South Dakota Mortgage Overview
South Dakota isn't heavily populated, but
there are plenty of reasons to live there. First, of course, is Mount Rushmore,
but the climate, beautiful areas, and amazing houses are reasons too. The
average home price in SD is $167,000 and less than 1 million people are living
Here are your top loan options when buying
a home in South Dakota.
South Dakota conventional loans
If you have
good credit, which is 660 credit or higher you can get a conventional loan. You
may need just 3 percent down if you're a first-time homebuyer. If you're a subsequent
home buyer you'll need 5 percent down. Eligible borrowers need a debt ratio of
around 36 percent, but if you have compensating factors, some lenders may allow
higher ratios. You'll pay PMI if you put less than 20 percent down but can cancel
it once you owe less than 80 percent of the home's value.
South Dakota FHA loans
If you don't qualify
for a conventional loan, FHA loans are a good option. You need a 580 credit
score and 3.5 percent down. If you have a 500 - 579 credit score you'll need 10
percent down. Down payment assistance funds and gift funds are allowed and FHA
loans have mortgage insurance for the life of the loan.
South Dakota VA loans
If you served in the
military you can get a loan with no down payment and a 620 credit score. You
must prove you can afford the loan, your current debts, and the cost of living.
VA loans don't charge mortgage insurance, but they do have an upfront funding
South Dakota USDA loans
If you make less than
115 percent of the area's median income, you may be eligible for a USDA loan
but only if you don't qualify for any other loan. Eligible borrowers need a 640
credit score but don't need a down payment. USDA rates are low as are their
mortgage insurance rates.
Programs in South Dakota
If you buy a home for
less than $275,000 and you've never owned a home (or haven't in the last 3
years), you may qualify for a low interest loan. You must be within the SD income
guidelines and work with a local lender.
Down payment assistance
The Fixed Rate Plus
loan provides up to 3 percent of the loan amount to help with closing costs or
the down payment. It's a second mortgage that's deferred until you pay off the
home, sell it, or refinance.