Conventional Loan
Conventional Loan Options in South Carolina With Less-Than-Perfect Credit
Reviewed by the HomeMath editorial team Updated 2026-08-06
Key takeaways
- Conventional loans can be approved with credit scores as low as 620, though scores below 660 usually require a larger down payment or higher interest rate.
- Minimum down payment for a conventional loan is typically 3% of the purchase price, but with a credit score under 660 you may need 5%‑10% to qualify.
- South Carolina commonly uses attorney‑conducted closings, which can add $500‑$1,500 to closing costs.
Understanding Conventional Loans with Imperfect Credit
Conventional mortgages are not insured or guaranteed by the federal government, so lenders rely heavily on the borrower’s credit profile to gauge risk. A credit score in the low‑620 range can still qualify, but lenders often offset the perceived risk with a larger down payment, a higher interest rate, or the requirement for private mortgage insurance (PMI).
Down‑Payment Options and Mortgage Insurance
The baseline down‑payment for a conventional loan is about 3% of the home’s price. When credit scores dip below the 660‑mid‑range, many lenders ask for a higher contribution—often 5% to 10%—to reduce their exposure. If you put down less than 20%, PMI will be required until you reach 20% equity, adding to your monthly payment.
South Carolina‑Specific Considerations
- Attorney‑led closings are the norm in SC. An attorney will handle title work, deed preparation, and the final settlement, which can add $500‑$1,500 to your closing costs compared with a title‑company closing in other states.
- The state’s Housing Authority offers down‑payment assistance programs that can be paired with conventional loans, helping borrowers cover a portion of the upfront cash needed.
- Property‑tax rates in South Carolina are generally lower than in many neighboring states, which can improve overall affordability.
Steps to Strengthen Your Conventional‑Loan Application
- Pay down existing debt to improve your debt‑to‑income (DTI) ratio.
- Check your credit reports for errors and dispute any inaccuracies.
- Save for a down payment that meets or exceeds the lender’s minimum for your credit tier.
- Shop multiple lenders to compare interest rates, PMI costs, and closing‑cost structures.
This article provides general information and should not be considered personalized financial advice. Always consult a qualified mortgage professional to discuss your specific situation.
FAQ
Can I get a conventional loan with a credit score below 600?
While some lenders may consider applicants with scores below 600, they typically require a substantial down payment (often 20% or more) and may charge a significantly higher interest rate. For many borrowers in this range, exploring FHA, VA, or USDA loans may be more practical.
Do I need private mortgage insurance if I put down less than 20%?
Yes. Conventional loans require PMI when the down payment is under 20% of the home’s purchase price. PMI protects the lender in case of default and is usually added to your monthly mortgage payment until you reach 20% equity.
How do attorney closings in South Carolina affect my loan process?
An attorney will handle title searches, prepare the deed, and oversee the settlement. This adds a layer of legal review that can increase closing‑cost estimates but also provides added protection against title issues. The process may take slightly longer than a title‑company closing, but it is standard practice in SC.
Are there any South Carolina programs that can help me with a down payment for a conventional loan?
The South Carolina Housing Authority offers down‑payment assistance programs that can be combined with conventional financing. Eligibility typically depends on income limits, purchase price caps, and completion of a homebuyer education course.
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