Buying a home in Pennsylvania
According to Zillow, the typical home value in Pennsylvania is lower than the typical value of $331,533 across the US. The typical home value in Pennsylvania is $254,015, and home values have increased 14.6% over the past year.
Historic mortgage rates for Pennsylvania
By looking at the average mortgage rates in Pennsylvania since 2010, you can see trends for 30-year fixed mortgages, 15-year fixed mortgages, and 7/1 adjustable mortgages:
Seeing how today’s rates compare to historic Pennsylvania mortgage rates may help you decide whether you’d be getting a good deal by getting a mortgage or refinancing now.
Mortgage calculator
To see how today’s Pennsylvania mortgage rates will affect your monthly payments, use our free mortgage calculator.
Plug in an interest rate and term length to see how much you’ll pay each month and what you’ll pay over the years.
Pennsylvania first-time homebuyer programs
If you get a mortgage from a participating lender, you may qualify for one of the following programs through the Pennsylvania Housing Finance Authority:
- Keystone Advantage Assistance Loan Program: Borrow up to 4% of the home sale price or $6,000, whichever is less. You can use this money for down payment or closing cost assistance. You won’t pay any interest, and you’ll pay back the loan over 10 years.
- Employer Assisted Housing Initiative: If your employee participates in this program, you can receive a Keystone Advantage Loan for up to $8,000.
- HOMEstead Down Payment and Closing Cost Assistance Loan: Borrow up to $10,000 for a down payment or closing costs. You won’t pay interest, and the government forgives 20% per year for five years. You must meet certain income and home purchase price requirements to qualify for this loan.
- Mortgage Tax Credit Certificate: Claim 20% to 50% of the interest you pay on the mortgage on your federal taxes, up to $2,000 per year.
- Programs for Persons with Disabilities: If you or a family member is disabled, you may receive money to make necessary improvements to the home you buy. You can also borrow up to $15,000 through the Access Down Payment and Closing Cost Assistance Program. You may be able to combine this assistance with other PHFA programs.
- First Time Home Buyer Program: Centre County has a local down payment assistance program that lends homebuyers up to $10,000.
- Federal Housing Administration mortgage: You can get a down payment of 3.5% with a credit score of at least 580, or get a mortgage with a credit score between 500 and 580 with 10% down using this loan, which is also called an FHA loan.
- United States Department of Agriculture mortgage: These loans, also called USDA loans, can be useful if you are a low-to-moderate income borrower looking to buy a home in a rural or suburban area.
- Veterans Affairs mortgage: These mortgages, also called VA loans, are for active-service military members or veterans, or spouses of members who have died and can provide lower interest rates than conventional mortgages.
Refinancing your mortgage in Pennsylvania
Mortgage refinance rates are at all-time lows right now, so it could be a good idea to switch your current mortgage for one with a better interest rate — especially if the new rate would be significantly lower.
You may decide to refinance with the same lender that gave you your initial mortgage, but it’s not always the best idea. A different lender may offer you a better deal the second time around. Shop around for a company that will offer the best interest rate and charge relatively low fees.
How to get a low interest rate on your mortgage
Here are some tips for landing a good interest rate on your mortgage:
- Save more for a down payment. With a conventional loan, you may be able to put down as little as 3%. But lenders reward a higher down payment with a better interest rate. Mortgage rates should stay low for a while, so you may have time to save a bigger down payment.
- Increase your credit score. Many lenders require a minimum credit score of 620 to receive a mortgage. But you can land a better interest rate with a higher score. The most important factor for boosting your score is to pay all your bills on time.
- Lower your debt-to-income ratio. Your DTI is the amount you pay toward debts each month, divided by your gross monthly income. Most lenders want to see a DTI of 36% or less for a conventional mortgage, but a lower DTI can result in a lower rate. To improve your DTI, pay down debts or consider opportunities to increase your income.
- Choose a federally backed mortgage. If you’re eligible, you might consider a USDA loan (for low-to-moderate-income borrowers buying in a rural area), a VA loan (for military members and veterans), or an FHA loan (not designated for any particular group). These loans typically come with lower interest rates than conventional mortgages. As a bonus, you won’t need a down payment for USDA or VA loans.
Improving your financial situation and choosing the right type of mortgage for your needs can help you get the best interest rate possible.
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