NC Buyer Guide
Closing Costs Breakdown
for NC Home Buyers
Closing costs catch first-time buyers off guard because they come on top of the down payment. Here is every line item you will see on a NC Closing Disclosure and what it typically costs.
Lender Fees
Origination fee (0 to 1% of loan), discount points if you buy down the rate (1% of loan per point), underwriting fee ($400 to $900), appraisal fee ($500 to $800), credit report fee ($25 to $75). Total lender fees on a $400,000 loan with no points typically run $1,500 to $2,500.
Title and Attorney Fees
Attorney closing fee ($800 to $1,500), title search ($200 to $400), owner's title insurance (optional, $500 to $1,500 depending on price), lender's title insurance (required, $200 to $600). Title and attorney costs in Charlotte typically total $1,800 to $4,000.
Prepaid Items
Prepaid homeowners insurance (full first year, $1,200 to $2,500+ depending on home and location), prepaid property taxes (prorated to the end of the tax year), and prepaid mortgage interest (daily interest from closing to end of month). Prepaids are not fees but actual costs paid upfront that you would eventually pay anyway.
Escrow Setup (Impound Account)
If your lender requires an escrow account, you will fund it at closing with typically 2 to 3 months of property taxes and 2 months of homeowners insurance. This is money that will pay your future tax and insurance bills, not a fee, but it is cash out of pocket at closing.
Total Estimate
On a $450,000 purchase in Charlotte with 10% down, total closing costs including prepaids and escrow setup typically run $12,000 to $18,000. Budget 3% to 4% of the purchase price as a safe estimate. Your Loan Estimate from the lender will give you detailed numbers within 3 days of application.
Frequently Asked Questions
Can I roll closing costs into my mortgage?
Not on a standard purchase loan. Closing costs must be paid at closing from your own funds or covered by seller concessions. Some loan programs allow financing of upfront mortgage insurance premiums, but general closing costs cannot be added to your loan balance on a purchase.
What are seller concessions and how do they help?
Seller concessions mean the seller agrees to credit you a dollar amount at closing to cover your costs. You offer a higher price and ask for concessions back. Effectively you are financing your closing costs at your mortgage rate. Lenders cap concessions at 2% to 9% depending on loan type and down payment.
Is there a way to get a no-closing-cost mortgage?
Yes, but you pay for it through a higher interest rate. The lender raises your rate and uses the premium from the higher rate to cover closing costs. You pay less at closing but more every month for the life of the loan. Compare the breakeven timeline before choosing this option.
How do I compare Loan Estimates from different lenders?
Focus on the Annual Percentage Rate (APR), total closing costs, and cash to close on page 3. The APR incorporates both the rate and fees into one comparable number. Some lenders quote low rates but bury costs in fees. The Loan Estimate format is standardized by federal law for easy comparison.
Questions About the NC Contract?
Nick and Craig have guided hundreds of buyers and sellers through the NC contract process. Call or message us anytime.