Everything You Need to Know About Buying a House in South Carolina

If you’re looking for low crime rates and an affordable cost of living, South Carolina is a great place to buy a house.
Written by Heather Bernhard
Reviewed by Melanie Reiff
With a low cost of living and abundant job opportunities,
South Carolina
is a great place to buy a house. And did we mention the mild winters and warm Southern hospitality? 
Moving to a new home can be complicated, whether it’s out of state or right down the road. There are many decisions to make, from securing a mortgage to hiring a moving company. 
This guide from
car and home insurance
will tell you everything you need to know about buying a house in the Palmetto State.
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Figure out your finances

Finances are the most important part of buying a home. If you don’t know your
credit score
or your debt-to-income ratio, you can’t start to narrow down loan options and a budget. 
So before you head over to Zillow to look for your dream house, make sure you have these ducks in a row:

Check your credit score

Credit scores play a vital role in many areas of life: they determine who gets the best cell phone plans, who gets to rent apartments, and who gets the best premiums on homeowners and auto insurance. 
Credit scores also determine who gets loans and what rates they pay
If you’re in the market for a mortgage, you need to know your credit score. It will determine whether you can get a loan and how much interest you are charged. 
For a conventional mortgage, you will need a score of at least 620, though you may be able to get a government loan with a score in the 500s.

Calculate your debt-to-income (DTI) ratio

Debt-to-income ratio isn’t something many people are familiar with—but when it comes to buying a house, this number is essential. 
In a nutshell, your debt-to-income ratio (DTI) is the total of your monthly debt payments divided by your gross monthly income (before taxes). 
It’s important to include ALL of your monthly payments when figuring it out, including: 
  • Car payments
  • Student loan payments
  • Alimony and child support
  • Minimum monthly credit card payments
  • Projected future mortgage payments
Most lenders look for a DTI that’s less than 36%. The higher your DTI, the less likely you’ll be able to secure a mortgage. 
In South Carolina, where the average monthly income is $5,251, a good DTI might look something like this: 
$1,837 (monthly payments)  /  $5,251 (monthly income)  = 35%

Determine your down payment 

The down payment you’ll need for your house depends on the lender, the type of mortgage, and your financial situation. Most conventional mortgage lenders require a down payment of at least 20%.
South Carolina
, where the average home costs just over $260,000, you can expect to make a down payment of around $52,000.
If 20% down is out of your price range, you may have other options. Some government programs, such as FHA, require down payments as low as 3.5%. In addition, qualified veterans and their spouses may be able to get a VA loan for no money down.

Prepare for closing costs and other fees 

Legally closing on a home requires the payment of various fees, the bulk of them going to your lender. The buyer usually pays most of the closing fees, though the seller may concede to cover some or all of them. 
All in all, closing costs typically run about 2-5% of the home's total cost. Among the many charges, you can expect to pay: 
  • Lender costs
  • Attorney fees
  • Credit report fees
  • Government filing fees
  • Homeowners insurance
Key Takeaway Buying a house costs a lot of money. Before you start looking for your dream home, make sure you’re financially prepared—not just for the cost of a mortgage but also for closing costs and other fees. 

Look for homeowners insurance 

Most lenders won’t allow you to close on a house until you have homeowners insurance. This protects the lender financially if something significantly damages or destroys your home. You will need to keep the policy until your loan is paid off. 
Your mortgage lender and realtor will likely recommend insurance companies that they have relationships with, but it is essential to do your own research
The average South Carolina homeowners policy costs about $1,100 a year for $250,000 in dwelling coverage. 
Car and homeowners insurance app
can help you compare quotes from top-rated companies, ensuring you get the best rate possible. 
Key Takeaway Buying a house is expensive. Homeowners insurance doesn’t have to be. Research your options so you can get the best coverage for the cheapest rates.

Get preapproved for a mortgage

A mortgage preapproval is a statement from a lender stating that you’re qualified to borrow a certain amount. If you’re in the market for a new house, it’s a good idea to get preapproval for several reasons: 
  • It lets you know exactly how much house you can afford
  • It makes you more attractive to sellers
  • It gives you more flexibility during negotiations
  • You’ll close faster
Perhaps most importantly, many sellers won’t even show you a house without a preapproval letter—this is especially true if you’re in a seller’s market.

