North Carolina Mortgage Calculator | The Ascent – The Motley Fool

June 14, 2022 By admin

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The Sun Belt region has been one of the hottest areas for real estate in recent years, and North Carolina has been an especially strong market. North Carolina has a mild climate compared to many other areas of the country, and has above-average job and wage growth. Combine these things with a relatively affordable cost of living, and it's easy to see why North Carolina has a lot of newcomers and housing demand has soared.
With that in mind, here's a quick guide to the current state of the North Carolina housing market, some important things to know before you buy a home in North Carolina, and some valuable resources and tips for first-time homebuyers. Plus, you can calculate your future mortgage payment with our North Carolina mortgage calculator, which can help you set your budget.
The Sun Belt region has been one of the hottest areas for real estate in recent years, and North Carolina has been an especially strong market. North Carolina has a mild climate compared to many other areas of the country, and has above-average job and wage growth. Combine these things with a relatively affordable cost of living, and it's easy to see why North Carolina has a lot of newcomers and housing demand has soared.
With that in mind, here's a quick guide to the current state of the North Carolina housing market, some important things to know before you buy a home in North Carolina, and some valuable resources and tips for first-time homebuyers. Plus, you can calculate your future mortgage payment with our North Carolina mortgage calculator, which can help you set your budget.
While real estate prices have increased sharply throughout much of the United States over the past couple of years, North Carolina has a particularly hot real estate market in 2022. As of March 2022, the median home value in North Carolina had increased by 26% over the past year, significantly outpacing the 20.3% change in the median United States home value.
Despite the sharp increase in North Carolina home values, it remains a relatively low-cost place to live. The state's median home value of $295,340 is roughly 11% lower than the national average of $331,533. And it's worth noting that North Carolina is a large state, and therefore has a variety of major real estate markets, ranging from major metropolitan areas to beach towns to popular mountain destinations. Here's a look at some of the most significant North Carolina real estate markets and how they're doing:
If you're mathematically inclined and want to know where the numbers come from, we'll walk you through the process. If you're perfectly content to use our North Carolina mortgage calculator, feel free to skip this part. First, the three variables in the calculation:
Now that you're familiar with the variables, here's the mortgage payment calculation formula:

The result of this calculation is your monthly mortgage payment, including just the principal and interest you pay. Depending on the amount of your down payment, you may also pay PMI (private mortgage insurance) and other costs. Your lender will almost certainly require that you pay a proportional amount of your property taxes and insurance along with your monthly payment, and don't forget about your HOA fees, if applicable.
Your mortgage payment isn't the only thing to consider when you buy a home in North Carolina. Here are a few others to keep in mind.
When it comes to real estate property taxes, North Carolina is slightly cheaper than average. The typical North Carolina homeowner pays 0.84% of their home's value annually, so if you purchase a $250,000 home, expect to pay about $2,100 in annual taxes. You'll probably have to pay a few months' worth of taxes as part of your closing costs, and your lender typically requires that you pay a 12th of your anticipated tax bill along with your mortgage payment.
The national average for homeowners' insurance is about $1,300 per year for $250,000 in coverage. In North Carolina, the average homeowner pays just under this amount. In short, for both property taxes and homeowners' insurance, North Carolina is just a little cheaper than the national average. Like with property taxes, your lender is likely to require that you incrementally pay your insurance premium with your mortgage payments, and will pay the annual bill on your behalf to your insurance company.
This isn't a North Carolina-specific rule, but it's worth mentioning. In order to obtain a mortgage, you need to meet the minimum credit standards for whichever loan program you plan to apply for. For an FHA mortgage, this typically means you need a minimum score of 580, and conventional mortgages have requirements of 620 or higher, depending on your income and other qualifications.
This one is especially worth paying attention to if you plan to buy a second home, or if you're planning to buy a primary residence and want to occasionally rent it out. Many homes, particularly in areas popular with tourists like the mountains or beach areas, have rental restrictions that you should be aware of before buying.
Learn more: Home buyer checklist
The North Carolina Housing Finance Agency has an excellent first-time buyers program known as the NC Home Advantage Mortgage. Essentially, this combines fixed-rate mortgages with down payment assistance programs that provide as much as 5% of the home's value. First-time buyers who qualify for the NC Home Advantage Mortgage can also qualify for as much as $8,000 in down payment assistance, structured as a 0% interest, deferred second mortgage eligible for complete forgiveness after 15 years.
Read more: Best mortgage lenders for first-time home buyers
Here are some other questions we've answered:
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