The median home price in Pennsylvania is $180,200. While it’s not the cheapest state to buy homes, Pennsylvania is still considerably cheaper than many other places in the country. Once you finally find an affordable home, make sure you take advantage of the lower prices with the right mortgage lender.
The best mortgage lender or bank can help you get competitive rates and give you excellent customer service. Read on for our top four mortgage lender picks and learn the five key factors that make up a good mortgage lender!
Choosing A Pennsylvania Mortgage Lender
We use five key criteria when choosing our best mortgage lenders. You can also use these criteria when doing your own lender research:
Loan Options Offered
Different loan types cater to different homebuyers, so what’s good for someone else may not be right for you. To help you make the best financial decisions when getting a mortgage, here are the most common loan products offered on the market:
Conforming mortgage: Any home loans valued below the Pennsylvania lending limits of $548,250 are called conforming mortgages. These are likely the most common loans you'll encounter.
Jumbo mortgage: Jumbo loans can exceed the state’s lending limits if you’re looking to buy a more expensive home. However, the higher loan amounts also come with higher rates.
Fixed-rate mortgage: These conventional home loans come with static interest rates. Their stability makes them popular among first-time homeowners.
Adjustable-rate mortgages (ARMs): Interest rates on ARMs readjust every year based on market index movements. They usually feature an initial period of fixed rates that last 3 to 10 years.
Government mortgage: Government-backed loans are offered by three organizations: the Federal Housing Authority, the U.S. Department of Agriculture, and the Department of Veterans Affairs. These loans often boast low mortgage rates and reduced down payment requirements.
Mortgage refinancing (refi): Refinancing a mortgage entails getting a new home loan to replace your existing one. It helps you save money by changing loan terms or securing better refinance rates.
Home equity lines of credit (HELOC): HELOCs are a credit card-like home equity loan that uses your home as collateral.
Pennsylvania interest rates change depending on your financial conditions and market movements, so it’s not a reliable way to measure affordability. Instead, we examine how easy it is to qualify for a lender with four criteria:
Minimum credit score: Your credit score is one of the primary ways for lenders to determine your rates. You usually need a minimum score of 620 to qualify for home loans, but some mortgage lenders allow you to get loans with a lower score – making their loans more affordable. If you have a bad credit score or a limited credit history, you could also opt for a lender that assesses nontraditional credit.
Minimum down payment: A 20% down payment is the standard for most home loan programs. However, your bank or lender may allow you to pay as little as 3% down if you can pay private mortgage insurance.
Closing costs: All of your payables during the mortgage process will be rolled into your closing fees, which are paid upon closing and may cost up to 5% of your loan amount. However, some lenders allow you to fold them into your interest payments.
Homebuyer assistance programs: Many states offer various assistance programs for repeat and first-time homebuyers. These programs usually include down payment assistance and closing cost grants.
A convenient and easily understandable application process is an important part of the mortgage process. We examine a lender’s application process with three main criteria:
Online capabilities: Most lenders nowadays offer a way to apply for loans online. Online application forms are especially important for people who can’t consult on their mortgages with a loan officer in person.
Online rate transparency: Online rate estimates are essential for people who want to rate shop and compare multiple lenders before applying for a mortgage. Some lenders display these estimates directly on the website, but other lenders may require you to talk to a loan officer first.
Length of the application process: Most loans take several weeks to close, or a little over a month at most. However, if a problem arises during your mortgage process, it may take longer to close.
Customer Service And Ratings
You want a lender or bank that knows its financial products and is always on top of any problems that may arise. We measure customer service with data from two organizations: the Better Business Bureau (BBB) and J.D. Power.
The BBB is an organization committed to quantifying a company’s trustworthiness by rating them with a letter grade ranging from A+ to F. It bases this score on how the company handles customer complaints and business transparency.
Meanwhile, J.D. Power researches consumer satisfaction from services provided by companies. These findings are then published in an annual study that ranks companies according to their customer satisfaction levels.
