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South Dakota is one of the few states remaining that offers both mortgage and Deed of Trust products to be used to secure financing for a home purchase. A mortgage is a standard contract between buyer and lender. A Deed of Trust includes a third party to the transaction. In a Deed of Trust the lender must place the deed to the property with a third party trustee until the loan is repaid. In states that offer both options, like South Dakota, lenders try to lean more towards the mortgage contract than the Deed of Trust. Also, a Deed of Trust is a non-recourse instrument which means the banks cannot attach any debt to your personal assets in the event of a foreclosure. Standard fixed rate mortgages are the most popular in the state followed by the adjustable rate loan. FHA, VA and USDA backing can all be obtained by the borrower.

South Dakota Mortgage Rates

Mortgage rates in South Dakota tend to be much lower than in other parts of the country. Availability of property for sale is one of the leading factors for this situation. Most of South Dakota is protected land and cannot be built upon. Of the remaining land, only one or two areas have high home prices, the rest fall below the national average. Lower housing prices always mean lower interest rates. Of course, loan type, credit score, employment and other financial matters will affect the interest rate. Different lending institutions may also cause the mortgage rate to vary.

South Dakota Refinance Rates

South Dakota refinance rates are equal to their mortgage rates and very similar to those in the surrounding states. Refinance rates will be lower on a first mortgage as well as if the refinancing is meant to lower interest or shorten length of loan. Rates will be higher if money is taken out of the available equity at closing time or if you suffer from a poor credit score.

South Dakota Mortgage Brokers And Lenders

Mortgage Brokers and Lenders are available throughout the state of South Dakota. Credit Unions and small private banks are very popular. Private lenders, larger banks and internet transactions are all allowed within the state. Many offer incentives to buyers such as a point purchase program that allows you to reduce interest rates. Most first time homeowner programs come directly from the lender in South Dakota.