Mortgage Frequently Asked Questions
1. What is a First Home Mortgage program?
North Carolina offers first-time buyers a 30-year, fixed-rate mortgage with “interest rates that are below or competitive with market rates.” Down payments vary from 0% to 20% of the sale price.
2. What is down payment assistance?
North Carolina provides buyers with as much as $8,000 in the form of an interest-free second mortgage to cover the down payment and closing costs. Borrowers must contribute $1,000. Unless you sell, transfer, refinance or default, payment on the principal isn’t due for 30 years.
3. What is a second mortgage program?
If you’re in the market for a newly constructed home, you may qualify for a $25,000 second mortgage. The maximum amount is $25,000 or 20% of the sale price, whichever is less. There is a $5,000 minimum for this assistance, which targets buyers who earn below the median income.
4. What are mortgage credit certificates?
A mortgage credit certificate helps first-time buyers in North Carolina take their mortgage-interest deductions a step further. Qualifying buyers can claim 30% of their mortgage interest as a tax credit. An MCC can save you a few thousand dollars each year, money that can be put toward your mortgage balance. Although an MCC can be used with many different mortgage products, First Home Mortgage borrowers cannot use an MCC in conjunction with their loan.
5. What does FHA mean?
Unlike conventional loans that adhere to strict underwriting guidelines, FHA-insured loans require very little cash investment to close a loan. There is more flexibility in calculating household income and payment ratios. The cost of the mortgage insurance is passed along to the homeowner and typically is included in the monthly payment. In most cases, the insurance cost to the homeowner will drop off after five years or when the remaining balance on the loan is 78 percent of the value of the property -whichever is longer.
6. What is a VA Loan?
VA offers a variety of home loan guaranty programs for Active Duty Service members, Veterans, and National Guard and Reserve members.
7. What is NC Home Advantage Loan Program?
Home Advantage program is designed to assist all borrowers – your first-time home buyers as well as your move up borrowers.