If you’re looking to buy a home in South Carolina, chances are you already know it’s likely you’ll need a mortgage. An experienced SC banker, lender, broker, or mortgage company can help you understand the ins and outs of mortgages and assist you in applying for the loan that purchases your dream home. But how do you know what size of loan you might qualify for? And what are some things you should consider about common mortgage types?
One of the first steps a South Carolina home loan borrower should take when evaluating their mortgage options is having a qualified company such as Whitley Mortgage evaluate whether they are eligible for pre-qualification or pre-approval. Mortgage loans fall into two categories primarily – conventional and government insured. Conventional loans strictly take place between the borrower and the lending agent, whereas government insured loans are guaranteed on the buyer’s side by a governmental body such as the Federal Housing Association. Candidates can pre-qualify or be pre-approved for either. Whitley Mortgage can walk with you through this process to make it smooth and easy!
Pre-qualification is a great way for South Carolina borrowers and loan applicants to see what amount of money they may be eligible for. Pre-qualifications take a fairly superficial look at your finances and financial background to estimate what a lender, banker, or mortgage broker might be willing to lend. This is hugely useful in helping you create your expectations and start looking at homes that will fall within your projected budget.
Pre-approval takes the pre-qualification process a few steps further – and provides more concrete information. To be pre-approved for a mortgage in South Carolina, the bank or lending entity will take a look at both your finances and your credit history to give you a guarantee on the amount of money they will provide. This process takes longer than pre-qualification and usually comes with a fee, but it gives you a solid idea of what amount of money you can expect and sometimes can provide you with what interest rates you qualify for. Pre-approval is hugely helpful in planning both for your initial purchase and for your mortgage payments down the line.
Interest rates are a huge factor in the affordability of your loan. Even half a percentage point can add up to thousands of dollars over a 30-year mortgage, so it’s important to understand the types of interest rates available and the benefits of each for South Carolina homebuyers.
Adjustable rate mortgages, or ARMs, are loans whose interest rates can fluctuate with the economy. These interest rates are great for people who may not qualify for the best percentage off the bat, as they are not locked into a potentially high payment for the duration of their mortgage. That said, ARMs can be volatile and if the market moves in the wrong direction homeowners can end up paying a higher rate than they initially signed on for.
Fixed-rate loans have a set interest rate that will not change over time. Market conditions do not impact fixed-rate loans at all, so borrowers with this type of interest will know exactly what they will be paying from month to month. This can be a good thing, but if you began your loan when the market was offering higher-than-average rates it may not be in your best interest in the long-term.
Mortgages are complicated. Interest rates, approval, escrow, points, APR, and multiple other considerations leave seasoned and first-time South Carolina homebuyers feeling overwhelmed. That’s why it’s essential to talk to a seasoned mortgage professional, like those employed at Whitley Mortgage. We’ve helped people throughout South Carolina, including Pageland, Lancaster, Chesterfield, Myrtle Beach, and Rock Hill homebuyers determine which type of loan is best for their SC home purchase, and helped set them on the path toward buying the home of their dreams.