How to pick the right mortgage in South Carolina

Hunting down the best mortgage takes time and effort. However, getting the right loan can also save you a lot of money. 
When it comes to choosing the right mortgage in South Carolina, you’ll want to start by considering your financial situation and available options. Once you have a list of viable lenders, it comes down to two things: mortgage term and interest rate.
The most common mortgage terms, or length of time you’ll pay, are 15 years and 30 years.  
Most buyers go with a 30-year fixed mortgage. These offer smaller monthly payments but a higher interest rate. A 15-year fixed, on the other hand, comes with higher payments but lower interest rates.
While a 30-year and 15-year mortgage share the same basic structure, you’ll end up paying less in the long run if you go with the 15-year. 

Look for a house

Now for the fun part! House hunting is exciting—so much so that many people like to browse Zillow even when they’re not in the market for a new home. 
Of course, there’s more to choosing the perfect house than looking at photos of bedrooms and bathrooms online. 
Here’s what you should keep in mind: 

Pick your city or neighborhood  

Nearly 84% of Americans say that their neighborhood is equally important or more important than their house, and for good reason.
Choosing the right town or city ensures that you have a lifestyle you enjoy—whether glitzy shopping and restaurants or sprawling parks and outdoor recreation are more your style. 
Your zip code is especially important if you have children and want them to be part of a quality school system. 
So how do you choose the best location? 
  • Look within your budget
  • Study local housing markets
  • Consider existing amenities (parks, restaurants, supermarkets, public transportation)
  • Look up the local crime rate
  • Figure out the commute time to and from work
  • If you have children, learn about the school system

Buyer’s market vs. seller’s market

When shopping for a new home, the local housing market can significantly impact pricing—specifically, whether you’re buying in a seller’s market or a buyer’s market. 
What type of market you’re in ultimately comes down to one thing: competition. And competition influences everything from how quickly houses move to how much you should offer. 
If you’re not sure how to tell the difference between the two, a buyer’s market is when there are more houses for sale than people who want to buy them. 
A seller’s market is when fewer houses are for sale than people who want to buy them. 
Of course, as a buyer, you’d prefer a buyer’s market. It will give you more flexibility during negotiations and a better chance to get concessions from the seller. 

Find a real estate agent

In South Carolina, there is no legal requirement to have a
real estate agent
in most cases. That being said, no one is more important than your realtor when you're shopping for a home. 
Once you choose the right agent, they'll have your back 100% of the way, from showing you houses to making sure you get the best price. 
If you're not sure where to start, Yelp and Google reviews can offer some good insight; it's always helpful to know what kinds of experiences others have had. You can also ask for family and friends' referrals or check with a relocation expert. 
Just remember: you'll be spending a lot of time with your agent, so make sure to choose someone who you'll enjoy working with.

Make an offer

Once you’ve found your dream home, it’s time to make an offer. Again, your real estate agent can help guide you on how much to bid and whether you should consider waiving contingencies. 
Remember: if you’re in a seller’s market, you’ll have to work harder to make your offer stand out! 
In South Carolina, the busiest months for the real estate market are May through August. If you’re looking for more bargaining rights, you may want to wait until the off-season to start looking. 
How to choose the right kind of home insurance for you

How to save on homeowners insurance

Homeowners insurance is a significant expense, but an important one. Not only do most mortgage lenders require it, but it also helps protect you from catastrophic financial loss in the event your home is destroyed. 
However unlikely that is, always expect the unexpected. It pays to be prepared. 
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Housing prices in South Carolina run the gamut, from about $194,000 in Columbia to $360,000+ in Charleston. 
When considering which neighborhoods fit your budget, remember that there will be more ongoing expenses besides the mortgage payment, including insurance and utilities.
To buy a house in South Carolina with a conventional mortgage, you’ll need a minimum credit score of 620. Depending on your circumstances, you may be able to qualify for a government loan or program with a credit score in the 500s.
According to U.S. News, the best places to live in South Carolina include Spartanburg, Myrtle Beach, and Greenville. In a state known for its natural beauty and sweet Southern charm, you’re sure to find a location you love!
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