| Loan Type | Rate | APR |
|---|---|---|
| 30-year fixed | 6.577% | 6.651% |
| 15-year fixed | 6.567% | 6.736% |
| 7/1 ARM (adjustable rate) | N/A | N/A |
| 5/1 ARM (adjustable rate) | N/A | N/A |
With warm temperatures and a reasonably low cost of living, South Carolina is a popular state. That means you’ll have plenty of options when it’s time to borrow money to buy a house. It’s important to shop around to make sure you get the best deal on the front end, which will save you money over the years.
The Best SC Mortgage Lenders for Rates:
- Best Overall in SC: Rocket Mortgage®
- Best for Variety of Loans: SunTrust Mortgage
- Best for Higher-Risk Borrowers: Palmetto Mortgage
- Best for First Time Homebuyers: Academy Mortgage
- Best for Veterans: Veterans United
- Best for Bank Statement Only Loans: Luxury Mortgage
What Is a Mortgage Rate?
Before you start comparing rates among the best mortgage companies in town, you should know exactly what goes into setting a rate. Lenders are handing over a large sum of money for at least several years. As with any business transaction, that comes with a fee. The fee is charged as interest, which is a percentage of the money you’re borrowing. The amount of this fee is known as the mortgage rate.
What Factors Impact Your Mortgage Rate?
When setting a mortgage rate, a variety of elements influence lenders. Here are a few of the top factors:
Inflation
The base rates you see on a lender’s website are based on the economy. As with other products and services, interest rates follow the rise and fall of general market prices. You may see interest rates drop slightly during tough times as lenders strive to remain competitive.
Consumer Demand
In addition to the economy as a whole, lenders often respond to what’s happening locally. When demand for loans is high, they may bump up interest rates to maximize the opportunity. As those requests dry up, however, lenders will adjust to excite potential homebuyers.
Your Credit History
Past behavior is often an indicator of the future. Lenders look at your history of paying your bills on time. This is reflected in something called a credit score, and lenders set minimum scores for acceptance. Even after you’re accepted, though, your interest rate will be based on the strength of your credit score.
Your Financial Standing
The money you have in the bank matters. You’ll need to come up with a down payment, which is anywhere between 3% and 20% of the amount you’re borrowing. They’ll also want you to have cash reserves set aside, enough to cover your mortgage payments for at least a few months if your income should suddenly stop.
The Home You’re Buying
The type of residence plays a role in the interest rate you’re offered. If you already own a home and this will serve as a vacation home or rental, your loan will be seen as riskier and your rate will be higher.
The Amount You’re Borrowing
As part of its risk assessment, lenders take a look at the amount you’re borrowing. If you buy a $100,000 property, the lender faces less of a risk than if you purchase one for $400,000. That reduced risk will often be reflected in a lower interest rate.
The Location of the Home
Interest rates vary from one market to the next. Even the same lender will quote a different rate if you live in South Carolina than, say, if you live in Illinois or California.
Your Research
As with anything, when you shop around you can get a better deal. This applies not only to the amount of interest you pay, but also whether you’ll find a lender that has the level of customer service you want.
What Is a Mortgage Type?
There are various types of loans, each with different interest rates. Below are the 4 most common:
Conventional Loans
This loan is usually best for borrowers with a big down payment and a strong credit score. There is no government backing for this type of loan. That means the lender shoulders the full burden if you default.
FHA Loans
Many lenders for first time buyers steer borrowers in this direction. FHA loans are backed by the Federal Housing Administration. That gives lenders more freedom to lend to those with lower credit scores or a smaller down payment.
USDA Loans
To keep the housing market strong in small towns and rural areas, the government backs loans to some borrowers. You can check the USDA map to see if your town is covered under a USDA loan.
VA Loans
The Veterans Administration backs loans to borrowers who have served in the military. These loans come with no down payment requirements and competitive interest rates.
What is a Mortgage Term?
You make an important choice when you agree to a loan to buy a house. The term can add thousands to the amount you’ll pay over the course of your loan in the form of interest. Here are the most common terms you’ll see:
30-Year Fixed
The most popular term, this stretches your payments over 30 years. That means your monthly payments are lower. The lender charges a fixed-interest rate that is typically higher due to the increased time to pay off.
15-Year Fixed
With a 15-year fixed mortgage, your interest rate is lower. However, your mortgage payment is higher each month. The good news is that if you stay in your house for 15 years or longer, you’ll have a home that you own. You’ll also no longer have a mortgage payment, although you’ll still have to pay property taxes.
5/1 ARM
For some homebuyers, an adjustable-rate mortgage is a good option. You’ll pay a lower, fixed-interest rate for the first 5 years. At the end of that period, however, your rate becomes adjustable, which means it reflects the current interest rate.
Current Mortgage Rates in South Carolina
Like other states, South Carolina mortgage rates change on a fairly regular basis. The economy, housing market and local demand drive rates upward or downward. We know you need the latest information possible to make a well-informed decision. Take a look below for current rates based on loan types.
| Loan Type | Rate | APR |
|---|---|---|
| 30-year fixed | 6.577% | 6.651% |
| 15-year fixed | 6.567% | 6.736% |
| 7/1 ARM (adjustable rate) | N/A | N/A |
| 5/1 ARM (adjustable rate) | N/A | N/A |
Calculating Interest in SC
It may sound complicated, but the formula lenders use to calculate interest is actually simple. They use a process called amortization. This just means they take a look at the remaining balance of your loan each month and multiply it by the interest rate. Once they have that number, they divide it by 12 to determine how much interest you owe that month.
