How to Get a Home Mortgage in South Dakota

Picking the right South Dakota home mortgage loan can be a big job. But as with any daunting task, you can take the edge off by breaking the process down into easy steps. Follow these steps to getting a South Dakota home mortgage loan.

Difficulty: Easy

Instructions

1. Review your credit report. Your credit score will have a big impact on the interest rates and types of loans available to you. Correct any errors in the report before you begin the loan process.

2. Consider taking a home buyer education course. South Dakota offers a program called Homeownership Education Resources Organization (H.E.R.O) that offers classes in many cities. You can get close guidance to help you manage your finances and choose the right home.

3. Research the many South Dakota and federal homeownership assistance programs available for senior citizens, disabled, first time buyers, low-income buyers, single parents, veterans, senior citizens, and rural home buyers, such as the Governors House program, the First Time Homebuyer program and the Mortgage Assistance program.

4. Visit these government sites for detailed information on the programs:
   • South Dakota Home Ownership Overview
   • USDA South Dakota Rural Development Program
   • South Dakota Homeownership Assistance Programs

5. Shop around for the best rates at credit unions, banks, mortgage brokers and online mortgage companies. South Dakota has some of the highest interest rates in the nation but there is no sales taxes on property transactions.

6. Get pre-approved for a home loan. This will speed the process when you have found the right home. Provide all necessary documentation, such as proof of employment, tax returns, pay stubs and any other specific data.

7. Get a real estate agent, and start looking at homes in the areas that best fit your lifestyle. Real estate agents have many resources to draw upon, including access to more homes for sales and a wider base of knowledge and familiarity with the process

8. Finalize the loan application process with your lender, and put an offer on a home.

9. Close on the house, pay all related fees, and expect to begin paying back your lender shortly.

Tips & Warnings

• Do not let a real estate agent pressure you to buy a specific home, as they may have another agenda.
• Before you sign anything, make sure that you thoroughly understand all the terms of the mortgage contract.
• Make sure you shop around for the lowest interest rates. Even one quarter of a percent can mean thousands of savings over a 30-year mortgage.
• Have your prospective home professionally inspected. Discover problems that may exist before the deal is finalized.
• Never pay a lender to apply for a loan. No legitimate lenders will ask you to pay them to see if they will give you money for a home.
• Make sure that the title of the home is clear of liens before you purchase it.
• Beware of loan fraud. There are some unethical agents and lenders out there that will try to convince you to bend the rules by providing false information or filling out circuitous paperwork.
• Learn more about predatory lending schemes from the U.S. Department of Housing and Urban Development. Predatory lenders are those lenders that intentionally coerce consumers into contractual loans with unusually high payment terms and interest rates, often directed at uninformed borrowers or those with poor credit.