South Carolina is “Smiling Faces and Beautiful Places” from the foothills of the Upstate to Charleston in the Low Country. We have everything a homeowner loves – – beautiful landscapes, thriving businesses, great schools and fantastic vacation spots. However, even in South Carolina we have felt the hard pinch of the depressed economy and the downturn in the housing market. Mortgage lenders and banks are competing for business by offering low interest rates on home loans and refinances. You may find a good interest rate by simply talking to your local bank. However, in South Carolina, as in other states, there are some common sense steps to get the lowest interest rate no matter what time of year you are purchasing a home or what city in South Carolina you are located.
Shop Around – Not all lenders are created equal. In South Carolina, we have mortgage lenders, local and national banks, federal credit unions and thrift institutions. Before you commit to your local bank because this is where you have an account, get written quotes from several different lending institutions. Interest rates vary greatly and you can save money by doing some comparison shopping.
Mortgage Brokers – Mortgage Brokers have access to a variety of lenders and this can work to your advantage because they can do the shopping for you. However, make sure that you are very clear on how the broker will be paid and how much he or she will be paid.
Check Your Credit Report – Your credit score can net you a very low mortgage interest rate or it can cost you thousands of dollars because you do not qualify for a lower rate. Obtain copies of your credit reports at AnnualCreditReport for free and examine them carefully for any mistakes or problems. If you can, fix any problems immediately. If you cannot but you have a valid explanation, submit a letter of explanation to with your loan application explaining the problem with your credit report.
Do Not Apply for New Credit Cards, Consumer Loans or other lines of credit – When you apply for a new credit card or a loan, the lender will check your credit report. These inquiries are noted on your credit report and lower your credit score even if you are not approved for the credit. To get a lower mortgage rate, refrain from submitting credit applications for as long as possible before applying for your mortgage loan.
Reduce Your Debt-to-Income Ratio – In other words, pay down as much of your debt as possible so that you have a higher net monthly income. This may net you a lower interest rate because you are a better risk than someone who is scraping to make ends meet each month.
The Federal Reserve Board has excellent information about finding the best mortgage, including information about how to get the best interest rates, fair lending laws, credit problems and information about mortgage fees and costs. The Mortgage Shopping Worksheet helps you compare several lenders quickly and easily in one concise format. The worksheet provides you with all of the information you need to obtain from lenders to find the lowest mortgage interest rate and best deal possible. Shopping online for interest rates is an excellent place to begin – try Zillow.com or LendingTree.com for interest rates in South Carolina.
The Federal Reserve System