The value of a home in South Carolina rose by around 23% last year to over $299K on average. However, this cost is significantly lower than the average U.S. home, at $365K.
Although cost plays a primary role in home purchases, you should consider other factors like mortgage terms. South Carolina residents have average monthly mortgage payments of $1,102, $57 less than the national average.
Understanding the process of purchasing a home can benefit you in the long run. MoneyGeek's homebuyers guide highlights the fundamentals for South Carolinians like you — from applying to closing the deal and staying out of serious debt.
In South Carolina, the average home costs $299K, an increase of 23% in the past year.
Homebuyers must meet the lender's minimum credit score, debt-to-income ratio and income requirement to qualify for a mortgage. Additionally, it is common to make an upfront down payment.
Essential steps to buy a house in South Carolina include identifying preferred areas, verifying mortgage rates, preparing requirements and closing the loan.
Choose an Ideal Location
Location is a critical consideration for homebuyers. The price of your home and mortgage greatly depends on where you decide to live. Factors to consider when choosing the ideal location include the cost of living, accessibility to amenities, the neighborhood culture and recreational spaces.
A real estate agent can help you identify ideal locations and guide you through the home purchasing process. Ask friends and family to recommend real estate agents. MoneyGeek suggests working with an agent who:
- Has a reliable reputation
- Knows the ins and outs of the local housing market
- Conveys ideas clearly
The best real estate agent for you will depend on your house-hunting needs.
The cost of living in South Carolina can vary significantly depending on where you live. MoneyGeek advises taking into consideration the following costs g:
- Auto insurance rates
- Health insurance costs
- Utilities (electricity, water)
- Taxes on income, property, and real estate
- Gas or transportation passes
Use MoneyGeek's cost of living calculator to estimate your monthly expenses as you explore the best places to buy a house in South Carolina.
Residing in a less costly neighborhood has its advantages and disadvantages. Although you can own a home for less, your access to facilities such as health centers, shopping and entertainment may be limited.
Several South Carolina cities offer high-quality houses that won’t break the bank. For example, Parker and Conway are the least expensive cities in South Carolina. Meanwhile, Chester, Gaffney, Cheraw, Laurens and Murrells Inlet are major college towns with reasonably priced options.
Calculate Mortgage Rates
Several factors significantly influence your mortgage cost: the lender, your credit score, your income, interest rates, loan type, terms and size of the loan. You’ll need to shop around and evaluate these factors to obtain the best mortgage rate.
Homebuyers searching for the best place to buy a house in South Carolina have access to various mortgage options. Note that rates, conditions, terms and loan restrictions vary depending on the type of loan.
Identify lenders whose requirements match your credit score, employment record, debt-to-income ratio and gross monthly salary.
The typical interest rates for each loan type in South Carolina are:
- Conventional home loans: 5.8–6.6%
- VA loans: 4.8–6.0%
- USDA loans: 1.0% for modified payment assistance and 3.5% for low-to-very-low-income borrowers
- FHA loans: 4.8–5.9%
Some loans are limited to specific candidates. For example, VA loans are exclusively available to qualified military members. Always check your loan eligibility before applying.
You can use MoneyGeek’s mortgage calculator to help you determine how much it costs to purchase a property in South Carolina. In addition, MoneyGeek’s FHA vs. conventional loan calculator can help you decide which loan type is best for you.
Once you’ve calculated rates, you’ll need to find a mortgage lender. You should evaluate the available lending options in your area if you're a first-time homebuyer or require housing assistance.
Knowing your financial status can save you time and money. Remember, each lender has specific requirements, restrictions and limitations. When evaluating your application, mortgage lenders typically take the following into account:
- Credit score: Although not all loans require a credit score, lenders often favor borrowers with at least a fair credit score.
- Net income: Your income often indicates how likely you are to repay the mortgage.
- Down payment: The amount you can put down lets the lender know whether you're a risky customer.
- Debt-to-income (DTI) limits: Your DTI ratio reveals the percentage of your income that goes toward unpaid debts.
Prepare Down Payment Requirements
Lenders typically require that borrowers make a down payment. The down payment amount will affect your APR. Typically the higher the down payments, the lower the APR and subsequent monthly payments.
Different mortgage types have different down payment requirements:
- Conventional loan: Requires a 20% deposit
- USDA and VA loans: No down payment
- FHA loans: Minimum down payment of 3.5%
Your down payment will impact your monthly expenses. Typically, larger down payments result in lower monthly payments.
Mortgage insurance (PMI) safeguards lenders if borrowers cannot repay their loans. Unlike VA loans, loan programs like FHA and USDA loans require mortgage insurance.
Additionally, conventional loan applicants who put down less than 20% must purchase PMI. After several years of on-time payments, borrowers can sometimes cancel their PMI.
Making a 20% down payment can be difficult for some homebuyers. Fortunately, South Carolina offers down payment assistance programs, including:
- SC Housing Homebuyer Program. Covers loans with affordable fixed interest rates over 30 years and offers down payment assistance.
- SC Housing Palmetto Home Advantage. Together with down payment assistance of up to 4% of the loan amount, the program offers competitive interest rates.
- SC Housing County First Initiative. Borrowers buying a property in specific counties may be eligible for additional down payment assistance of up to $8,500.
The state also offers programs to assist first-time homeowners.
Get Pre-Approved for a Mortgage
Obtaining a mortgage pre-approval is the next step after selecting a lender in South Carolina.
Pre-approval differs from pre-qualification. Pre-qualification does not involve a hard credit inquiry, but a pre-approval often does.
