North Carolina Mortgage and Refinance Rates

Current mortgage rates in North Carolina

As of Wednesday, June 7, 2023, current interest rates in North Carolina are 7.04% for a 30-year fixed mortgage and 6.43% for a 15-year fixed mortgage.

While mortgage rates have leveled off some since jumping in 2022, today’s higher rate environment still makes housing affordability a challenge for North Carolina homebuyers, and refinances less desirable for homeowners. While mortgage rates are difficult to predict, many housing economists expect them to remain well above their historical lows for the foreseeable future.

Refinance rates in North Carolina

North Carolina borrowers who saw their home equity rise during the pandemic might be interested in refinancing their mortgage as a way to tap those funds. Check out Bankrate’s guide to cash-out refinancing to learn more.

How to find the best mortgage rate in North Carolina for you

Step 1: Strengthen your credit score

Long before you start looking for a mortgage lender or applying for a loan, give your finances a checkup, and improve your standing if needed. This means pulling your credit score and credit reports. You’re entitled to a free credit report from each of the three main reporting bureaus (Experian, Equifax and TransUnion), which you can get through AnnualCreditReport.com.

Step 2: Determine your budget

To find the right mortgage, you’ll need a good handle on how much house you can afford. That’s because a lender could qualify you for more mortgage than you need, or one that would max out your budget and leave no room for unexpected expenses.

Step 3: Know your mortgage options

There are a few different types of mortgages. Many lenders offer conventional loans that require as little as 3 percent down. FHA loans also have a low down payment threshold, while VA loans (for veterans) and USDA loans (for borrowers in rural areas) have no down payment requirement. If you’re in the market for a jumbo loan, check North Carolina’s county-by-county loan limits.

Step 4: Compare rates and terms from several lenders

Don’t settle on the first lender you talk to — rate-shop with at least three different banks or mortgage companies. You can look to your bank or other banks, credit unions, online lenders and local independents to ensure you’re getting the best deal on rates, fees and terms.

Step 5: Get preapproved for a mortgage

As you comparison-shop, keep in mind that getting a mortgage preapproval is the only way to get accurate loan pricing for your specific situation.

Mortgage options in North Carolina

Known for its warm weather and diverse economy, North Carolina is attracting new residents at a dizzying pace. If you’re looking to get a mortgage in North Carolina, there are several options:

• North Carolina conventional mortgages: To qualify for a conventional mortgage, you’ll need a minimum credit score of 620 and a debt-to-income (DTI) ratio no more than 45 percent. If you make a down payment of less than 20 percent, you’ll need to pay private mortgage insurance (PMI) premiums, as well.
• North Carolina FHA loans: If your credit history disqualifies you from a conventional mortgage, you might be able to obtain a loan insured by the Federal Housing Administration (FHA). If you have a down payment of at least 3.5 percent, you could qualify for this type of loan with a credit score as low as 580. 
• North Carolina VA loans: If you’re a veteran or active-duty member of the military, you might qualify for a mortgage backed by the Department of Veterans Affairs (VA). A VA loan doesn’t require a down payment or mortgage insurance, but you do need to pay a funding fee, which starts at 2.15 percent for homebuyers.

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 $15,000. To qualify:

• Your annual income must be $126,000 or less.
• 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.
• You are applying for a qualifying mortgage through a participating lender.

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 $15,000 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.