Recently, during consultations in Columbia, there have been cases where down payments are ready, but approvals are delayed at the document stage. In these situations, it is often the income verification or debt-to-income ratio that causes issues, rather than the amount of the down payment itself. While it is important to consider this point separately from having a sufficient down payment, it is also true that even a smaller down payment can lead to smooth approvals if the documentation is in order.

According to Zillow, the median home price in Columbia is $221,883, which is a 3.8% increase from the previous year. Based on this price, a 3.5% down payment would be $7,770, 5% would be $11,100, 10% would be $22,200, and 20% would be $44,400. This area has a lower median price compared to other major cities, so a 20% down payment is relatively less burdensome. However, if there is not enough initial cash, starting with a 3.5% or 5% down payment and accepting PMI could be a realistic alternative.

When looking at the monthly principal and interest payments, the difference becomes clearer. With a 30-year fixed rate of 6.6%, a 5% down payment results in a monthly payment of $1,347, while a 20% down payment results in a monthly payment of $1,134, creating a difference of $213 each month. This shows that the more you put down, the better it is, but it is also important to consider that more initial cash is tied up.

Filling in more than 20% allows you to start without PMI, which is advantageous, but it also means that more initial cash is tied up, which is a disadvantage.

The effective property tax rate in South Carolina is around 0.51%, which is lower than the national average. The primary residence is assessed at 4% of its market value, and you can receive a Homestead Exemption of up to $50,000, which is beneficial. However, investment properties are assessed at 6%, which can increase the tax burden.

SC Housing operates several down payment assistance programs. First-time homebuyers can receive $10,000 through the First-Generation Homebuyer Program, and teachers or firefighters can receive $10,000 through Palmetto Heroes. The County First Initiative provides up to $8,500 for low-income residents, and the repayment obligation is waived after three years of residency. While these supports are largely beneficial, it is important to note that the eligible counties or professions are limited.

Factors that increase approval rates can be summarized as credit score, DTI, and income verification. A score above 780 has an interest rate of 6.59%, while those in the 700s have a rate of 6.91%, showing a difference in rates. For DTI, a backend ratio of 43% or lower is recommended. Wage earners should show income stability with W2s and pay stubs, while self-employed individuals should provide two years of tax returns.

Based on a household monthly income of $6,000, it is advantageous to keep the front-end ratio below 28%, which means keeping monthly payments for principal, property tax, and insurance within $1,680. If the backend ratio exceeds 43%, which is $2,580, it could negatively impact approval chances.

Getting pre-approved is beneficial, but if you take out a new loan or change jobs just before closing, that advantage may disappear. Keeping a few months' worth of living expenses as reserves can also positively affect approval.

Korean families tend to prefer school districts near Erwin Road and Harbison Creek. Since school district boundaries change frequently, it is advisable to refer to GreatSchools ratings, but check the actual assigned school based on the address before signing a contract. For investors looking for rental income, demand near the state capitol and university is relatively stable, but it is also wise to consider vacancy risks.

This article is not investment or legal advice, and it is recommended to consult with local loan officers and real estate professionals before proceeding with any contracts or loans.