In South Carolina, lenders typically ask for the following when you apply for a mortgage:
- Tax filings
- Proof of income and employment
- Records of assets
- Social Security number
- Records of other expenditures and financial events
- Photo ID
- Bank statements
Find out what your lender requires and prepare the necessary documents in advance.
The lender’s pre-approval letter is usually valid for 30 to 60 days, so only apply for pre-approval when you are ready to buy a home. If the pre-approval letter expires, you must apply for a new one.
The pre-approval letter will tell you how much a lender will let you borrow. Additionally, it shows you're a committed home buyer with the resources necessary to obtain a mortgage. There is no cap on the number of pre-approval letters you can seek, but lenders run a hard credit inquiry that may lower your credit score.
Pre-approval letters typically included the following:
- Loan type
- Loan amount
- Loan term
- Interest rate
- Mortgage repayment each month
While some lenders may utilize the data you provide, others might want additional documentation. Since the pre-approval letter is valid for 30 to 60 days, take advantage of this time to raise your credit profile and determine the most beneficial terms.
Conduct a Home Inspection
A home inspection is an essential step in the home shopping process. An expert third-party home inspection gives buyers information about the home's present state and whether repairs are required. The buyer typically pays for this service.
Always hire a licensed home inspector. Ask your real estate agent, friends and family for recommendations.
Standard home inspections usually examine the following aspects of a home:
- Doors and windows
- Attic, insulation and ventilation
- Basement and foundation
Additionally, special home inspections focus on a house's foundation, mold, wood-destroying organisms (WDO), pests, sewer and hazardous materials.
Although it's not usually a requirement, some cities or counties in South Carolina may insist you conduct an inspection before you buy a property. When choosing a home inspector, look for someone with expertise, education and certification.
Your real estate agent will know whether there are any additional local requirements.
When buying a house in South Carolina, the lender will request a home appraisal that assigns it a dollar value. An appraiser will examine the inside and outside of your potential home and collect data on comparable area properties.
The appraisal price can sometimes be lower than the asking price, which will alert the lender that the home buyer may be overborrowing.
Close Your Mortgage Loan
When you close your mortgage loan in South Carolina, you will pay closing costs. These may include the fees for your credit report, inspection, document preparation, appraisal and legal services.
The process of getting your documents ready for closing can take some time. MoneyGeek suggests preparing important files like:
- Homeowners insurance policy. Protects you from losses to the structure and contents of your home.
- Title insurance policy and survey. Ensures the property is free from liens and can be lawfully owned.
Always read all the paperwork carefully to ensure you don’t overlook details that may cost you money later. Ask an expert or your lender for clarification if you need help understanding any terms.
The following list of closing costs will give you a general idea of what to anticipate:
- Appraisal fee: The sum you pay an appraiser to place a monetary value on your potential house.
- Credit report: A credit reporting service compiles and gives a lender a borrower's financial history.
- Escrow: A borrower's home insurance, real estate taxes and private mortgage insurance, if applicable, are placed in an account set up by the lender.
- Home and pest inspections: You may need to engage a qualified home inspector to assess a property's condition.
- Homeowners insurance: Owners are protected from liability resulting from specific accidents on the property as well as damage to their homes and personal items.
- Prepaid interest: The interest a borrower pays on a mortgage before the loan term starts.
- Recording fee: Some government organizations impose a recording fee for documents that list a borrower's ownership stake in a property and any potential liens against it.
- Title insurance: Protects the lender if a property is lost due to a title defect.
The seller might cover some of your closing costs in specific circumstances. When you make an offer, this seller contribution is typically negotiable. However, be aware that your lender might restrict the amount a seller can contribute to your closing costs.
To purchase a home, you’ll determine the best place to buy a house in South Carolina, research mortgage rates and gather the necessary documents. In addition, you’ll obtain a home inspection and a pre-approval letter before closing on the loan.
Once you are officially a homeowner, you’ll need to make monthly mortgage payments. One way to guarantee a low monthly rate is to make a larger down payment.
In addition, being a homeowner comes with numerous responsibilities, including setting aside funds for emergencies and creating a budget for home maintenance expenses.
South Carolina Homebuying Details
Homebuyers in South Carolina should research neighborhoods, mortgage options and lenders that suit their goals. Your real estate agent can guide you through any additional state-specific steps.
Moreover, you can apply for homeowner assistance programs in South Carolina that can assist you in purchasing a new house.
South Carolina's home prices have been rising as more people move there in search of its renowned seashores, storied cities and reasonably low cost of living.
The SC Housing Forgivable Down Payment Assistance program offers $6,000 that may be applied to closing fees or a down payment. You must satisfy all SC Housing mortgage eligibility standards, including those pertaining to household income restrictions and home purchase price minimums.
A 30-year mortgage with a fixed interest rate of 3.5 percent and up to $10,000 in forgiven down payment assistance was available via the SC Housing Palmetto Heroes Program. However, it was closed in 2022 due to overwhelming demand.
Frequently Asked Questions About Buying a Home in South Carolina
Your homebuying journey in South Carolina may be bumpy if you still have unanswered questions. Here, MoneyGeek provides answers to questions about buying a home in South Carolina.
- SmartAsset. "South Carolina Property Tax Calculator." Accessed October 23, 2022.
- South Carolina State Housing Finance and Development Authority. "Homebuyer Program." Accessed October 23, 2022.
- South Carolina State Housing Finance and Development Authority. "Income/Home Price Limits." Accessed November 23, 2022.
- South Carolina State Housing Finance and Development Authority. "Palmetto Home Advantage." Accessed October 23, 2022.
- UpNest. "7 Cheapest Places to Live in South Carolina." Accessed October 23, 2022.
- Zillow. "South Carolina Home Values." Accessed October 20, 2022.