North Carolina Mortgage & Refinancing

Last Updated on June 5, 2017 by Taylor Welshe

There’s just so many reasons residents of North Carolina don’t want to ever move to another state and why it continues to garner so much attention. First, it boasts of hundreds and hundreds of miles of pristine salt waters. There’s also the breathtaking mountain views and magnificent wooden territories home to some of the country’s best old-growth hardwood trees. All these, plus its many beautiful and charming towns and cities, such as Charlotte, Asheville, and Greensboro, make it a really attractive place to buy a home in. (Source: Livability.com)

It also doesn’t hurt that the cost of living here is slightly cheaper than some of the other places in the nation. (Source: Sperling’s Best Places)

Home ownership in the state

In the Tar Heel State, 65.2% of homes are owned. (Source: U. S. Bureau of Census)

This number indicates that most people here can afford the cost of being a home owner, especially since the median home value is $157,700, as opposed to the countrywide median of $195,300. (Source: Zillow)

This doesn’t automatically mean though that it’s easy to become a home owner. Everyone who wants to make the purchase should understand that it’s one of the largest financial responsibilities they can ever take on. Thus, they need to review all their options and establish whether they can afford to fit in the monthly payments they have to make towards their mortgage into their budget.

Mortgage 101

Mortgages are basically loans taken out to purchase land or real estate property. Lending institutions secure the loan against the property’s value until the borrower pays off the entire debt. In NC, the most common term – the length of time one can repay the loan – is 30 years. However, shorter and longer terms are also available.

In the event that a home owner can’t make the payments on time or can’t keep up with it, the company that financed the purchase can take back – or repossess – the home and put it up for sale so that they can retrieve their money.

Basics of fixed-rate mortgages

There are several different types of housing loans, but most borrowers opt for those that come with unchanging interest rates.

Known as fixed-rate mortgages, their biggest advantage lies on the fact that they have locked-in interest rates. In short, the monthly payments won’t change even if the market performs badly. It provides borrowers with security against inflation. Home owners with this type of housing loan don’t have to worry about their monthly mortgage-related costs suddenly going up.

Understanding adjustable-rate mortgage rate

As the term already suggests, adjustable-rate mortgages (ARMs) have interest rates that can “adjust,” depending on several factors such as inflation, employment rate, as well as foreign and stock markets. If these components perform well, ARM rates most likely will go down. If not, interest rates increase.

The main advantage to variable-rate home loans though is that they have initial lower rates which can run anywhere from one to five years (or more). After this period though, the rates can already move. This is why consumers who only intend to live in the same house for a short period of time take out usually take out this loan.

Assistance in securing and paying off mortgages

In North Carolina, there are several organizations that can help home buyers get a mortgage or existing home owners keep up with their payments.

The North Carolina Housing Finance Agency provides down payment assistance as well as Mortgage Credit Certificates, which help free up income that borrowers can then us for their mortgages. The United States Department of Agriculture Rural Development is another source of aid when it comes to down payments. For refinancing matters, home owners can apply for the Home Affordable Refinance Program.

References:

North Carolina Housing Finance Agency

USDA Rural Development – Single family loans

Home Affordable Refinance Program