When it's time to settle down in South Carolina and buy that first home, you can tap an array of state and federal programs available to help first-time homebuyers get the key to their new house in the Palmetto State. This guide highlights these programs, where to turn for down payment assistance, how to get help with closing costs and even how to secure refinancing later down the road to save money on monthly payments.
Check Mortgage Rates in South Carolina
Record-low mortgage rates in South Carolina make it as good a time as any for first-time homebuyers to dive into the housing market. A 30-year mortgage for a South Carolina resident with a credit score of 740 or greater was recently available for as little as 3.375 percent at a fixed rate. A 15-year mortgage was 2.75 percent. Beyond historically low interest rates, first-time buyers can also count on a $2,000 federal tax credit for the life of their mortgage. As with any loan, the actual rate quote a first-time buyer receives in South Carolina will also be based on credit history and monthly income.
South Carolina residents can review their credit history annually for free from any of the three primary credit reporting companies: Experian, TransUnion and Equifax. Review your reports carefully and contact the reporting companies in writing to dispute errors. A high credit core is key to getting the lowest possible interest rate on a mortgage. This can save thousands of dollars over the life of a home loan. Learn more about the factors that drive mortgage rates.
Mortgage Help for First-Timer Homebuyers in South Carolina
The South Carolina Housing Finance and Development Authority (HFDA) offers several mortgage products at competitive interest rates to help first-time homeowners buy a house. Financial assistance with the down payment is also available and based on household income. You'll need a credit score of at least 640 to qualify for this assistance from the HFDA. These loans and mortgages are government backed.
The state agency raises money by selling bonds, using the proceeds to finance mortgages originated by commercial lenders licensed in South Carolina. The agency guarantees the mortgages and uses homeowners' monthly mortgage payments to repay bond investors.
The South Carolina HUD office also offers loan programs for new homeowners. These federally-backed loans are available to South Carolina residents who have not owned a home in at least three years and who meet certain income levels, which vary by locality.
Certain South Carolina state employees and residents are eligible for homebuying assistance. These groups include law enforcement officers, correctional officers, teachers, firefighters, nurses, veterans and EMS personnel.
Financial Assistance in South Carolina for First-Time Buyers
Both state and federal agencies offer financial assistance and government-backed mortgage loans to South Carolina residents. Here's a list of resources in the Palmetto State.
Find a Housing Counselor in South Carolina
Understanding Home Affordability in South Carolina
Home prices vary throughout South Carolina and depend on local economic conditions. Local programs frame eligibility based on local economic conditions. For instance, Greenville, S.C., defines low-income housing targets as families earning no more than 30 percent of area median income, which is $58,000 annually in Greenville. Moderate-income housing targets households earning 30 percent to 60 percent of the median.
Lenders may originate a South Carolina mortgage based on up to 33 percent of the buyer's monthly income, with the required downpayment.
The Affordable Housing Coalition of South Carolina offers periodic education seminars throughout the state for prospective homebuyers, real estate professionals and government staff to map out efforts that create affordable housing.
How South Carolina Mortgage Rates and Home Prices Affect Monthly Payments
|Metro Area||Estimated Monthly Mortgage Payment*||Q1 2016 (Change from Previous Year)||2015 Median Home Price||2014||2013|
|Charleston-North Charleston||$1,130||$240,500 (+6.70%)||$240,800||$228,200||$221,700|
|Myrtle Beach-Conway-North Myrtle Beach||$888||$188,900 (+6.70%)||$187,900||$177,800||$176,900|
Source: National Association of Realtors Q1 2016 Metropolitan Median Area Prices and Affordability report.
*Estimated Monthly Mortgage Payment is based on median home prices for the metro area in Q1 2016 and a 30-year fixed mortgage with today's rates.
Determine How Much You Can Borrow in South Carolina
in South Carolina, conventional and FHA loan limits are usually set in place annually. Here's a breakdown of the lending limits, which vary by South Carolina county.
