventional loan requirements, you may qualify for an FHA loan. These are backed by the Federal Housing Administration, and the requirements include:

• Credit score of at least 500
• 10 percent down payment if credit score is between 500-579
• 3.5 percent down payment if credit score is 580 or higher
• DTI between 31 percent and 41 percent

North Carolina VA loans: Insured by the Department of Veterans Affairs, VA loans are offered to qualifying veterans and active duty members of the armed forces. VA loans don’t require a down payment or PMI, and can be obtained through a VA-approved lender.

First-time homebuyer programs in North Carolina

The North Carolina Housing Finance Agency (NCHFA) offers options to help first-time homebuyers find low-interest mortgages and no-interest down payment assistance loans.

NC Home Advantage Mortgage

With an NC Home Advantage Mortgage, offered through the NCHFA, borrowers can get a fixed-rate mortgage coupled with down payment assistance up to 5 percent of the loan principal. This is available to both first-time and repeat homebuyers. To qualify:

• Your annual income must be under $89,500
• Your credit score must be 640 or higher
• You must be a legal resident of the U.S. and buying a home in North Carolina
• You must occupy the home as your primary residence within 60 days of closing

The NC Home Advantage Mortgage is available for single-family homes, condos, duplexes and townhouses, as well as new manufactured homes if your credit score is 660 or higher.

NC 1st Home Advantage Down Payment

For NC Home Advantage Mortgage borrowers, the NCHFA also offers the 1st Home Advantage Down Payment program, which is specifically for first-time homebuyers (defined as those who haven’t owned a home in the past three years) and military veterans.

Through this program, borrowers can get up to $8,000 to assist with the down payment in the form of a deferred, zero-percent second mortgage. The second mortgage is forgiven in 20 percent increments between years 11 and 15 of the loan term, and completely forgiven at the end of year 15.

NC Home Advantage Tax Credit

The NC Home Advantage Tax Credit allows first-time homebuyers and military veterans to claim a federal tax credit for the interest on their mortgage through a Mortgage Credit Certificate (MCC). The credit is equal to 30 percent of the interest paid yearly for an existing home, or 50 percent of the interest paid yearly for a new-construction home. Borrowers can claim credits up to $2,000 per year through the program.

To claim this credit, borrowers must apply for the MCC through the NCHFA before buying their home.

North Carolina mortgage refinancing

With interest rates at record lows, North Carolina borrowers may be interested in refinancing their mortgage into a new one with a lower rate. Use Bankrate’s mortgage refinance calculator to see how much you can save by lowering your rate.