What Are Closing Costs for Buyers in North Carolina and South Carolina?
Closing costs are the fees and prepaid expenses you pay to complete a home purchase and mortgage, separate from your down payment. They typically include lender and appraisal fees, attorney and title charges, recording fees, and prepaid items like homeowners insurance, interest and an initial escrow deposit for property taxes and insurance. As an early planning estimate, the Consumer Financial Protection Bureau says closing costs often run about 2% to 5% of the purchase price, though your amount can be higher or lower.
The good news is that some or all of your closing costs can sometimes be covered by seller credits, lender credits or builder incentives. Here's what closing costs include in North Carolina and South Carolina, what affects the total, and how to lower what you bring to closing.
I'm Paul Mattos, a mortgage broker with Refine Mortgage, licensed in North Carolina and South Carolina. For the full picture of cash needed, including your down payment, see my guide to how much money you need to buy a home.
What Closing Costs Include
Closing costs fall into two groups: fees for services, and prepaid items that set aside money for future bills.
Loan and Lender Costs
Origination or lender fees, for processing and underwriting your loan
Discount points, if you choose to pay upfront to lower your interest rate
Appraisal fee
Credit report fee
Flood certification and other third-party verification fees
Attorney and Title Costs
In both North Carolina and South Carolina, closings are typically handled by a real estate attorney. Buyer costs commonly include:
Attorney or settlement fees
Title search and title insurance. A lender's title policy is generally required. An owner's title policy, which protects you, is optional but often recommended.
Survey, if you choose one or it's required
Recording fees for your deed of trust or mortgage
Government and Program Fees
FHA loans have an upfront mortgage insurance premium, generally 1.75% of the loan amount, which is usually added to the loan rather than paid in cash.
VA loans have a funding fee that varies with your down payment and whether you've used the benefit before. It can usually be financed, and veterans receiving VA disability compensation are generally exempt.
USDA loans have an upfront guarantee fee that can usually be financed.
Prepaid Items and Escrow
These aren't fees. They're costs you'd pay anyway, collected upfront:
Homeowners insurance, usually the first year's premium
Prepaid interest from your closing date to the end of that month
Initial escrow deposit, a starting balance for your future property tax and insurance bills when your loan has an escrow account
Property tax prorations, which split the current year's taxes between you and the seller based on the closing date
Prepaids are often what surprises buyers most, because they depend on your insurance premium, property taxes and closing date, not just the loan.
Closing Costs in North Carolina vs. South Carolina
The loan side works the same in both states, but a few local customs affect your cash:
North Carolina
Due diligence fee and earnest money. You typically pay these when you go under contract. They're generally credited toward your purchase at closing, but you need the money upfront, and the due diligence fee is generally nonrefundable if you back out.
Excise tax on the deed is paid by the seller, at $1 per $500 of the sale price under state law, not by the buyer.
Property taxes are based on county appraised values and combined county and city or town rates, then prorated at closing.
South Carolina
Earnest money is typically paid when you go under contract and credited at closing. Contract terms vary, so ask your agent what's refundable.
Property taxes depend heavily on whether the home qualifies for the 4% owner-occupied assessment, which you must apply for, and whether it's inside town limits. That affects both your escrow deposit and your monthly payment. See lower property taxes in South Carolina near Charlotte and North Carolina vs. South Carolina property taxes.
In either state, condos, townhomes and many newer neighborhoods may also charge HOA transfer fees, capital contributions or prepaid dues at closing.
What Affects How Much You'll Pay
Purchase price and loan amount. Some costs scale with the price or loan, such as title insurance and points.
Loan type. FHA, VA and USDA have their own upfront fees.
Property taxes and insurance. Higher taxes or insurance mean larger prepaids and escrow deposits.
Your closing date. It changes prepaid interest and tax prorations.
Rate choices. Paying points raises closing costs, while taking a lender credit lowers them in exchange for a higher rate.
HOA. Transfer fees and capital contributions vary by community.
