What is the maximum assumption fee for a mortgage loan in South Carolina?

In South Carolina, the maximum assumption fee for a mortgage loan is determined by specific regulations that are aimed at establishing a cap on the fees charged for assuming an existing mortgage. The correct answer indicates that the maximum fee is the lesser of 1% of the balance or $400.

This structure ensures that the fee remains manageable and does not unduly burden the borrower with excessive costs when assuming a loan. The limitation to 1% of the balance ensures that larger loans do not incur disproportionately high fees, while the cap of $400 guarantees that in cases of smaller balances, the fee remains reasonable and predictable.

The other choices suggest either a larger fee structure or a flat rate that does not consider the balance of the loan, which could lead to either excessive fees on larger loans or insufficient compensation for the lender involved in the assumption transaction. Therefore, understanding these regulatory limits is crucial for anyone working within mortgage lending in South Carolina.