Ready for a Conventional Loan?

5 Key Steps to Qualify in South Carolina

A conventional mortgage—financed through Fannie Mae or Freddie Mac—often means lower long‑term costs than FHA or VA loans, but the bar is higher. Here’s a clear roadmap to get approved, whether you’re eyeing Charleston, Goose Creek, or any corner of the Palmetto State.

1. Hit the Credit‑Score Target (Usually 620+)
Most lenders set a 620 floor, though scores of 740+ unlock the best rates and smaller PMI premiums. Check all three bureaus, dispute errors, and keep credit‑card balances below 30 % of their limits for a fast boost.

2. Nail Your Debt‑to‑Income Ratio (DTI) Under 45 %
Conventional guidelines cap DTI around 45 % (sometimes 50 % with strong compensating factors). Add up monthly debt—student loans, auto payments, credit cards—then divide by gross income. Pay down balances or bump income (side hustle, co‑borrower) to tighten the ratio.

3. Plan for the Down Payment & Reserves
   • 3 % – 5 %: First‑time buyers can qualify with as little as 3 % down.
   • 20 %: Eliminates private mortgage insurance (PMI) altogether.
   • Reserves: Many lenders like to see 1‑2 months of mortgage payments “in the bank,” especially for second homes or multi‑unit properties common in coastal SC.

4. Source Your Funds Cleanly
Large, unexplained deposits are a red flag. Keep gift money (allowed from relatives) in your account at least 60 days, and save closing‑cost credits from sellers for your Loan Estimate. Consistency here prevents last‑minute underwriting delays.

5. Gather Documentation Early
Expect requests for:

• Two years of W‑2s (or full tax returns if self‑employed)

• 30 days of pay stubs

• Two months of bank statements

• ID and proof of any additional assets (401(k), brokerage)
  Having a digital folder ready speeds pre‑approval and gives you a negotiating edge when the perfect Charleston bungalow hits the MLS.

Next Step?

I’m Lisandro Diaz, Charleston‑based realtor with a network of reputable South Carolina lenders who specialize in conventional financing. Let’s review your numbers and craft a winning offer that fits your budget—and your future.