Homeownership in Pennsylvania is on the rise — its rate in 2022 was around 4% higher than the U.S. average. The uptick brings up a key aspect of buying a home: the mortgage. In simple terms, a mortgage is a loan you secure to purchase a house. In the Keystone State, finding the right one involves weighing various factors, a crucial one being the mortgage rate. A better rate not only saves you money but also improves your overall mortgage experience. To make the most of this opportunity, compare mortgage rates in Pennsylvania for the most favorable terms.
Current Mortgage Rates in Pennsylvania
The national homeownership rate in 2022 stood at 65.9%, while Pennsylvania's rate was 70.7%, according to FRED Economic Data. The state's higher rate could be influenced by favorable mortgage options available to residents.
Pennsylvania generally offers more attractive mortgage rates compared to the national averages. A 30-year fixed-rate mortgage in the state averages 6.59%, lower than the U.S. average of 6.96%. The 15-year fixed rates are at 6.25%, closely matching the national figure of 6.26%. As for 5-year adjustable rates, they stand at 7.0%, a tad below the U.S. average of 7.09%.
Mortgage rates aren't set in stone — they can change due to economic trends or Federal Reserve actions, among other factors. Keeping an eye on current rates is advisable so you can spot when they're more favorable for you. And the state offers various mortgage types, each with its own rates. So, for the best mortgage rates in Pennsylvania, exploring different mortgage options is key. The rate table will let you compare and make an informed decision.
Finding the Best Mortgage Rates in Pennsylvania
Mortgage rates have a major impact on your financial well-being. A lower rate can save you thousands over the life of your loan and even free up monthly cash flow. For example, the difference between a 6% and a 5.5% rate on a $300,000 mortgage can amount to nearly $30,000 over 30 years. With that kind of money at stake, it's wise to learn how to snag the best mortgage rates in Pennsylvania.
Negotiate Mortgage Rates. Before you talk to a lender, equip yourself with data. Know the average mortgage rates in Pennsylvania and be prepared to discuss your strong financial points, such as a steady job or a high credit score. Use these as bargaining chips to negotiate a lower rate.
Consider Points. Mortgage points are a way to buy down your rate. Each costs around 1% of the total loan amount and can reduce your mortgage rate by approximately 0.25%. Say you have a $200,000 loan — one point would cost you $2,000 upfront but could save you a lot more in interest over the course of the loan.
Bring in a Co-Borrower. Adding a co-borrower with a stronger financial profile can often lead to a better mortgage rate. Since lenders look at the combined financial picture of both applicants, it can be a powerful boost. However, remember that a co-borrower will also share responsibility for the loan. Make sure both parties understand and agree to the terms.
Leverage Relationships. If you've been a long-term customer with a particular bank or credit union, you might be eligible for a loyalty discount on your mortgage rate. These are usually small reductions of about 0.25%, but every bit helps. It's worth scheduling a meeting with a customer service representative to discuss this option.
Clean Up Your Finances. One key factor that lenders scrutinize is your debt-to-income ratio. Lowering it can tip the scales in your favor for a lower mortgage rate. You can either reduce debt by paying off loans or credit cards, or increase your income, perhaps by picking up freelance gigs or part-time work.
A thoughtful approach to finding the best mortgage rate can seriously pay off financially. From taking advantage of existing relationships to applying with a co-signer, these strategies can influence mortgage rates in Pennsylvania in your favor.
Mortgage Types in Pennsylvania
The average home value in the United States is around $349,770, while in Pennsylvania, it's more affordable at approximately $257,797. The lower average home value offers potential homebuyers an advantage since you'll likely need a smaller mortgage. That translates into lower monthly payments and possibly a shorter loan term.
Even though homes are generally less expensive, a mortgage can still be a valuable tool in helping you purchase one. It enables you to buy now and pay over time, rather than paying in cash in full. You've got multiple options for mortgages in Pennsylvania, making it easier to find a loan that fits your situation.
Typical Eligibility Requirements
Why Consider it?
Understanding different mortgage types is crucial, but equally important are rate structures. Knowing whether a fixed-rate or an adjustable-rate mortgage suits you can make a difference in your long-term financial planning. It affects how much you'll pay over the life of the loan and how you manage your monthly budget.
Fixed-rate Mortgages: The interest rate is set in stone for the loan's entire term. It's ideal for those who value consistency in monthly payments and plan on staying in the home for many years. On the flip side, these often start with slightly higher rates.
Adjustable-rate Mortgages (ARMs): The rate isn't fixed and will adjust after a certain period. If you're planning to sell or refinance before the rate changes, this could be advantageous. However, you must be prepared for fluctuating payments.