Below is an example of how much interest you’ll pay on a typical 30-year loan in South Carolina.
| City | Average Home Value | Loan Term | Current Rate | Downpayment (20%) | Monthly Payment | Total Interest Paid |
|---|---|---|---|---|---|---|
| Charleston | $315,700 | 30-year fixed | 6.68% | $63,140 | $1,626.36 | $332,929.60 |
| Columbia | $136,900 | 30-year fixed | 6.924% | $27,380 | $723.06 | $150,781.60 |
| North Charleston | $173,600 | 30-year fixed | 6.924% | $34,720 | $916.89 | $191,200.40 |
| Mount Pleasant | $445,400 | 30-year fixed | 6.68% | $89,080 | $2,294.53 | $469,710.80 |
Lender Credit Score Minimums in SC
When it’s time to look for a purchase or refinance quote, lenders look at your credit score. Below is a sampling of some South Carolina lenders’ credit score minimums.
| Lender | Minimum Credit Score Required |
|---|---|
| Homebridge Financial Services | 620 |
| U.S. Bank | 620 |
| PNC Financial Services | 700 |
| Bank of America | 620 |
| Lending Tree | 620 |
- Online Mortgages
5 Best Mortgage Lenders in South Carolina
When choosing a lender, you should research several to ensure you select the best option for your needs. Below are 5 of our favorites to help you get started.
1. Best Overall: Rocket Mortgage®
As you start, consider getting a purchase quote from an online lender. It’s a fast, convenient way to get a baseline that you can then compare to other lenders you see.
Rocket Mortgage® has become one of the most popular online lenders for a reason. You’ll get a competitive rate and rapid loan turnaround, along with the convenience of handling most of the process online.
2. Best for Variety of Loans: SunTrust Mortgage
SunTrust has a national presence, along with branches across South Carolina. Its size allows SunTrust to offer a wide range of loan types, as well as plenty of options for applying and managing your loan.
As with many large lenders, though, SunTrust can’t personalize the experience by making exceptions to its policies.
3. Best for Higher-Risk Borrowers: Palmetto Mortgage
Palmetto Mortgage wants to encourage home ownership in South Carolina. The Fresh Start Program issues loans to borrowers with credit scores as low as 580.
You also won’t have to provide a rental or mortgage history to qualify. If you don’t have the down payment saved, Palmetto also lets you fund it 100% through gifts from family members.
4. Best for First Time Homebuyers: Academy Mortgage
If you’re buying your first home, consider working with Academy Mortgage. In addition to offering FHA loans, Academy also participates in the SC Housing Homebuyer Program.
Through that program, borrowers can qualify for down payment assistance, which can help with that first purchase.
- Current Service Members
5. Best for Veterans: Veterans United
For military members and veterans, a VA loan means competitive rates and freedom from down payments.
In South Carolina, Veterans United is the best choice, particularly if you’re within short driving distance of its local branch in Greenville.
You’ll get specialized service from representatives who truly care about military members and their families.
- Self-employed Borrowers
6. Best for Self-Employed: Luxury Mortgage
If you’re a small business owner or a freelancer, your income likely fluctuates from year to year. This can make getting a mortgage more difficult, as lenders usually want to see proof of consistent income before they’ll offer you a loan. Luxury Mortgage’s Asset Qualifier loan is an excellent choice for self-employed men and women.
When you apply for an Asset Qualifier loan, Luxury Mortgage will look at the sum of your business assets — not just your income — when they underwrite your loan. This can make it easier to qualify if you’ve recently invested a large amount of money into your business or if you’re in the middle of a slow sales year.
Preparing for Homeownership in the Palmetto State
South Carolina isn’t just popular with tourists. The state offers a great quality of living and affordable homeownership. If you can find a good deal on mortgage interest, you can save money every month. That savings will add up over the years as you enjoy your time in your new home.
Frequently Asked Questions
How do I get pre-approved?
First, you need to fill out an application and submit it to the lender of your choice. For the application you need 2 previous years of tax returns including your W-2’s, your pay stub for past month, 2 months worth of bank statements and the lender will run your credit report. Once the application is submitted and processed it takes anywhere from 2-7 days to be approved or denied. Check out our top lenders and lock in your rate today!
How much interest will I pay?
Interest that you will pay is based on the interest rate that you received at the time of loan origination, how much you borrowed and the term of the loan. If you borrow $208,800 at 3.62% then over the course of a 30-year loan you will pay $133,793.14 in interest, assuming you make the monthly payment of $951.65. For a purchase mortgage rate get a quote here. If you are looking to refinance you can get started quickly here.
How much should I save for a down payment?
Most lenders will recommend that you save at least 20% of the cost of the home for a down payment. It is wise to save at least 20% because the more you put down, the lower your monthly payment will be and ultimately you will save on interest costs as well. In the event that you are unable to save 20% there are several home buyer programs and assistance, especially for first time buyers. Check out the lenders that specialize in making the home buying experience a breeze.