Mortgage and Refinance Rates in Pennsylvania
Use our comparison table to compare refinance and mortgage rates in Pennsylvania
Today's Rates In Pennsylvania
What's the key to getting a mortgage in the Keystone State? Information. Know your options, understand the different types of loans, understand how your credit score and finances affect your ability to get a home loan and the rate you'll pay, etc.
That may seem like a big challenge, but we've got the tools to help you. Start with the current Pa. mortgage rates at the top of this page. Then browse through our collection of consumer mortgage articles to bring yourself up to speed on what you need to know, or use the search feature to find information on specific topics. Crunch numbers with our many mortgage calculators – there's one for every purpose. Then browse for lenders and brokers, or request personalized rate quote directly using our rate quote tool.
A big state like Pennsylvania has a wide range of housing markets. Buying a home in Philadelphia is different from buying one in Pittsburgh, which is different from Scranton, which is different from State College, which is different from Punxsutawney. But the nice thing is, the process of getting a mortgage is largely the same no matter where you are. And many mortgage lenders are licensed to do business online these days, and can serve you anywhere in the state -- so getting the best mortgage rates in Pa. is something you can do from the comfort of your own home!
That being said, there are a lot of choices to make, based on your situation. First-time homebuyer? Refinancing your current mortgage? Seeking a home equity loan or HELOC for home improvements? Long-time homeowner with plenty of equity and excellent credit looking for a second home? What works for one borrower might not be the best choice for another. Here's some of the things to consider when looking for the lowest mortgage rates in Pa.
FHA loans
Pa. borrowers will find that FHA loans are the classic first-time homebuyer mortgage, and with good reason. They offer low down payments, modest credit requirements and attractive rates, particularly for borrowers with less-than-ideal credit.
FHA loans can also be a good choice for any Pa. homebuyer with weaker credit or limited finances, such as someone coming out of bankruptcy or perhaps a divorce.
While the low down payments – Pa. residents can get an FHA loan with as little as 3.5 percent down – may be their most widely known feature, their benefits for borrowers with lower credit scores are equally important. Many lenders will approve FHA loans for Pa. borrowers with credit scores of 600 or lower. Not only that, but FHA mortgage rates aren't tied to credit scores in the way conventional loans are, meaning borrowers with lower scores can often get a better mortgage rate than they could with a conventional loan.
Conventional mortgages
For Pennsylvania borrowers with good credit, the best mortgage rates are often found through what are often called conventional mortgages, those backed by Fannie Mae or Freddie Mac, the government-affiliated entities that back the majority of residential mortgages in this country.
Conventional mortgages offer excellent rates for borrowers with good-to-excellent credit (FICO scores of 720 or higher), with lower fees than FHA loans. Down payments can be as low as 3 percent, but better rates are available to borrowers who can put down more.
Pennsylvania borrowers will find that both FHA loans and conventional mortgages require monthly payments for mortgage insurance on any loan with less than 20 percent down. However, conventional loans allow you to eventually cancel this insurance when you reach 20 percent home equity, whereas with FHA loans you need to carry it for the life of the loan if you put down less than 10 percent.
Home Equity Loans
Though they aren't often referred to that way, home equity loans are a type of mortgage, which is any loan secured by the value of real estate. But rather than buying a home, you're simply using part of your financial state in the property as collateral for a loan.
Home equity loan rates in Pa. are a bit higher than rates on regular mortgages, but they're still considerably lower than rates on unsecured loans, like most credit cards.
Home equity loans come in two main types. There's the standard home equity loan, where you borrow a sum of money and then pay it back over time, and a home equity line of credit, or HELOC, where you have a credit line you can borrow against as you need to and usually don't have to begin repaying it right away. Regular home equity loans usually have fixed-rates, whereas HELOCs are adjustable rate.
If you're thinking about a home equity loan or HELOC, you can use the form at the top of this page to request free personalized home equity rate quotes from Pa. lenders.
Refinance
You can refinance just about any type of loan, though for consumers refinancing is most commonly associated with mortgages. Refinancing is simply taking out a new loan to pay off the old one, usually because you can get better rates or other more favorable terms. You can refinance your primary home loan, but also home equity loans and HELOCs as well.
Refinance rates for any home loan in Pennsylvania are going to be similar if not identical to the rates on the same type of loan taken out as an original lien. From the lender's point of view, there's not much difference between a mortgage used to purchase a home and one used to refinance another mortgage; they're both home loans. Although refinancing borrowers can often get relatively better terms when they refinance than when they first purchased the home, due to greater accumulated equity and improved credit scores from years of making mortgage payments.
Home equity loans can be refinanced as well. In fact, this is a popular option for HELOCs that are nearing the end of their draw period, which is the time you can borrow against the line of credit. Refinancing gives you a new draw period, so you can continue to use the line of credit, and also postpones having to begin repaying loan principle, so your monthly payments don't jump.
ARMs
Adjustable-rate mortgages (ARMs) are actually a feature of certain types of loans – any of the loans described above can be obtained as ARMs. With an ARM, the mortgage rate adjusts from time to time to reflect changes in market conditions, rather than being a single fixed rate that is unchanged for the duration of the loan.
Because they aren't locked in to a single rate, ARMs can offer a lower initial rate to begin with. With many ARMs, this rate is locked in for the first few years of the loan before it starts resetting, reducing uncertainty. ARMs are often locked in for the first three, five or seven years, then adjust every year after. As a result, such loans are commonly called 3/1, 5/1 and 7/1 ARMs, respectively.
The popularity of Pennsylvania adjustable-rate mortgages (ARMs) tends to fluctuate with economic cycles. They're often a popular choice for people with large mortgages who want to minimize mortgage payments or Pa. homebuyers who plan on moving in a few years and don't need to lock in a rate long-term.
Pa. Mortgage Loan Rates
You don't have to be a mortgage expert to get the best loan rates; but knowing more will certainly aid in your decision-making. Here are a few essential tips:
- The annual percentage rate (APR) allows for the comparison of mortgages with different closing costs.
- The amortization of your prospective mortgage loan is very important. In other words, know how the payments are applied to the debt balance over time.
- Low payments are a concern, but not your only concern. Depending on the amortization schedule, a mortgage with a low payment might be affordable in the short-term, and expensive in the long-term.
- Second mortgages have higher rates than refinanced mortgages.
- ARMs begin with lower rates than fixed-rate mortgages (FRMs), but over time, the rate can adjust to much higher levels.
Experimenting with mortgage calculators is a great way to hone your knowledge. Mortgageloan.com has more than 100 different calculators, allowing you to test rates, amounts, and loan types against your budget. You can even account for different scenarios; if you intend to remodel, for example, try comparing a complete refinance to the combination of a first mortgage and home equity loan.
It's important to meet with different lenders and submit several loan applications. You can find suitable lenders in our Pennsylvania broker directory.