When prepping for your homebuying journey in Pennsylvania, knowing your options for mortgage types and rate structures provides you with the fullest picture. Armed with this information, keeping an eye on mortgage rates in Pennsylvania can help you lock in the best terms for your situation.
A mortgage calculator is available on MoneyGeek. It lets you input different variables like loan amount, down payment and interest rates. By tweaking these numbers, you can see how each element affects your monthly payment. It's a fantastic way to gauge what you can afford and identify the best mortgage rates in Pennsylvania for your budget. You can feel more confident and informed about your mortgage choices as a result.
How to Get a Mortgage in Pennsylvania
Understanding the end-to-end process of securing a mortgage in Pennsylvania can make a world of difference in your homebuying experience. Knowing what to expect allows you to prepare accordingly, avoiding last-minute surprises and possibly saving money. We mapped out a step-by-step guide to make the process more transparent and manageable.
Check Your Credit Score.
Your credit score is the gateway to your mortgage options. Obtain a free annual credit report from one of the major credit bureaus, and if you find inaccuracies, dispute them immediately. Consider taking a few months to improve your credit standing If your score is on the lower side. You can achieve this by paying down debt and ensuring timely bill payments.
Determine Your Budget.
Understanding your financial capabilities is crucial. Use an online calculator like MoneyGeek's to estimate your monthly mortgage payments. It will give you a clear picture of what you can realistically afford.
A pre-approval letter from a lender gives you bargaining power when house-hunting. It tells sellers you're a serious, qualified buyer. To get pre-approved, you'll need to provide financial documents like tax returns, W-2s and recent pay stubs.
Not all mortgage offers are created equal. Get quotes from multiple lenders to compare terms and rates. Take note of additional fees and ask for a loan estimate to make an apples-to-apples comparison.
Choose a Mortgage Type.
Based on your financial situation and long-term plans, decide on the kind of mortgage that suits you best. Conventional, VA, FHA and USDA loans each have their eligibility criteria and benefits. Carefully weigh the pros and cons of each.
Lock in Your Rate.
After selecting a lender and loan type, lock in your interest rate. It means that even if market rates change, your agreed-upon rate remains the same until closing. Usually, rate locks last for 30 to 60 days.
When closing, you'll sign all the legal documents to finalize the loan. Ensure you review every line before signing, and don't hesitate to ask questions if something is unclear.
Knowing each step doesn't just get you closer to your dream home. It also primes you for snagging the best mortgage rates in Georgia, optimizing your long-term financial well-being.
Mortgage Programs in Pennsylvania
When diving into homeownership, keep in mind there might be hidden costs like home maintenance and property taxes. But don't worry — the Pennsylvania Housing Finance Agency has your back. They offer mortgage programs that make owning a home more affordable, freeing up your budget for those unexpected expenses. These programs range from home purchase loans to assistance loans, aimed to ease the financial burden. If you're eyeing mortgage rates in Pennsylvania, knowing about these options can give you an upper hand.
HFA PreferredTM (LoMI)
If you're aiming to secure the best mortgage rates in Pennsylvania, take a look at the HFA Preferred™ (Lo MI) program. This 30-year fixed-rate loan has a unique perk — lower mortgage insurance when you put down less than 20%. Plus, it's not just for first-time homebuyers. The income limits are based on your county, and you only need $1,000 of your own money for the down payment. You could even score a $500 grant for down payments and closing costs if you have good credit standing. It's a program that offers both flexibility and savings.
Keystone Home Loan Program
The Keystone Home Loan Program is a flexible option that suits various homebuyers, including veterans and those who haven't owned a home in the last three years. You can take advantage of this program if you stay within income and purchase price limits.
It's tailored to your financial situation, covering multiple loan types, like conventional, FHA and even no-downpayment options like VA and RD loans. A participating lender will help you figure out your budget and any credit kinks to iron out. If you're eyeing current mortgage rates in Pennsylvania, this program is a solid route to consider.
Keystone Government Loan
The Keystone Government Loan Program, also known as K-Gov, is a straightforward way to get your first mortgage through lenders approved by the PHFA. Whether you're considering FHA, RD or VA loans, this program follows federal guidelines to determine your eligibility.
Unlike other programs, you don't have to be a first-time homebuyer, and there aren't PHFA-specific income or price limits. If you're curious about mortgage rates in Pennsylvania, K-Gov gives you the flexibility to find a loan that fits. You might qualify for extra help with down payments or closing costs.
