You are here: Home / FHA Mortgage Loans / Closing Costs for First Time Home Buyers
First Time Home Buyers in North Carolina know that NOW is a great time to buy a house, and many are busy saving up! Congratulations! The folks we are talking to want to know more about programs that can help them with down payment and Closing Costs for First Time Home Buyers.
The Downpayment part is pretty easy. There are 3 or 4 programs in NC that offer little to no down payment and we covered them in this comparision.
The Closing Costs are a little bit different. The cost of buying a home generally falls within 3 “buckets.” The first part, of course is the downpayment. The second part are the costs associated with the actual Mortgage, these are typically referred to as Closing Costs. Then the final part are the costs associated with the Property, these are generally lumped into the “term” Prepaid Items.
Since everyplayer on your real estate home buying support teamhas a stake in your transaction, it’s a good idea to know how to budget for their services. Understand that some of the Closings Costs are generally paid for BEFORE closing.
In most Cases the estimated fees for each item may have been purposely left – this is because an Inspection of a New Construction 1500 square foot house (for instance) will be substantially different for a 72 year old 3000 square foot rambler that needs repairs!
Common Out Of Pocket Expenses To Budget For:
Home Inspection-
This is usually money well spent since the inspector will evaluate many aspects of your new home to ensure all systems are functioning as they are intended to. Remember – you are paying this person to find problems… so there will likely NEVER be a house that passes with flying colors! I would budget at least $400 for the Inspection of a “regular” home. Using a Real Estate Agent who can help you negotiate any of the Seller Repairs… is obviously to your advantage!
Condominium Questionnaire Fees-
This may be required by your lender, and can take up to 30 days to receive. Fees can range anywhere from $0 to $300 depending on the complex.
Well and Septic Certifications-
If your new home has either of these systems you will want to be sure that they are functioning properly.
Survey-
This document outlines the borders of your property, and the price can vary depending on the size of the lot and if it was actually staked out. A survey is not a requirement for all purchase transactions.
Appraisal –
Depending on your state, loan size, property type, loan program and lender, the appraisal may need to be paid upfront, in addition to the Credit Report. This is normally between $350 and $450
Termite Report –
In North Carolina it is ALWAYS a good idea to get a Termite Report. The VA requires that these reports be included on the HUD-1, but most other programs do not. If there’s evidence of ACTIVE termites, it must be fixed prior to closing.
A typical purchase transaction will involve some, but not necessarily all of these services. It’s important to discuss any other potential out of pocket expenses with your agent and loan officer, since some of these items may not be included on the initial Good Faith Estimate. It’s also important to keep in mind what you want to know prior to the end of your Due Diligence Period, when you might not be able to get Earnest Money back.
The important thing to realize is that the vendors providing these services will expect to get paid whether or not your transaction closes, and they may ask that you pay when services are rendered. A combination of just a few of these fees could easily add up to over $1,000 so it is important to have the funds set aside at the start of the process. If the Seller is paying the Closing costs… you need to address these upfront costs with them.
Do you have more questions about Closing Costs for First Time Home Buyers? Just leave a note below or give us a call!
Looking forBASIC FHA Underwriting Guidelines in NC? We can help!Want to know more about how to purchase a Foreclosed Home in North Carolina? We’d love to talk to you about how to make this work! Please callSteve Thorne, Mortgage Banker in Cary919-649-5058. We haveNC Housing Finance Agency moneyavailable to work withFHA mortgage loanstoo!
Related
About Eleanor Thorne
I see myself differently than most loan officers in the Cary/Raleigh market. As a rare Cary native, I see myself as an expert on the area, on mortgage industry changes & factors that effect rates! I've lived in Cary since 1968 - and I'm second generation "mortgage." I work with my husband, Steve Thorne Mortgage Loan Originator #60596 Equal Housing Lender
Connect with me on
Google+
Reader Interactions
I try and answer all questions :)
FAQs
How Much Are Closing Costs in North Carolina? Closing costs in North Carolina run, on average, $2,766 for an average home loan of $212,894, or 1.30 of the home's price, according to a 2021 report by ClosingCorp, which provides research on the U.S. real estate industry.
