| Loan Type | Rate | APR |
|---|---|---|
| 30-year fixed | N/A | N/A |
| 15-year fixed | N/A | N/A |
| 7/1 ARM (adjustable rate) | N/A | N/A |
| 5/1 ARM (adjustable rate) | N/A | N/A |
Buying a home in the Mount Rushmore State? Get comfy and settle in. Benzinga’s put together some can’t-miss content about mortgage rates in South Dakota.
What is a Mortgage Rate?
First things first. A mortgage rate is the same thing as an interest rate. This rate is the percentage of interest you will pay to your lender. Each time you submit a mortgage payment, part of your payment goes toward the principal of your loan. The principal of your loan is the amount that pays back what you borrowed. The rest of your payment goes toward interest, which is what you pay to your lender for lending you money.
5 Best Mortgage Lenders in South Dakota
To get the best mortgage, you’re going to want to find the right mortgage lender. Here are some of the best mortgage lenders in South Dakota for several types of situations.
- Online Service
1. Best Overall: Quicken Loans®
If you want an easy-to-understand online mortgage process, Quicken Loans® is a good option. It offers several mortgage types, including conventional and government-backed options. You can even work with Quicken Loans to customize your mortgage. Not sure which mortgage type is right for you? No problem! You can use the Quicken Loans website to help navigate your options and find the right fit. You can reach Home Loan Experts from Quicken Loans by phone or by starting a chat online.
- Current Service Members
2. Best for Veterans: Veterans United
If you’re a service member, veteran or the spouse of a service member, you may qualify for a VA loan. Veterans United can help you through the process of getting your mortgage. You can even use its website to review the qualifications for a VA loan to see if you are eligible. When you’re ready to start the mortgage process, get your prequalification from Veterans United online. Its website also offers other resources, such as an affordability calculator and a monthly payment calculator. Veterans United’s customer service team is available 24/7 to answer any questions you have at your convenience.
- Traditional Lending
3. Best for First Time Home Buyers: Wells Fargo
You can choose from several lenders for first-time home buyers. Wells Fargo is a good choice because of its First Mortgage loan program. This program was designed to help buyers on a low-to-moderate income get into their first home. It offers low down payment options and assistance paying for your closing costs. Another benefit of Wells Fargo is that it offers in-person assistance at its branch locations. You can also reach Wells Fargo customer service by phone and online.
- The Online Experience
4. Best for Online Lender: Better.com
Better.com is a great option for this because it offers complete transparency on its pricing, with no hidden fees or commissions. The entire mortgage process is completed online and getting started is as simple as answering a few questions.
Better’s intuitive mortgage application process is tailored to your situation so you’ll only be asked questions relevant to your needs. You can also use Better’s website to access resources that will give you more information about mortgages. If you need specific information or have other questions, you can reach Better’s customer service team by phone or email.
- Personalized support
5. Best for Self Employed Individuals: Guaranteed Rate
As a self-employed individual, you’ll want to work with a lender who understands your situation and won’t ask for financial documents that you don’t have. Guaranteed Rate offers an intuitive loan finder that can help match you with the right mortgage option for you. It offers a wide range of mortgage products — you’ll have plenty of options to choose from.
Guaranteed Rate also offers a mobile app that allows you to submit loan documents and do some of your mortgage research on the go. You’ll get low interest rates and transparency about its fees. You’ll also have access to Guaranteed Rate’s loan officers by phone, online or even through its mobile app.
What Factors Impact Your Mortgage Rate?
Mortgage rates aren’t just a random number that lenders hand out. Your mortgage rate is based on a few different factors, including:
- The economy: The entire housing market is affected by how the economy does. If employment rates and wages are steady, it’s safe to assume that more people are willing to buy houses. This means demand for mortgages could be high and lenders may raise mortgage rates for this reason. If the unemployment rate is high and there are fewer people buying houses, you might be able to find a lower mortgage rate.
- Your credit score: Lenders will take a close look at your credit report and credit score when reviewing your mortgage application. Lenders use this information to determine how much risk you pose if they approve your mortgage. For example, if you have a lower credit score and your credit report shows that you frequently make late payments, lenders might consider you a risky borrower. A lender might give you a higher interest rate. If you have a good credit history and a high credit score, you could be offered a lower mortgage rate.
