Overview of South Dakota Mortgages
Home to wonders like open prairies and the Black Hills National Forest, South Dakota is certainly an inspiring place to own a home. Mortgage rates in South Dakota are usually fairly in line with national averages. The state’s county-level conforming loan limits and FHA limits stick to their respective standards.
|30 year fixed||3.10%||3.15%||-0.05|
|15 year fixed||2.43%||2.40%||+0.03|
|30 yr fixed mtg refi||3.15%||3.15%||0.00|
|15 yr fixed mtg refi||2.50%||2.43%||+0.07|
|7/1 ARM refi||3.63%||3.63%||0.00|
|15 yr jumbo fixed mtg refi||2.56%||2.56%||0.00|
National Mortgage Rates
Historical Mortgage Rates in South Dakota
South Dakota Mortgage Rates Quick Facts
- Median Home Value: $185,000 (U.S. Census Bureau)
- Loan Funding Rate: 59.14% (CFPB)
- Homeownership Rate: 69.5% (St. Louis Fed)
- Median Monthly Homeownership Costs: $1,340 (U.S. Census Bureau)
South Dakota is physically larger than more than half of all U.S. states, but it’s also one of the least populated. South Dakota mortgage rates are historically in line with national averages.
A financial advisor in South Dakota can help you plan for the homebuying process. Financial advisors can also help with investing and financial planning - including tax, retirement and estate planning - to make sure you are preparing for the future.
South Dakota Historic Mortgage Rates*
|Year||South Dakota Rate||U.S. Rate|
*The FHFA stopped reporting new data in 2018.
South Dakota Mortgages Overview
If you are planning on buying a home in the Mount Rushmore State, you will want to set a budget before you embark on your search for a place to live. It might also be a good idea to consider getting a mortgage preapproval from a lender, which can help to streamline the homebuying process.
The conforming loan limit in every South Dakota county is the standard $548,250. FHA loan limits are also consistent at $356,362.
Conforming and FHA Loan Limits by County
|County||Conforming Limit||FHA Limit|
State law mandates that a seller must provide a buyer with a disclosure form. The South Dakota Department of Labor and Regulation provides a comprehensive disclosure form, which includes details on known defects, items included in the sale, environmental hazards like mold, structural damage and potential liens on the property. Regardless of the law, a buyer should always schedule a home inspection to protect the integrity of the sale and uncover any hidden defects.
30-Year Fixed Mortgage Rates in South Dakota
If you’re settling down in the Mount Rushmore State, a 30-year fixed-rate mortgage is likely going to be an option you explore. The interest rate for this home loan option does not change for the entirety of the loan’s life, unless you refinance. With a 30-year fixed-rate mortgage, you know exactly how much your monthly payments will be, which makes it a bit easier to budget.
The average South Dakota rate for a fixed 30-year mortgage is 2.60% (Zillow, Jan. 2021).
South Dakota Jumbo Loan Rates
Each state has its own set of conforming loan limits to help lenders assess financial risk. If a home loan goes beyond the limit in a particular county, the loan is considered a “jumbo loan.” These outsize loans are riskier for lenders as more money is stake. In order to compensate for that added risk, jumbo loans have higher interest rates. In South Dakota, the conforming loan limits stick to the standard $548,250. This is an indication of the relative affordability of homes in the state. If you take out a home loan that’s more expensive than $548,250 anywhere in South Dakota, you’ll be taking on a jumbo loan.
For a 30-year fixed-rate jumbo loan in South Dakota, the average rate is 2.66% (Zillow, Jan. 2021).
South Dakota ARM Loan Rates
Adjustable-rate mortgages (ARMs) stand in contrast to fixed-rate mortgages in the sense that they have an interest rate that will change over the duration of the loan. An ARM will offer a lower interest rate for a set period of time between one and 10 years. When this introductory period comes to an end, the interest rate may increase or decrease but, as you might expect, it usually goes up.
