Overview of Pennsylvania Mortgages
Home to beautiful landscapes, mountain views and a rich history and culture, Pennsylvania has a lot to offer those who live there. Historically, Pennsylvania mortgage rates have shown variation above or below the national average rates. The vast majority of Pennsylvania counties’ conforming loan limits hold steady at $417,000, while certain county’s FHA limits are higher than average.
National Mortgage Rates
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Pennsylvania Mortgage Rates Quick Facts
Historical Mortgage Rates in Pennsylvania
Paramount U.S. historical sites, stunning national forests and Philly cheesesteaks: Pennsylvania has it all. Pennsylvania comes in at number six for most populous states in the country.
Pennsylvania mortgage rates see a bit of variation compared to the national average. Current state 2016 mortgage rates are higher than the national average.
Pennsylvania Historic Mortgage Rates
|Year||Pennsylvania Rate||U.S. Rate|
Pennsylvania Mortgages Overview
Houses in the Keystone State are more affordable than those in many other parts of the country. The average Pennsylvania home sells for $183,080. This is well below the nation’s average of $236,450, according to Zillow.
Pennsylvania Mortgage Rates
|Percentage of Homes||88.90%|
|Average Property Value||$123,937.40|
|Percentage of Homes||4.90%|
|Average Property Value||$146,412.23|
|Percentage of Homes||1.80%|
|Average Property Value||$141,788.23|
|Percentage of Homes||4.40%|
|Average Property Value||$87,873.39|
The conforming limit for every Pennsylvania county, save for Pike, is standard at $417,000. In Pike that limit spikes to $625,000. The FHA loan limits vary more across the state from the standard $271,050 all the way up to $625,500, again in Pike County.
Conforming and FHA Loan Limits by County
|County||Conforming Limit||FHA Limit|
Pennsylvania sellers must provide buyers with property disclosure statements. These statements include information on sewage disposal, insulation and the quality of the home structure. Despite this, a home inspection is always a good idea, as it helps the buyer feel confident that they are not going to run into major issues down the road.
30-Year Fixed Mortgage Rates in Pennsylvania
Looking for a mortgage in the Keystone State? The first option you should know about is a 30-year fixed-rate mortgage. This loan option gives buyers a long time to pay off the loan (30 years) and the interest rate remains the same for that entire time, making it easier to budget monthly payments as they stay constant.
Fixed rate mortgages are also offered in 15-year and 40-year terms. With a 15-year mortgage, you will be paying off the same amount of money in less time so your monthly payments will be higher.
40-year fixed-rate mortgages are less popular as buyers end up paying a lot in interest and it takes four decades to pay off the loan (unless they decide to refinance).
The average Pennsylvania mortgage rate for fixed-rate 30-year mortgages is 4.62%.
Pennsylvania Jumbo Loan Rates
Most Pennsylvania counties have conforming loan limits of $417,000. As mentioned previously, Pike County is the sole area in the state which has a conforming limit of $625,500. This is an indication of the overall affordability of purchasing real estate here.
If you take out a home loan that is greater than the conforming loan limit in that county, you will have what is called a jumbo loan. These outsize loans are considered riskier for lenders as greater amounts of money are on the line. Before you take on a jumbo loan, you should know that they are accompanied by higher interest rates. From a lender’s perspective the higher interest rate is a fair trade-off for the bigger risk.
The average jumbo loan rate in Pennsylvania is 4.46%.
Pennsylvania ARM Loan Rates
Another mortgage option is an adjustable-rate mortgage (ARM). An ARM typically offers a lower interest rate than a fixed-rate mortgage for an introductory period between one and 10 years. (The exact length of time depends on the loan’s terms.) Once that period ends, the interest rate can change by going up or down, though it usually goes up.
There are a few things you should keep in mind when considering whether an ARM is the right option for you. The first is that the number of times the interest rate can change over the life of the loan is stated in the terms. Similarly, the terms will specify the maximum possible height that the interest rate can reach. This means that you do know what you are getting into before you choose an ARM. It is critical that you carefully consider this maximum potential interest rate and decide whether it is one that fits within your budget.
The average rate for an ARM in Pennsylvania is 5%.
Pennsylvania Mortgage Resources
Keystone State buyers can apply for programs that help provide financial assistance for the homebuying process.
The Pennsylvania Housing Finance Agency provides loans for qualified buyers. PHFA loans offer fewer fees, down payment and closing cost assistance and up to $2,000 annually for the Mortgage Tax Credit Certificate.
The PHFA also provides funding for home restoration and repairs. These programs include the Access Home Modification Program, Renovate & Repair, Purchase Improvement Loan and PENNVEST Homeowner Septic Program.
|Resource||Problem or Issue||Who Qualifies||Website|
|Pennsylvania Housing Finance Agency||Homeownership loans, down payment/closing cost assistance, renovation funding.||Income-eligible PA residents.||http://www.phfa.org/homebuyers/|
|USDA Rural Development - Single family loans||Offers payment assistance to increase an applicant’s repayment ability.||Applicants must be without decent, safe and sanitary housing; Be unable to obtain a loan from other resources on terms and conditions that can reasonably be expected to meet; Agree to occupy the property as your primary residence; Have the legal capacity to incur a loan obligation; Meet citizenship or eligible noncitizen requirements; Not be suspended or debarred from participation in federal programs.||http://www.rd.usda.gov/programs-services/all-programs/single-family-housing-programs|
|Home Affordable Refinance Program||Refinancing.||Single family homes and condos that fit within lending loan limits.||http://www.harp.gov/|
Pennsylvania is part of the United States Department of Agriculture Rural Development program, which offers aid for safe, affordable housing. Loans and grants are offered to residents who are buying new homes (or repairing current homes) in rural areas.
Pennsylvania Mortgage Taxes
In Pennsylvania, there is a real estate documentary stamp tax of 1%. County rates vary widely, but typically the buyer and seller splits this fee.
Homeowners in Pennsylvania, as those anywhere in the country, are allowed to deduct the mortgage interest they pay from their taxable income when they file their federal income taxes. In some states, owners can also deduct mortgage interest when they file their state income taxes. However as Pennsylvania is one of 10 states which does not allow itemized deductions, this rule does not apply here.
Pennsylvania Mortgage Refinance
Refinancing in Pennsylvania? One resource that is available to you is the state’s Home Affordable Refinance Program. The Pennsylvania HARP works with different lenders to bring payment reductions and low closing costs to qualified participants. The program accepts single family homes and condos.
Best Places To Get A Mortgage
SmartAsset’s interactive mortgage map highlights the best counties in the country (and in each state) for securing a mortgage. Hover over counties and states to see data points for each region, or use the map’s tabs to view the top counties for each of the factors driving our analysis.
Methodology For many people buying a house means securing a mortgage. To determine the best places in the country to get a mortgage we looked at four factors: overall borrowing costs, ease of securing a mortgage, cheap property taxes and cheap annual mortgage payments.
To calculate the overall borrowing costs, we looked at the expected costs over the first five years of a $200,000 mortgage with a 20% down payment, including closing costs. We calculated the ease of getting a mortgage as the ratio of mortgage applications to actual mortgage originations (secured mortgages) in each county. We based annual mortgage payments on the annual principal and interest payments for a $200,000 loan in that location, using average mortgage rates in each county.
Finally, we ranked locations based on these four factors, and then averaged those rankings, giving equal weight to each factor. The areas with the lowest average rankings are the best places to get a mortgage.
Sources: Mortgage Bankers Association, US Census Bureau 2016 5-Year American Community Survey, Informa, Bankrate, government websites, SmartAsset