Buying in Fayetteville and not sure how much cash you need at closing? You are not alone. Closing costs and prepaids can sneak up on first-time and military buyers if you do not know what is included. In this guide, you will learn what you will likely pay in Cumberland County, how North Carolina customs work, what changes with VA or FHA loans, and how to build a simple, realistic budget. Let’s dive in.
Closing costs vs prepaids
Closing costs are one-time fees to get your loan and transfer ownership. They include things like lender fees, the appraisal, title services, attorney fees, and county recording charges.
Prepaids and escrow deposits are different. These fund your future bills, like homeowners insurance and property taxes, and include prepaid interest from your closing date to your first mortgage payment. Lenders often collect several months of taxes and insurance to start your escrow account.
As a planning rule, buyer closing costs often total about 2% to 5% of the purchase price. Prepaids vary with timing, taxes, and insurance and can add several hundred to a few thousand dollars on top. For a personalized estimate, review your lender’s Loan Estimate, which the CFPB explains in plain language.
Typical buyer fees in Fayetteville
Loan-related fees
- Origination or application fee. Charged by the lender to process your loan.
- Underwriting or processing fees. Flat lender charges for evaluating your file.
- Appraisal. Commonly several hundred dollars depending on the property.
- Credit report and flood certification. Small lender pass-through fees.
- Discount points. Optional, if you choose to buy down your interest rate.
Title, settlement, and recording
- Lender’s title insurance. Typically a buyer cost when you have a mortgage.
- Owner’s title insurance. In many North Carolina deals the seller often pays this, but it is negotiable.
- Title search, attorney, and settlement fees. North Carolina commonly uses an attorney or title company to handle closings. Fees vary by firm.
- County recording fees. Paid to record the deed and mortgage. Buyer often pays to record the mortgage. Confirm exact amounts with the Cumberland County Register of Deeds.
Inspections and reports
- Home inspection. Typically buyer-paid before closing.
- Wood-destroying insect (termite) inspection. Common for VA loans.
- Optional inspections. Radon, roof, sewer, or other specialty checks if you choose.
Program-specific and government fees
- VA funding fee. A one-time fee for most VA loans that can be financed or paid at closing. Learn how it works from VA’s funding fee and closing costs guide.
- FHA mortgage insurance. FHA loans include an upfront and annual mortgage insurance component. See HUD’s overview of FHA mortgage insurance premiums.
Prepaids and escrow deposits
- Prepaid interest. Interest from closing day to your first payment.
- Homeowners insurance. Usually the first year’s premium paid at or before closing.
- Initial escrow for taxes and insurance. Several months collected to seed your escrow account.
Who pays what in North Carolina
Customs vary by county and are negotiable in your contract, but here is what you can expect in many North Carolina transactions:
- Attorney-managed closings are common, and you should expect attorney or settlement fees. For agency and consumer guidance, visit the North Carolina Real Estate Commission.
- Sellers often pay the owner’s title policy, while buyers typically pay the lender’s title policy and their own loan-related fees.
- Buyers often pay to record the mortgage. Allocation of deed recording and excise or transfer fees can vary by contract.
- Real estate commission is commonly paid by the seller from sale proceeds.
Your agent and closing attorney can confirm how each item is handled in your specific offer.
Local Fayetteville checks that impact cost
- Recording fees. View current requirements and ask about fee schedules with the Cumberland County Register of Deeds.
- Property taxes and due dates. Check the tax bill and payment schedule with the Cumberland County Tax Administration. These dates affect how many months of taxes your lender collects for escrow.
- Flood zones. Parts of Fayetteville sit near the Cape Fear River. Lenders require flood insurance if a home is in a special flood hazard area. Search the FEMA Flood Map Service Center for the address.
- Military relocation timing. PCS schedules can influence when you close and how you budget for cash to close. For moving benefits and checklists, visit Military OneSource’s PCS move hub.
Estimate your cash to close
Start with your lender’s Loan Estimate and confirm final figures on the Closing Disclosure. The CFPB’s Closing Disclosure guide explains how to read it.
Step-by-step checklist
- Ask your lender for a Loan Estimate that breaks down all fees, prepaids, and escrows.
- Request an itemized estimate from the closing attorney or title company for title insurance, settlement fees, and county recording costs.
- Pull the property’s tax details with Cumberland County to estimate escrow deposits for taxes.
- Get a homeowners insurance quote and ask how many months will be collected at closing.
- Confirm any VA funding fee, FHA upfront MIP, or other program-specific charges with your lender.
- Add buyer-paid inspections, and a survey if needed.
- Compile everything: down payment, closing costs using the 2% to 5% rule of thumb, plus prepaids and escrows.
Example for a $300,000 purchase
Assume a conventional loan on a $300,000 single-family home in Fayetteville. These numbers are for illustration only; your lender will provide actual figures.
- Estimated closing costs at 2.5%: about $7,500
- Estimated prepaids and initial escrows at 1.2%: about $3,600
- Total cash to close excluding down payment: about $11,100
If you use a VA loan with no down payment, your closing costs can still fall in the 2% to 5% range, and a VA funding fee may apply unless you are exempt. FHA loans include upfront and annual mortgage insurance, which changes your totals. Always rely on the Loan Estimate first, then the final Closing Disclosure before you wire funds.
Ways to reduce cash to close
- Ask for seller credits. Your agent can negotiate closing cost help within program rules, especially common with VA buyers subject to VA limits.
- Compare lenders. Origination and processing fees vary, and some lenders offer credits for a slightly higher rate.
- Shop insurance. Different carriers may quote different premiums, which affects both prepaids and your monthly payment.
- Time your closing. Closing late in the month can reduce prepaid interest in some cases.
- Prioritize must-have inspections and discuss optional ones with your agent based on the home’s age and condition.
Get help from a local expert
You deserve a clear plan, especially if you are buying on a PCS timeline or purchasing your first home. As a military relocation and neighborhood specialist, Stacey Prevette will walk you through your Loan Estimate, local fees, and negotiable items so you know exactly what to expect before you go under contract. Schedule a free consultation and let’s build your budget together.
FAQs
What are average buyer closing costs in Fayetteville?
- Many buyers plan for about 2% to 5% of the purchase price for closing costs, plus several hundred to a few thousand dollars for prepaids and escrows, then confirm numbers with a lender.
How do VA loans change what I pay at closing?
- VA loans may include a one-time funding fee that can be financed or paid at closing, and sellers can contribute to certain buyer costs within VA rules; review details at the VA’s page on funding fee and closing costs.
Are prepaids the same as closing costs?
- No, closing costs are one-time transaction fees, while prepaids fund ongoing items like prepaid interest, homeowners insurance, and initial tax and insurance escrows collected by your lender.
Who usually pays owner’s title insurance in North Carolina?
- In many NC transactions the seller often pays for the owner’s policy while the buyer pays the lender’s policy, but this is negotiable and should be addressed in your offer.
How can I avoid surprises right before closing?
- Ask for a Loan Estimate early, review your final Closing Disclosure carefully, and verify county recording fees, tax escrows, and insurance premiums with your closing team; see the CFPB’s Closing Disclosure guide.
Do I need flood insurance for a home in Fayetteville?
- Lenders require flood insurance if the property is in a mapped special flood hazard area, so search the address on the FEMA Flood Map Service Center and confirm requirements with your lender and insurer.