What to know about mortgage rates in South Carolina

Happy couple in front of their new South Carolina homeImage: Happy couple in front of their new South Carolina home
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South Carolina is full of beaches, golf courses and cultural activities, all of which make it an attractive place to call home. The Palmetto State also offers an exciting culinary scene and more than 90,000 acres of state parks. If you’re searching for a home in South Carolina, remember to shop around and compare mortgage rates. What may seem like a small difference could add up to thousands of dollars over the course of a 15-year or 30-year mortgage.

Mortgage debt in South Carolina

Credit Karma members with mortgages in South Carolina had average mortgage debt of $163,707 in 2020, with an average monthly mortgage payment of $1,063.

That puts South Carolina below average for both mortgage debt and for monthly mortgage payments compared to Credit Karma members across the U.S. in 2020.

Types of home loans

If you choose to finance your dream home, you might be overwhelmed with the number of mortgage loan options out there. Here are some of the more common mortgage types that South Carolina homeowners may consider.

Conventional loans in South Carolina

Conventional loans are mortgages that aren’t part of government programs. These loans tend to be good for people with solid credit and a down payment of at least 3% to 5%.

South Carolina FHA loans

FHA loans are a good option for first-time homebuyers to explore — particularly if your credit is less than perfect. That’s because you may be able to qualify with credit scores as low as 580 with a 3.5% down payment or 500 with a down payment of 10%. This FICO® score requirement is the FHA minimum standard. In general, additional lender credit score requirements may apply.

The FHA loan limit in 2023 is generally $472,030 for a one-unit property, but it can reach as high as $1,089,300 depending on where you live.

The following two areas in South Carolina have higher limits:

  • Hilton Head Island-Bluffton
  • Charleston-North Charleston

You can find the exact limit by county on the U.S. Department of Housing and Urban Development website.

VA loans in South Carolina

If you’re an eligible veteran or service member comparing mortgage rates in South Carolina, a VA loan can be attractive since down payments and mortgage insurance aren’t typically required and you may be able to qualify if you don’t have great credit.

Similar to FHA loans, VA loans are insured by the government but issued by private lenders.

Conforming loan limits in South Carolina

Conforming loans are a type of home loan that meets certain loan limits set by the Federal Housing Finance Agency. This means they can be bought by Fannie Mae and Freddie Mac, government-sponsored enterprises that guarantee mortgages.

Loans that exceed conforming loan limits are known as jumbo loans. Lenders often consider these loans riskier than conforming loans.

All of South Carolina’s counties have a conforming loan limit of $548,250 in 2021 for single-unit properties.

First-time homebuyer programs in South Carolina

If you’re hoping to buy your first home, there may be some assistance programs available to you in South Carolina.

  • SC Housing Homebuyer Program — The SC Housing Homebuyer Program offers 30-year conventional and government-backed mortgages with competitive interest rates. It also provides down payment assistance with a 0% interest rate and no monthly payments. Prior home ownership restrictions depend on the particular county. The program can apply to homes with a price of up to $300,000. Additional terms apply, so be sure to see the SC Housing website and Homeownership Program Handout for details.
  • SC Housing Palmetto Home Advantage — This program is for first-time homebuyers and repeat homebuyers. The Palmetto Home Advantage comes with competitive interest rates, down payment assistance of up to 5% of the loan amount, and a reduced mortgage insurance rate on conventional loans. You’ll need to meet certain income limits and have a minimum credit score of 640 to take advantage of it.
  • SC Housing County First Initiative — With SC Housing County First Initiative, you can receive up to $8,500 in forgivable down payment assistance, as well as a fixed interest rate, as long as you purchase a home in one of the state’s select rural counties. You must also meet income and purchase price requirements.

Mortgage refinance rates in South Carolina

If you’re thinking about refinancing your mortgage in South Carolina, keep a few things in mind.

  • Break-even cost — Once you know the closing costs for your refinance, you can use any savings on your monthly mortgage payment to calculate how long it will take you to recoup that investment and “break even.”
  • Cash-out refinance — Have you accumulated equity in your home that you’d like to convert to cash? A cash-out refinance lets you refinance your home for more than what you owe and get cash in return. But you’ll owe the full amount plus interest and you’ll end up owning less equity in your home, which means less cash in your pocket if you sell in the future. 
  • Loan term — You also may want to either shorten or extend your loan term. For instance, if you have a 30-year mortgage, you may want to convert it to a 15-year loan. Keep in mind that reducing your term likely means you’re paying more each month — but less in interest over time. Lengthening your loan term may mean you pay less each month, but more interest over the course of the mortgage.

About the author: Anna Baluch is a freelance personal finance writer from Cleveland, Ohio. You can find her work on sites like The Balance, Freedom Debt Relief, LendingTree and RateGenius. Anna has an MBA in marketing from Roosevelt Un… Read more.