It is important to note that there is a cap on how high the interest rate can go on a particular ARM. This cap will be listed in the loan’s terms and it is critical that the buyer assesses the maximum potential interest rate and ensures that it’s one that they can actually afford.
The average rate for a 5/1 ARM in South Dakota is 2.94% (Zillow, Jan. 2021).
South Dakota Mortgage Resources
Buyers in the Mount Rushmore State can reach their homeownership dreams with the help of resources available throughout the state.
The South Dakota Housing Development Agency provides aid for first-time buyers, repeat buyers, home improvement and down payment assistance:
- First-time homebuyers in South Dakota are eligible for low interest fixed-rate mortgage loans and cash assistance to finance their first home. They can also apply for the SDHDA mortgage tax credit, which reduces federal income tax and puts more money back in the buyers’ pockets.
- For eligible repeat homebuyers, the SDHDA provides loans with low fixed rates, down payment and closing cost assistance and reduced mortgage insurance.
- The Community Home Improvement Program offers low interest loans for eligible low-income applicants to improve or repair their homes.
GROW South Dakota can aid SD homebuyers in down payment and closing cost assistance, homeownership education, weatherization assistance to help make homes more efficient. The Dakota Dream Savings Fund matches a buyer’s savings of up to $2,000 with $3 for each saved dollar. With that program, a buyer could end up with a total of $8,000 toward their new home.
|Resource||Problem or Issue||Who Qualifies|
|South Dakota Housing Development Authority||Provides affordable loans, down payment assistance and home repair loans for South Dakota buyers.||First-time buyers and repeat buyers who fit income limits.|
|GROW South Dakota||Down payment and closing cost assistance, homeownership education, weatherization assistance and a savings match program.||Eligible homebuyers in South Dakota - varies per program.|
|USDA Rural Development - Single family loans||Offers payment assistance to increase an applicant’s repayment ability.||Applicants must be without decent, safe and sanitary housing; Be unable to obtain a loan from other resources on terms and conditions that can reasonably be expected to meet; Agree to occupy the property as your primary residence; Have the legal capacity to incur a loan obligation; Meet citizenship or eligible noncitizen requirements; Not be suspended or debarred from participation in federal programs.|
The United States Department of Agriculture Rural Development program offers financial assistance to residents in rural communities across the nation. Qualifying applicants in South Dakota can access loans and grants to put toward the purchase of a new home.
South Dakota Mortgage Taxes
South Dakota charges transfer taxes on real estate, so be prepared for that if you’re selling as sellers typically pay this fee. The transfer tax is $0.50 per $500, or 0.10%.
Homeowners across the U.S. are allowed to deduct the mortgage interest that they pay throughout the year from their taxable income when they file their federal income taxes.
South Dakota Mortgage Refinance
Are you a South Dakota resident looking to refinance? If so, the Home Affordable Refinance Program (HARP) is no longer an available avenue. Instead, Fannie Mae has the High Loan-to-Value Refinance Option.
Best Places To Get A Mortgage
SmartAsset’s interactive map highlights the best counties in the U.S. (and in each state) for securing a home mortgage. Hover over states and counties to see rankings and data points for each region, or use the map’s tabs to view the top counties for each of the factors included in our analysis.
Methodology In order to determine the best places in the country to get a mortgage, our study compared four factors, including overall borrowing costs, likelihood of securing a mortgage, property taxes and annual mortgage payments.
To calculate the overall borrowing costs, we analyzed the expected costs throughout the first five years for a $200,000 mortgage with a 20% down payment, including closing costs. We calculated the ease of getting a mortgage as the ratio of mortgage applications to mortgage originations (secured mortgages) in each county. Annual mortgage payments are a measure of the annual principal and interest payments for a $200,000 loan in that location using average mortgage rates in each county.
Finally, we ranked locations based on these four factors, giving equal weight to each factor. The areas with the lowest average rankings are the best places to get a mortgage.
Sources: Mortgage Bankers Association, US Census Bureau 2018 5-Year American Community Survey, Informa, Bankrate, government websites, SmartAsset