South Carolina Mortgage Rates

Living in South Carolina

South Carolina boasts beautiful beaches and coastal islands, art festivals, such as Spoleto, and bustling, historic cities, including Charleston and Columbia. In short, there are plenty of reasons to call South Carolina home, which may be why home prices are on the rise in the Palmetto State.

The real estate market varies widely in different parts of South Carolina. In Columbia, the state capital, the difference between listing and selling prices is narrowing. For example, in November 2018, the median list price was $150,000, while the selling price was $133,450. By contrast, the median listing price the year before was $140,000, and the selling price was just $78,000.

Home prices are also up in Charleston, where housing inventory is low by historical standards. An average single-family home in the Charleston area sold for $275,000 in March 2019, up from $257,580 in March 2018.

Across coastal South Carolina, which includes Charleston, home prices were up 8.4% in the first quarter of 2019, increasing to $240,000, while closed sales were down 3.9%. The average home along coastal South Carolina stayed on the market for 150 days in 2018, but the number has dropped to 143 days in 2019, an indicator of increased demand in the area.

The rules and costs of buying a home in South Carolina

Before buying a home in South Carolina, consider the following rules and regulations, as well as state-specific costs.

Home seller and buyer laws

  • Property disclosures

According to South Carolina law, sellers need to file a form that provides extensive information on the state of the home they’re selling to potential buyers, especially when it comes to defects or violations in zoning laws, building codes or similar restrictions. As part of the disclosure process, sellers must indicate whether they know of problems with a home’s water supply, sewage system, roof and gutters, as well as any plumbing, heating or cooling issues and pest infestations.

  • Judicial foreclosure

If a homeowner fails to pay their mortgage, lenders will often foreclose on the property. Some states let lenders foreclose without going to court. But other states, including South Carolina, require judicial foreclosure, which means lenders need to file a judicial lawsuit in order to proceed.

  • Equitable distribution

In so-called community property states, assets, such as property and earnings, and debt are split 50/50 when a couple goes through a divorce. South Carolina, however, is an equitable distribution state. This means that when a couple decides to divorce, they present their respective cases to a judge, who then decides how to equitably divide jointly owned property, such as a family home.

  • Attorney state

Many states do not require that a lawyer be present during a home closing. These are so-called escrow states, which means they allow homebuyers to work with escrow agents who are given the task of moving real estate holdings from the seller to the buyer.

Other states, including South Carolina, are so-called attorney states. This means lawyers must be physically present during real estate closings.

Taxes

Real estate transfer taxes

At the time of closing, some states, including South Carolina, impose a transfer tax. This tax is based on the value of the property, and mortgage lenders are required to disclose the amount to potential buyers. In South Carolina, buyers can expect to pay a transfer tax of $1.85 for every $500 in home value, which means the purchase of a $200,000 home would come with a $740 transfer tax.

Property tax exemptions

In South Carolina, some homebuyers and current homeowners may qualify for property tax exemptions. For example, the Homestead exemption is offered to seniors over age 65, individuals who are legally blind, and those who are permanently and totally disabled. The tax exemption applies to the first $50,000 of a home’s market value. Under legislation passed in 2007, these individuals are already exempt from paying any school operating taxes in their respective areas.

Typical property taxes

According to Tax-Rates.org, South Carolina has some of the lowest property tax rates in the country, with the median at 0.5% of a property’s fair market value. As in other states, property taxes in South Carolina may differ by county. In large metropolitan areas, tax rates may be significantly higher. Homeowners in Richland County, for example, should expect to pay a 0.76% property tax, according to Tax-Rates.org.

Conforming loan limits

For a one-unit home, South Carolina has a maximum conforming loan limit of $484,350, which means borrowers can borrow up to that amount without having to apply for a jumbo mortgage.

Conforming loans are mortgages that adhere to Fannie Mae and Freddie Mac guidelines. These government-backed organizations set national loan limits each year, and these help bring liquidity and stability to the conventional loan market.

In 2019, the maximum conforming loan limit for a one-unit home for most parts of the U.S. is $484,350. For consumers who have good credit, conforming loans generally offer the best interest rates.

Programs for homebuyers in South Carolina

South Carolina offers a number of in-state programs that can help homebuyers keep costs down. Some offer help with down payment costs, while others provide buyers with fixed-rate, low-interest loans. Here are a few programs to consider:

SC Housing

What it provides:

  • Low fixed-rate, 30-year mortgages with as little as 3% down payment required
  • Up to $6,000 in down payment assistance, determined by income and property location
    • Down payment assistance is financed as a second mortgage and may be repayable or forgivable
  • Lower mortgage insurance payments

Who qualifies:

  • Property must be a single-family home but can be an off-frame modular home, townhome or qualifying condo
  • Property must be located in South Carolina
  • Borrowers must meet minimum credit score requirements:
    • 620 for 96.5% loan-to-value (LTV) FHA loans
    • 660 for 97% LTV conventional loans
    • 640 for 100% LTV USDA loans
  • Borrowers must complete a homebuyer education course

Learn more

Palmetto Home Advantage

What it provides:

  • Fannie Mae conventional mortgages that offer 3% or 5% in down payment assistance, which is forgivable
  • Lower monthly mortgage insurance premiums

Who qualifies:

  • Borrowers must earn less than $87,500
  • Borrowers must have a minimum credit score of 640
  • Borrowers may be first-time or repeat homebuyers

Learn more

SC Housing Mortgage Tax Credit Program

What it provides:

  • A federal mortgage credit certificate that can save borrowers up to $2,000 each year
    • Credit is available for every year the homebuyer lives in the property

Who qualifies:

  • Property must be a single-family home and occupied by the owner as a primary residence
  • Property must be in South Carolina
  • Borrowers must apply for 30-year conventional, FHA, USDA or VA mortgages
  • Borrowers do not need a minimum credit score

Learn more

Hardest Hit Fund Downpayment Assistance

What it provides:

  • FHA mortgage loans for those buying homes in some areas of Lexington, Richland and Sumter counties
  • Up to $15,000 in down payment assistance, which can be forgiven completely if the homeowner remains in the property for a minimum of 10 years

Who qualifies:

  • Buyers must have at least a 620 credit score
  • Buyers must occupy the property as a primary residence
  • Buyers must take a homebuyer education course
  • Property must be an existing home (new construction does not qualify)

Learn more

Rate shopping tips

Just as a homebuyer shouldn’t commit to buying the first property they see, borrowers need to shop around for the best mortgage rates possible. These four tips may help:

Contact at least three lenders on the same day

Mortgage rates vary daily, as well as by lender, so reach out to at least three lenders on the same day when you’re ready to pursue home financing. Shopping for a mortgage during a short period of time will not hurt your credit score. However, It’s important to reach out to lenders at the same time, so credit bureaus can see you’re shopping for a home loan. It’s generally best to make all queries within a 30-day period.

Give each lender the same information

Give each lender the same information to get an accurate picture of what kind of mortgage rate you can expect. Before speaking with lenders, pull together important financial information, such as bank and 401(k) retirement statements.

Add up all lender fees to determine a loan’s final cost

Lenders typically charge fees for closing costs, processing a loan application, recording a loan and hiring an attorney to represent them. These fees vary by lender; be sure to include them when you’re comparing total loan costs.

Know when to lock in an interest rate

Once you’ve found a mortgage rate that works for you, it’s important to lock in that rate so it won’t change when the market shifts. Start by asking lenders about their rate-lock policies; many rate lock periods range from 30 to 60 days. To hold on to the rate, you’ll need to close on the purchase of your home within that time period.

The information in this article is accurate as of the date of publishing.