South Dakota Mortgage Calculator

Best mortgage lenders in South Dakota

The most popular mortgage lenders in South Dakota operate nationwide. These include such recognizable names as Change Home Mortgage, Rocket Mortgage, Morty Inc. Several lesser known but trustworthy options include South Dakota-based Blue Ribbon Mortgage & Investments, BankWest Mortgage.

How to calculate mortgage payment in South Dakota

Use our simple and user-friendly mortgage calculator SD to evaluate your future monthly expenses. A detailed instruction follows below.

Why and How to Use Our Mortgage Calculator

Use our house payment calculator for comprehensive financial planning in South Dakota. Let’s take a closer look at each field in order to gain a better understanding of the mortgage in South Dakota parameters.

The initial piece of information we need is the home price, which represents the amount you intend to spend on your future property. A down payment is the upfront portion of this price. To avoid expensive insurance premiums, it's advisable to come up with a down payment of at least 20% (for conventional loans). The remaining amount constitutes the principal, which is 80% of the home price if you have a 20% down payment.

A loan term is the duration over which you'll fully repay your mortgage through scheduled payments. Fixed-rate conforming loans typically have a maximum term of 30 years, while adjustable-rate options often have shorter terms.

An interest rate is a fixed or variable percentage of the principal that you'll pay over the loan's duration. It's important to note that you're actually charged an annual percentage rate (APR), which isn't exactly the same as the interest rate. While the interest rate forms the majority of the APR, the latter also includes various fees such as origination fees, closing costs, and insurance payments.

For more precise assessment, the interest rate used for these calculations is based on the current mortgage rates in South Dakota, given a $400,000 home price and a 10% down payment.

Median property taxes in South Dakota counties

Property taxes are another crucial factor to take into account when choosing your future home. In many cases, lenders require the establishment of a mortgage escrow account to ensure that the borrower remains current with their tax and insurance obligations.

Source: American Communities Survey 2016, U.S. Census

South Dakota Housing Market 2024

Over the past year, there has been a significant rise in the housing market value in South Dakota. This trend builds upon a longstanding pattern that was further accelerated by the COVID pandemic. However, it's worth noting that the rate of growth has slowed compared to the previous year. Additionally, both purchase and refinance rates have been steadily increasing for some time and are anticipated to continue rising in the near future.

How do I calculate my mortgage payment?

The most convenient way to do this is to make use of our calculator. It's powered by a simple formula, which you can also use to calculate the amount to be paid by hand:

M = P*i(1 + i)^n / (1 + i)^n – 1

M – estimated monthly mortgage payment;

P – principal;

I – monthly interest rate (to determine it, divide your annual mortgage rate by 12);

N – the loan term expressed in months (in other words, the overall number of monthly payments)

Imagine you are applying for a 15-year mortgage loan with a fixed 6.99% APR (which is .0699 as a unit fraction). The house costs $500k, with 10% ($50,000) to be paid down. The principal amount (P) will be equal to 90% of the initial home cost ($500,000 – $50,000 = $450,000).

I = .0699 % / 12 = .005825%.

Finally, let’s convert the loan length from years to months: N = 15 * 12 = 180.

M ($) = 450,000*.005825(1 + .005825)^180 / (1 + .005825)^180 – 1 ≈ 4042.

So, you are going to pay about $4042 a month.

It is important to note that the calculated M value is approximate, as no extra fees are taken into account.

Tips for first-time home buyers in South Dakota

To begin with, there are several federal agencies such as USDA, FHA, and VA that provide loan guarantees to eligible borrowers. These programs offer various options that can align with the financial constraints of many first-time homebuyers.

Besides these government-guaranteed programs, it is worth considering some offers from UHC (South Dakota Housing Corporation) available to South Dakotans. In particular, first-time home buyers can apply for FirstHome – down payment and closing costs assistance program, if they qualify for a FHA loan and their FICO score is at least 660. This option covers up to 6% of the loan amount toward down payment and/or the closing costs. It is important to note that this option comes in the form of a 30-year-fixed-rate second loan only. If you do not qualify for the FirstHome program, do not despair. South Dakota Housing Score Loan is an alternative program that covers up to 4%. The minimum satisfactory credit score is 620.

Here are some valuable tips for those entering the housing market for the first time:

1. Get pre-approved beforehand. This enhances your credibility in the eyes of potential sellers. It's advisable to obtain pre-approval letters from multiple lenders, ideally two or three.
2. Compare different mortgage rates. Consider at least three lenders to ensure you get the best possible terms for your mortgage.
3. Do preliminary calculations based on the amount you have been pre-approved for. This will help you budget for future expenses effectively.
4. Set aside for a down payment as much as possible – and as early as possible. The down payment will decrease the principal amount, which, in turn, can reduce your potential expenses. So it is important to start saving in advance.
5. If you are eligible for a VA loan, consider this option first of all.
6. Consider government-backed plans, as well as local assistance programs. There can be tempting offers – don't miss the boat.
7. Pay off previous debts, if possible.