Dreaming of owning your own home in South Carolina? Whether you’re moving within the state or from outside the area, there’s a lot to appreciate about South Carolina including the low cost of living and affordable real estate. If it’s your first time buying a home in South Carolina, you may have questions about the steps you need to take and how much it will cost. Here’s a comprehensive guide to buying a house in South Carolina with a look at the best first time home buyer programs in South Carolina you may qualify for.
How to Buy a House in South Carolina
Don’t feel intimidated about buying a home in South Carolina: the process only requires a few steps and you will have knowledgeable professionals to guide you through every step. Here are the six steps to buy a home in South Carolina from beginning to end.
Step 1: Setting a Budget — How Much Does it Cost to Buy a House in South Carolina?
One of the most important things you can do before you even consider South Carolina house hunting is determining how much you can really afford to spend. After all, no one wants to find their dream home and end up house poor!
If this is your first time buying a home, there are many costs you should consider beyond the purchase price. As a homeowner, you will now be responsible for more than just a monthly rent payment. Along with property taxes and homeowner’s insurance, you may also pay private mortgage insurance or PMI depending on your down payment and loan program. There are also many hidden costs of homeownership like maintenance and lawn care. The average homeowner spends $9,080 every year on hidden costs, including insurance and maintenance.
As a general rule, you’ll want to spend no more than 28% of your gross income on your mortgage payment, taxes, and insurance. Don’t forget that utilities may cost more than where you are moving from and are likely higher than what you have paid if you have been renting.
How much does it cost to buy a home in South Carolina? Here are median home prices in for major metro areas of South Carolina:
- Charleston: $360,000
- Greenville: $265,500
- Columbia: $194,000
- Myrtle Beach: $230,000
Step 2: Mortgage Qualification – What You Need to Buy a House in South Carolina
The next step is getting pre-approved for a mortgage. This should be done before you shop for homes because it makes your offer more serious. The pre-approval process is very similar to the process of getting the actual loan and requires documents including:
- Asset verification in the form of bank, retirement, and brokerage statements.
- Income verification such as W-2s, 1099s, and rental income documentation.
- Debt verification showing debt amounts and payments for debt.
- Proof of paid rent for the last 12 months.
- Gift letter if you use a gifted down payment.
The lender will also run your credit report and check your credit score. For the best mortgage rates, you will need a FICO score of 760 or higher. Most lenders require a minimum credit score of 620.
Step 3: Choose a South Carolina Real Estate Agent & Attorney
While not necessary, you’ll probably want to work with a real estate agent to offer advice, show you homes, and help you prepare an offer when you find a home. A buyer’s agent will work in your best interest and help you negotiate.
Note that South Carolina is one of many states that requires a real estate attorney be involved in real estate transactions. The state also requires that the attorney be physically present during closing. This is because South Carolina considers real estate closings as the practice of law. You have the right to choose your own attorney who will:
- Review the purchase contract
- Conduct a title search
- Apply for title insurance
- Prepare documents
- Supervise closing
- Disburse funds
- Record legal documents
Step 4: House Hunting in South Carolina
Now it’s time for the fun part of buying a home in South Carolina: house hunting! A great deal goes into finding the right home, including the neighborhood with the amenities you want, the type of home, and even your commute. Your real estate agent can be invaluable by offering insider advice and pointing you in the direction of the best areas for your needs and budget. Just make sure you avoid common first-time buyer mistakes like trying to find everything on your list!
Need a little help deciding on the best place to live in South Carolina? Check our guide for our top 10 picks!
Step 5: Making an Offer on a Home
Once you’re ready to make an offer, your real estate agent and attorney will help you draft an offer. Your agent will show you comparable sales and go over contingencies that should be in your offer such as a satisfactory home inspection.
Once your offer is made, the seller can accept, reject, or counteroffer. They may request a higher sales price or less seller assistance. Once both parties accept the purchase agreement, you are officially under contract and can expect about two months of escrow before you’re ready to close and move in.
Step 6: Closing on a Home
Only when your mortgage is approved, contingencies are met, and funds are transferred will closing occur. You will meet with your attorney and agent to sign the papers and close the transaction. You’ll also get the keys to your new home: the most exciting moment of buying a house in South Carolina!
First Time Home Buyer Programs in South Carolina
Are you buying your first home in South Carolina? Has it been more than 3 years since you’ve owned a home? You may qualify for grants and first time buyer loans to make buying a home in South Carolina more affordable.
SC Housing is a housing finance agency that partners with lenders to provide affordable first time home buyer grants in South Carolina. The SC Housing Homebuyer Program offers down payment assistance in South Carolina and affordable fixed-rate loans.
The down payment assistance of up to $6,000 is available to first time buyers in non-targeted counties or non-homeowners in targeted counties. The assistance can be used toward your down payment, closing costs, or prepaid items and it’s a second mortgage that’s forgivable after 10 or 20 years.
You can learn more about the terms of the program here.
One of the most valuable programs for first-time buyers in South Carolina is the Mortgage Tax Credit Certificate which gives you a tax credit on your federal taxes of up to $2,000 per year (equal to 50% of the mortgage interest you pay) as long as you live in the home. You can even reduce your employer federal withholdings to increase your take-home pay with an MCC.
You may pay up to $800 initially to receive an MCC from a lender but this cost may be paid by the seller. Learn more about the MCC from SC Housing.
If you’re buying a home in Greenville County, you may qualify for down payment assistance through CommunityWorks Carolina as a first-time buyer. To qualify, you must have household income at or below 80% of the Area Median Income, invest at least $500 into buying a home, attend a workshop, and secure a 30-year, fixed-rate loan.
The program provides a forgivable 0% interest 5-year loan of up to $4,000 that can go toward closing costs or a down payment.
Federal First-Time Home Buyer Loans
When buying a home in South Carolina, you may want to use a federal loan designed for first-time buyers. Some of these loans may be used in conjunction with the first time home buyer grants above.
- FHA loans require a down payment as low as 3.5%. This is the most popular loan program for first-time buyers with a weaker credit score and low down payment. With a low down payment, you will need to pay mortgage insurance premiums, however.
- VA loans are considered the best loan programs if you qualify as a military member, veteran, or qualifying family member. There is no down payment needed, no mortgage insurance, and a low funding fee.
- USDA loans offer 100% financing but you must buy a home in a designated rural (or suburban) area.
- Fannie Mae and Freddie Mac offer conventional mortgages that require a down payment as low as 3%.
- The Good Neighbor Next Door program allows you to get a discount on the purchase price of a home as a first responder or teacher.
Ready to make your dream of homeownership a reality? Once you’ve chosen a neighborhood and made an offer to buy a house in South Carolina, call the trusted Greenville movers at HD Auston Moving Systems for a free moving quote!