Access To Lender
Access to lenders can be the deciding factor whether or not to borrow from a mortgage provider. If a lender doesn’t originate mortgages in Pennsylvania, then you need to search for another lender.
The number of branches a lender operates is also important, especially to those who prefer in-person mortgage lending. Having good branch coverage over multiple states helps borrowers find a loan officer easier.
The Best Pennsylvania Mortgage Lenders
With the aforementioned criteria in mind, we’ve compiled a list of the best four Pennsylvania mortgage lenders. These lenders specialize in one particular part of the lending process, so identify your needs and choose the Pennsylvania lender that can best fulfill them.
Here is a quick rundown of key details from our top picks:
Rocket Mortgage by Quicken Loans
New American Funding
Home equity loans
Minimum FICO credit score
600 (VA & FHA)/620 (USDA)
Minimum down payment
BBB rating (A+ to F)
JD Power rating (out of 1000)
883 (best mortgage lender in 2020 study)
1. Rocket Mortgage By Quicken Loans – Best Online Mortgage Lender
As the online lending arm of major mortgage company Quicken Loans, all of Rocket’s mortgage loans applications are handled through its website. The company boasts a simple and newcomer-friendly application process that can be completed within thirty minutes. Moreover, it also offers instructional videos that prevent borrowers from getting lost in the entire process.
This lender offers a wide selection of loan products, both conventional and government-backed. However, it only offers VA and FHA loans for its borrowers. If you’re planning to take USDA loans, you may need to find another lender.
Since Rocket only allows you to apply online, we don’t recommend it if you prefer face-to-face interaction with a loan officer.
Lender availability: Rocket Mortgage by Quicken Loans is a nationwide online lender that doesn’t operate branch offices.
2. LoanDepot – Best For Refinancing
Refinancing makes up over 60% of LoanDepot’s loan volume. This specialization in refinances makes it one of the first choices for people seeking to refinance their homes.
Another thing that makes its refinance loans even more enticing is its “lifetime guarantee”. If you get a loan through this mortgage company, you won’t be charged any lender fees on subsequent refinances – meaning you save a lot of cash if you decide to refinance.
Lender availability: LoanDepot serves borrowers all across America through its website and 200 nationwide branch offices.
3. Guaranteed Rate – Best For Rate Transparency
One notable benefit of getting a loan through Guaranteed Rate is its transparency. By answering a short questionnaire about your home purchase plans and other key financial details, you’ll get a detailed rate estimate. While this process is somewhat more complicated than a rate calculator, you can still get an estimate without talking to a mortgage loan officer or giving contact information.
While Guaranteed Rate offers a complete suite of conventional and government loan types, this lender doesn’t offer home equity loans.
Guaranteed Rate’s BBB score is A-, somewhat lower than its peers that are mostly rated A+. This stems from a now-resolved 2020 government action regarding Guaranteed Rate’s FHA loan program.
Lender availability: Guaranteed Rate offers mortgages to nationwide customers. You can apply through its website or in one of its 300 branches located across 46 states.
4. New American Funding – Best For Nontraditional Credit
New American Funding specializes in serving mortgages for underserved demographics, especially black and Hispanic borrowers.
Instead of using automated underwriting models, New American Funding allows its home loan officers to manually underwrite loans. This way, it can approve loans that “make sense” instead of just relying on hard financial data. Since it isn’t quick to reject applications, it gives borrowers with nontraditional credit or limited income a better chance of being approved.
Lender availability: New American Funding offers mortgage loans nationwide through its website and 200 branches.
Home prices in Pennsylvania are considerably cheaper than most of the nation, so you’re more likely to find great home deals. However, you need a good mortgage lender or bank so you can get your new home at reasonable rates.
For more information, resources, and advice on home buying in Pennsylvania, contact Wesley Mortgage, LLC today! Our team is more than ready to help you prepare for your home buying journey in the Keystone State.