Experts Discuss Homebuying in South Carolina
Clayton Ingram is manager of research and communication for the South Carolina Housing Finance and Development Authority.
Juliana Harris is senior communications coordinator for the South Carolina Department of Consumer Affairs.
What's the biggest thing first-timers overlook when they're ready to buy a house?
Credit scores. Be sure to check them at least a year in advance of applying for a mortgage. The other thing that catches people off guard is the downpayment. We provide downpayment assistance everywhere in South Carolina. For that you need to be a state resident and have a credit score of 640 and up. There are also some income limits that are different in different parts of the state.
Make sure you're budgeting. Financial literacy is not the easiest thing and a lot of people may not know if they're even ready to buy a house. Most people are trying to consolidate debt and debt is a huge factor when you're applying for a mortgage. Just getting your debt level down might take a lot of people 24 to 36 months before can get really serious about buying a house. So getting started early on debt reduction is important.
What's the best way to repair damaged credit so a new homebuyer can qualify for a mortgage?
Go over your credit reports early, at least a year before you're ready to start looking at houses. If there are mistakes, get them corrected as soon as you can.
Anything accurate on the report is going to stay on that report until it's paid off. If time limits have expired - after about 7 ½ years - a negative item should fall off the report. If you dispute something, in South Carolina the credit agencies they are required to provide you with the investigation note and proof of the debt, or it has to come off your report. If they don't, you can file a complaint with our department. The credit agencies have to do their due diligence and only include legitimate debts.
What's the single greatest obstacle to home ownership in South Carolina?
This is a good time to buy because there is good inventory and rates are low, but home prices are rising statewide. There are plenty of buyers but some places the inventory is low, especially in the northwest part of the state.
Home affordability doesn't seem to be an issue if you have good credit scores and can show an income that's enough to cover all your expenses and a mortgage payment every month. The mortgage brokers we work with aren't going to make a loan for more than say 30 percent of your gross monthly income. We license and regulate mortgage brokers, so they're required to provide us with their sales figures, and these have been going up for a couple of years now.
Don't Forget South Carolina Closing Costs
While mortgage rates are low, South Carolina ranks on the upper end of the scale among states with the highest closing costs, according to a Bankrate.com survey. Here's a breakdown on the average fees you can expect to pay on closing day in the state:
Average Closing Costs in the Palmetto State
Source: Bankrate's 2015 survey of closing costs.
More information on how lenders set closing costs can be found here.
Mortgage Refinancing in South Carolina
Current conditions for refinancing a home are prime in South Carolina while interest rates remain at record lows. The state's Home Affordable Refinance Program (HARP) offers income-based refinancing assistance and a simple online application form that can be completed in about two minutes. Daily refinance interest rates offered through the program for South Carolina are posted daily on their portal. HARP is a division of the Federal Housing Finance Agency.
Refinance quotes are available at no cost through most mortgage lenders in South Carolina. Many also offer incentives such as skipping an appraisal and the associated fee.
For more general information on the mortgage refinancing process, check this MoneyGeek guide.
Additional South Carolina Mortgage and Housing Resources
Offers first-time homebuyers competitive interest rates on a mortgage as well as down payment assistance.
Federal assistance with homebuying from HUD.
Additional listings of financial help, mortgage programs for the new homeowner.
Low-interest loans and closing assistance for first-time homebuyers.
Calculators and other tools for estimating mortgage payments at different loan amounts and interest rates.
The first step to preventing a foreclosure action in South Carolina is understanding how the legal process works. This site is the place to start learning.
Teach public school in South Carolina? Information on financial assistance and loans for a new home purchase can be found here.
Offers five-year loans up to $4,000 to cover closing costs on a home purchase in economically distressed areas of South Carolina.
Financial help up to $6,000 toward the qualifying purchase of a newly constructed house. Offered through The Homebuilders Association of South Carolina.
Help with housing costs and utility bills from this state agency.