- Mortgage type and term: The mortgage type and term you choose will also impact your mortgage rate. Typically, shorter-term loans are offered at lower interest rates. Some mortgage types and programs may also offer reduced mortgage rates.
What is a Mortgage Type?
Choosing the right mortgage type is an important decision. Here are a few of the most common options that may be available to you.
- Conventional mortgages are not guaranteed or insured by the federal government. You’ll need to meet minimum income and credit score requirements to qualify for a conventional mortgage. Your lender will be able to provide you with the various requirements.
- FHA loans are part of a mortgage insurance program managed by the Federal Housing Administration. To qualify, you’ll need to meet the requirements set both by your lender and by the Federal Housing Administration. FHA loans offer lower credit score requirements than conventional loans, as well as low minimum down payments.
- USDA loans are backed by the U.S. Department of Agriculture (USDA). To qualify, you must meet the requirements set by the USDA, including purchasing your home in a designated area.
- VA loans are offered by the U.S. Department of Veterans Affairs. To qualify, you must meet the service requirements set by the VA. VA loans allow you to finance 100% of your home’s purchase price and offer low mortgage rates.
What is a Mortgage Term?
Choosing a mortgage term will also help you decide how long you want to make your mortgage payments. It also allows you to determine which type of mortgage rate you want your loan to have.
- 30-year fixed terms mean that you’ll be making mortgage payments for 30 years. A fixed-rate mortgage means you’ll lock in your mortgage rate when you finalize your loan and it will never change.
- 15-year fixed mortgage rate terms are similar to a 30-year fixed-rate mortgage, except you’re only making payments for 15 years. Your payment will be higher for a 15-year mortgage compared to a 30-year mortgage.
- 5/1 adjustable-rate mortgages (ARMs) allows you to benefit from a fixed rate for the first 5 years of your mortgage. After that, your mortgage rate will change 1 time per year until your mortgage is paid off.
Current South Dakota Mortgage Rates
Think of mortgage rates like stocks. Stocks are traded, and so are mortgage-backed securities, on which mortgage rates are based on. Current mortgage rates fluctuate frequently. Benzinga monitors these changes and we update our current mortgage rate charts.
| Loan Type | Rate | APR |
|---|---|---|
| 30-year fixed | N/A | N/A |
| 15-year fixed | N/A | N/A |
| 7/1 ARM (adjustable rate) | N/A | N/A |
| 5/1 ARM (adjustable rate) | N/A | N/A |
Calculating Interest in South Dakota
Your mortgage rate will be used to calculate the amount of money you’ll pay in interest each month. Your lender will multiply the remaining balance of your loan by your loan’s mortgage rate and divide that number by 12. The result is your monthly interest amount.
| City | Average Home Value | Loan Term | Current Rate | Downpayment (20%) | Monthly Payment | Total Interest Paid |
|---|---|---|---|---|---|---|
| Sioux Falls | $194,600 | 30-year fixed | 6.262% | $38,920 | $959.76 | $189,833.60 |
| Aberdeen | $155,200 | 30-year fixed | 6.262% | $31,040 | $765.44 | $151,398.40 |
| Brookings | $204,300 | 30-year fixed | 6.437% | $40,860 | $1,026.29 | $206,024.40 |
| Watertown | $123,300 | 30-year fixed | 6.262% | $24,660 | $608.11 | $120,279.60 |
Lender Credit Score Minimums in South Dakota
Your credit score is what lenders will use to determine whether or not you are financially reliable. It’s based on a number of factors, including your credit history, the amount of debt you owe and whether you make on-time payments. You’ll need to meet your lender’s minimum credit score requirements to get approved for a mortgage. Your credit score can also impact your mortgage rate.
| Lender | Minimum Credit Score Required |
|---|---|
| Quicken Loans® | 620 |
| better.com | 620 |
| Veterans United | 620 |
| Wells Fargo | 620 |
| Guaranteed Rate | 620 |
Next Steps
Now that you’re familiar with mortgage rates in South Dakota, it’s time to go on your mortgage journey. Your next step is to compare lenders and mortgages to determine which is right for you and get preapproved for your mortgage.