How to Lower Your Closing Costs
Seller Credits
You can negotiate for the seller to pay part of your closing costs. Each loan program limits how much the seller can contribute:
Conventional (principal residence): generally up to 3% of the price with less than 10% down, 6% with 10% to 25% down, and 9% with more than 25% down
FHA: generally up to 6%
VA: seller concessions are generally limited to 4%, though some standard closing costs don't count toward that limit
USDA: generally up to 6%
Seller credits can cover eligible closing costs, prepaids and sometimes a rate buydown, but they usually can't be used for your down payment. See how seller credits can lower your payment.
Lender Credits
A lender credit reduces your closing costs in exchange for a slightly higher interest rate. It can make sense if you're short on cash or don't plan to keep the loan long.
Builder Incentives
On new construction, builders often offer closing cost help or rate buydowns, sometimes tied to using a preferred lender. Compare the total offer, including the rate and price, not just the incentive.
Gift Funds
Family gifts can often be used toward closing costs with the right documentation. Talk to your loan officer before money moves. See using gift funds for a down payment.
Comparing Lenders
Lender fees and pricing vary. Comparing official Loan Estimates side by side, with the same loan amount, rate and lock period, is the clearest way to see differences. See finding the best mortgage rates in Charlotte.
When You'll See Your Closing Costs
Loan Estimate: within three business days of applying with a property address, showing estimated closing costs and cash to close
Closing Disclosure: at least three business days before closing, showing the final figures
Compare the two and ask about anything that changed. The CFPB has a guide to the Closing Disclosure.
Can Closing Costs Be Rolled Into the Loan?
On a purchase, most closing costs can't simply be added to the loan. The exceptions are certain program fees, like FHA's upfront mortgage insurance, the VA funding fee and the USDA guarantee fee, which are usually financed. Seller credits, lender credits and gifts are the more common ways to reduce your cash at closing. On a refinance, closing costs can often be included in the new loan if there's enough equity.
How I Help You Plan
Before you make an offer, I prepare a Total Cost Analysis for that specific home, showing estimated closing costs, prepaids, cash to close and the monthly payment, using real taxes, insurance and HOA dues. I'll also show how seller credits or a lender credit would change your numbers, so you know what to ask for in your offer. You can read what past clients say on my reviews page.
Closing Costs FAQs
How much are closing costs in North Carolina and South Carolina?
The CFPB's early planning range of about 2% to 5% of the purchase price is a reasonable starting point, but your actual costs depend on your loan, taxes, insurance, closing date and any credits.
Does the buyer or seller pay closing costs?
Each side pays its own customary costs, and buyers can negotiate for the seller to contribute toward theirs, within loan program limits. In North Carolina, the seller pays the excise tax on the deed.
Are closing costs the same as the down payment?
No. The down payment is the part of the price you don't finance. Closing costs are separate fees and prepaid items.
Is earnest money part of closing costs?
No, but it's typically credited toward your cash to close. In North Carolina, the due diligence fee is generally credited at closing as well.
Can I get help with closing costs as a first-time buyer?
Seller credits, lender credits and gift funds can help. Some wholesale lenders also offer down payment assistance programs, usually a second mortgage that may be forgivable or repayable, which can sometimes be used toward closing costs. See first-time homebuyer programs.
Know Your Numbers Before You Offer
If you're buying in North Carolina or South Carolina, send me a home you're considering and I'll estimate your closing costs and cash to close before you make an offer. We can talk by phone or video.
Schedule a mortgage consultation or start your mortgage application.
Paul Mattos
Mortgage Broker | Refine Mortgage
Carolina Home Financing
NMLS# 2339069 | Licensed in NC and SC
Call or text: 980-221-4959
Email: paulm@refinemortgage.net
Refine Mortgage Inc. | NMLS# 2417960 | Equal Housing Lender. This article provides general educational information and is not legal or tax advice, a commitment to lend, a rate quote, or an offer of specific credit terms. Closing costs, fees, seller contribution limits and program requirements vary by lender, loan program, property and transaction and may change. Approval, pricing, and program availability depend on credit, income, assets, property, appraisal, and underwriting requirements. Not all applicants will qualify.
