Mortgage lender closing cost rankings in South Dakota (2025)

South Dakota uses a non-judicial foreclosure process, meaning lenders can foreclose through a trustee sale without court involvement, though a judicial option also exists. The state uses mortgages as the primary security instrument. South Dakota is not an attorney-required closing state; title companies and escrow officers typically handle closings without mandatory attorney involvement. The state imposes a real property transfer tax (sometimes called a deed transfer tax) structured as a flat rate per dollar of consideration. Title insurance rates in South Dakota operate under a file-and-use regulatory model, meaning insurers file rates with the state Division of Insurance before use. South Dakota has no state income tax, which does not directly affect closing costs but influences overall cost-of-ownership calculations. The state repealed most limits on interest rates and fees in 1980, which historically attracted national credit card issuers. Prepayment penalty enforceability on residential mortgages is governed by a combination of state statute and federal Dodd-Frank QM rules.

Conventional loans dominate South Dakota's purchase market, representing 62.9% of originations (4,461 loans) with a median rate of 6.5% and the lowest median closing costs among loan types at $4,498, per 2024 HMDA data. FHA loans account for 20.4% of volume (1,449 originations), reflecting demand from first-time buyers in smaller cities and rural areas where incomes are moderate. VA loans make up a meaningful 14.1% share (1,000 originations), supported by military installations including Ellsworth Air Force Base near Rapid City. USDA loans represent 2.5% of volume (179 originations), serving the state's significant rural and agricultural communities where eligible zones are widespread.