How much is the closing cost of a 300000 home in NC? ›
Closing cost stats in North Carolina
| Data | Value |
|---|
| Average home sale price | $200,000 to $300,000 |
| Average total closing cost | $2,802.91 |
| Expected closing cost range | $1,868.61 to $4,204.37 |
| Percentage of closing cost to home sale price | 0.93% to 1.4% |
Jun 18, 2021
Buyer closing costs on a cash sale in North Carolina include attorney fees, courier fees, escrow fees, homeowners insurance, HOA fees, title search fees, transfer tax, and property tax.
Are closing costs different than down payment? ›
Your down payment isn't all you need to bring to the closing table when you buy a home. Closing costs are expenses beyond the down payment, such as appraisal fees, attorney fees and escrow funds, that you pay on closing day. First-time home buyers often underestimate just how much they'll need to pay in closing costs.
What are the biggest closing costs usually paid by buyers? ›
Origination fee (or service fee)
Most lenders charge an origination fee to cover service and administrative costs. This is typically the largest fee you pay to close your mortgage.
Do buyers pay realtor fees in North Carolina? ›
It's traditional for the seller to pay Realtor fees (not just in North Carolina, but all over the country). The amount paid is then divided between the two real estate firms involved in the transaction (the buyer's firm and the seller's firm).
Who pays closing costs in NC, buyer or seller? ›
Both buyers and sellers pay some portion of closing costs, in North Carolina and every state. Sellers typically shoulder a larger financial burden, since they usually pay the real estate agents' commissions.
Who pays property taxes at closing in NC? ›
For example, if the annual property tax for a home is $3,000, and the closing date is June 30, the seller pays $1,500 (3,000 / 365 x 182) and the buyer pays $1,500 (3,000 / 365 x 183). The seller usually pays the property taxes at closing, and the buyer receives a credit for the amount they owe.
Who pays the most closing costs, buyer or seller? ›
Typically, homebuyers pay around 2 percent to 5 percent of the home's sale price in closing fees, while sellers pay slightly more — between 6 percent and 10 percent of the home's price — when you factor in real estate agent commissions.
Can you put closing costs on a credit card? ›
You can pay costs by credit card before closing, not at closing. And the fees must be customary, the types that homebuyers typically pay before closing. The closing cost you put on your credit card may not exceed 2% of the loan amount. For example, if your loan amount is $350,000, you could charge up to $7,000.
You can generally expect the total to be between 1 and 5% of the price you are paying to buy your home. Payment for closing costs can sometimes be financed with your loan, in which case it will be subject to interest charges. Alternatively, you can pay your closing costs in cash, similar to your down payment.
Do closing costs include your down payment? ›
Do Closing Costs Include a Down Payment? No, your closings costs won't include a down payment. But some lenders will combine all of the funds required at closing and call it “cash due at closing” which bundles closing costs and the down payment amount — not including the earnest money.
What are many of the buyer's closing costs related to? ›
Closing costs include various fees due at the closing or settlement of a real estate transaction. Buyers are responsible for most of the costs, which include the origination and underwriting of a mortgage, taxes, insurance, and record filing.
How long does it take to close on a house in North Carolina? ›
The closing phase of residential property sales includes several steps that usually take between thirty and sixty days to complete. If this is your first-time selling property in North Carolina, you may have questions about how closings work and what to expect.
Who pays transfer tax in North Carolina? ›
The tax is paid by the seller, although some or all of the tax could be passed on to the buyer, depending on economic conditions (question 4 below discusses this issue). County commissioners determine how the proceeds of the tax are used.
Who pays for deed preparation in NC? ›
In North Carolina, the seller is responsible for paying commission per their agreement, as well as preparation of the deed and revenue stamps per the standard Offer to Purchase and Contract.