Keystone Flex with K-FIT
Keystone Flex with K-FIT is a special mortgage program that not only helps you secure your first home loan but also provides extra financial support for down payments and closing costs. Imagine getting a second loan that starts disappearing over ten years — that's K-FIT. If you're hunting for the best mortgage rates in Pennsylvania, this program could be your ticket.
To qualify, you'll need a credit score of at least 660 and meet specific income and price limits. Don't worry, first-time homebuyers aren't the only ones who can apply. Just make sure to complete a homebuyer education course to seal the deal.
Keystone Flex Purchase & Improvement with K-FIT
Keystone Flex Purchase & Improvement with K-FIT is a one-stop-shop loan program that makes buying and improving a home more manageable. If you're eyeing current mortgage rates in Pennsylvania, this plan can offer you a conventional first mortgage and up to $30,000 for home improvements. Plus, it pairs you with a K-FIT second loan that helps with down payments and closing costs, which is gradually forgiven over ten years. To get in, you'll need a credit score of 660 or more, meet specific income and price limits, and complete a homebuyer education course. So, you can buy, improve and save — all in one go.
The PHFA Grant offers a straightforward $500 boost to help with down payments and closing costs. What's great is you don't have to pay this grant back — it's free money toward buying your home. You can use it alongside the HFA Preferred™(Lo MI) loan for your first mortgage. You can also pair this $500 grant with the Keystone Advantage Assistance Loan Program. So, if you're looking to buy a home without breaking the bank on initial costs, this grant could be a real game-changer.
Keystone Advantage Assistance Loan Program
This program offers a second mortgage to help you with downpayment and closing costs when buying a home. You could get up to 4% of the home's price or $6,000 to help you get started. It comes with a 0% interest rate and you have ten years to repay it. It pairs well with PHFA's other first mortgage options like HFA Preferred, Keystone Government Loan and Keystone Home Loan. To qualify, you'll need a credit score of at least 660 and no more than $50,000 in liquid assets after closing.
Keystone Forgivable in Ten Years Loan Program (K-FIT)
This program offers a second mortgage to help cover down payment and closing costs when you're buying a home. You can get up to 4% of the home's price, capped at $6,000 and you repay it monthly over ten years at zero interest.
If you're searching for the best mortgage rates in Pennsylvania, this program can be paired with PHFA's first mortgage options like HFA Preferred (Lo MI) or the Keystone Government Loan. To qualify, you need a minimum credit score of 660 and your liquid assets should be below $50,000 after closing costs.
Programs for Persons with Disabilities
If you or a household member has a disability, the PHFA offers specialized home loan programs that come with competitive mortgage rates. Alongside these home loans, you can also access up to $15,000 in a no-interest loan for down payments and closing costs through the Access Downpayment and Closing Cost Assistance Program. If you need to modify your home for accessibility, you can get a zero-interest loan from $1,000 to $10,000 for things like ramps or wider doors. To get started, just reach out to a participating lender in PHFA's network.
HOMEstead Downpayment and Closing Cost Assistance Loan
The HOMEstead program could be your key to unlocking homeownership. If you qualify, you can get up to $10,000 as a no-interest second mortgage loan for your down payment and closing costs. 20% of this loan is forgiven every year for five years and you can pair this program with PHFA's Keystone Home Loan (known for some of the best mortgage rates in Pennsylvania). Just make sure your income and home price are within the program's limits, which differ by county. Note that most homes built before 1978 won't qualify due to federal lead paint rules.
Employer Assisted Housing (EAH) Initiative
If you work in essential roles like healthcare, education, or public safety, the Employer Assisted Housing (EAH) Initiative is designed for you. This program lets your employer chip in to help you buy a home.
When you get a PHFA mortgage with current mortgage rates in Pennsylvania, you can access even more perks. One standout feature is the Keystone Advantage Assistance Loan, giving you up to $8,000 interest-free for your down payment or closing costs. This benefit is like a boost to make homeownership more achievable. Check your eligibility and connect with a local lender to maximize your home buying power.
Frequently Asked Questions
Use our FAQ section as a roadmap, guiding you through questions you might have about mortgage rates in Pennsylvania.
About Christopher Boston
- FRED Economic Data. "Homeownership Rate for Pennsylvania." Accessed September 17, 2023.
- FRED Economic Data. "Homeownership Rate in the United States." Accessed September 17, 2023.
- Pennsylvania Housing Finance Agency. "Assistance Loans available with Home Purchase Loans." Accessed September 17, 2023.
- Pennsylvania Housing Finance Agency. "Home Page." Accessed September 17, 2023.
- Pennsylvania Housing Finance Agency. "Home Purchase Loans." Accessed September 17, 2023.
- Zillow. "Pennsylvania Home Values." Accessed September 17, 2023.