Compare mortgage rates in Tennessee.

Introduction to Mortgage Interest Rates

Mortgage interest rates are the fees charged by lenders for borrowing money to purchase a home. These rates are calculated using a complex combination of factors that can be broadly categorized into two buckets: the state of the economy and the borrower’s financial status.

This comprehensive guide provides an analysis of mortgage rates in Tennessee, including the factors affecting rates, types of mortgages available, and strategies for securing a competitive mortgage rate.

How Interest Rates Affect Home Affordability

Mortgage rates have a bigger impact on home affordability than people realize. Even small interest rate changes can put homeownership out of reach for middle-income Americans. For instance, a 1.00% increase in the interest rate on a $400,000 mortgage can add over $250 to the monthly payment, requiring families to stretch their dollars even farther.

Should Homebuyers Wait for Interest Rates to Drop?

Many first-time homebuyers wonder if they should buy now or wait for interest rates to come down. While it’s true that rates fluctuate, there’s no guarantee that they will drop in the near future. And each year that goes by requires padding your down payment savings to keep up with rising home prices.

It’s important to note that homeowners can always refinance their mortgage after rates come down, potentially lowering their monthly payments. A mortgage refinance may allow homeowners to secure a lower interest rate, potentially reducing their monthly payments and overall borrowing costs.

Tennessee Mortgage Rate Trends

Understanding historical mortgage rates can provide valuable insight into where rates are headed. While rates in Tennessee have risen in recent years, they remain below historical highs. Indeed, they are currently around the 50-year average. This suggests that while rates may fluctuate, they are unlikely to experience a significant spike in the near future.

Note: The FHFA stopped reporting state interest rates in 2018.

Historical U.S. Mortgage Rates

For context, here’s a brief overview of historical U.S. mortgage rates:

•  1980s: Mortgage rates reached their peak in the early 1980s, with an average fixed rate over 18.00%.

•  1990s: Rates declined significantly in the 1990s, reaching an average fixed rate of around 7.00% by the end of the decade.

•  2000s: The early 2000s saw a period of relatively low rates, with an average fixed rate of around 6.00%.

•  2010s: Rates remained low throughout most of the 2010s, with an average fixed rate of around 4.00%.

•  2020s: Rates began to rise in the early 2020s, with an average fixed rate of around 6.00% in 2023.

Factors Affecting Mortgage Rates in Tennessee

Understanding the factors that influence mortgage rates is essential for homebuyers on a tight budget. These factors include:

Economic Factors

•  The Fed: The federal funds rate serves as a benchmark for other interest rates, including mortgage rates.

•  Inflation: When inflation rises, the purchasing power of money decreases, making it more expensive for lenders to lend money. As a result, they may increase interest rates to compensate.

•  Unemploment rate: Lower unemployment can result in higher mortgage rates. A low unemployment rate indicates a strong economy, which typically leads to increased demand for housing. This increased demand puts upward pressure on home prices and, not surprisingly, mortgage interest rates.

Consumer Factors

•  Credit score: A higher credit score generally results in a lower mortgage interest rate.

•  Down payment: Increasing the down payment can reduce the mortgage interest rate.

•  Income and assets: A steady income is important to lenders, who will check your employment history as well as your salary. Assets like investments and emergency savings also reassure lenders that you could still pay your mortgage in the case of a job loss or other financial setback.

•  Type of mortgage loan: Certain types of mortgages tend to have lower rates. For instance, adjustable rate mortgages (ARMs) typically offer lower initial rates than fixed-rate mortgages. Some government-backed loans, like VA mortgages, can also have lower rates. And a shorter loan term usually comes with a lower rate than longer terms.

Types of Mortgages Available in Tennessee

Various home loan types — including fixed-rate, adjustable-rate, FHA, VA, and USDA loans — are available to meet the needs of different homebuyers. Which one do you have your eye on?

Conventional Loans

Conventional loans are not backed by the government and are offered by banks, credit unions, and online lenders. They can be fixed-rate or adjustable-rate, and have a maximum allowable amount of $832,750 in most areas of Tennessee; in higher priced counties, the limit is $1,029,250. There are two main types of conventional loan:

•  Fixed-rate mortgages maintain the same interest rate throughout the life of the loan, ensuring that the principal and interest payments remain constant. Fixed-rate mortgages are available in terms of 10, 15, 20, or 30 years.

•  Adjustable rate mortgage (ARM) ARMs initially offer a lower rate than fixed-rate loans. However, after an introductory period, typically 5 or 10 years, the interest rate can adjust periodically based on a specified index. ARMs can be beneficial for borrowers who plan to sell their home before the fixed-rate period ends.

FHA Loan

FHA loans are insured by the Federal Housing Administration and are designed for borrowers with less-than-perfect credit or a smaller down payment. FHA loans typically have more lenient eligibility requirements than conventional loans and allow for down payments as low as 3.5%.

VA Loans

VA loans are available to veterans, active-duty military members, and some Reserve and National Guard members. VA loans do not require a down payment and offer competitive interest rates. If you think your service record might entitle you to a VA loan, the next step is to apply for a .

USDA Loans

USDA loans are designed for low-income borrowers looking to purchase a home in a rural area. USDA loans are backed by the U.S. Department of Agriculture (USDA) and do not require a down payment.

Jumbo Loans

Jumbo loans are conventional loans that exceed the conforming loan limit set by the Federal Housing Finance Agency (FHFA). As noted above, the conforming loan limits in Tennessee are $832,750, depending on the area. For mortgages above that amount, you need a jumbo loan, which typically requires a larger down payment and may have higher interest rates than conforming loans.

Popular Places to Get a Mortgage in Tennessee

Securing a mortgage often depends on choosing the right location, where home prices and the cost of living are affordable.

When you compare Tennessee’s costs to the cost of living in the U.S. as a whole, the Volunteer State is 10% lower than the national average, which should make it a relatively affordable place to purchase a home. Tennessee homeowners save on property taxes too, paying about half the national average.

Here are some popular places to shop for a home in Tennessee:

•  Nashville: Nashville is the capital and largest city of Tennessee. It offers a diverse economy, a strong job market, and a variety of housing options. The average home value in Nashville is around $433,000.

•  Memphis: Memphis is the second-largest city in Tennessee and is known for its music, culture, and history. The average home value in Memphis is around $149,000.

•  Knoxville: Knoxville is the third-largest city in Tennessee and is home to the University of Tennessee. The average home value in Knoxville is around $353,000.

•  Chattanooga: Chattanooga is a city in southeastern Tennessee and is known for its outdoor activities, scenery, and history. The average home value in Chattanooga is around $304,000.

Least Expensive Locations

If you’re researching the best affordable places in the U.S., make sure to look up the cost of living by city. The following towns in Tennessee have some of the lowest average home values and cost of living scores (COLI):

•  Dyersburg: $160,000; COLI 71.1

•  Martin: $206,000; COLI 70.9

•  Union City: $151,000; COLI 71.2

Most Expensive Locations

Generally an affordable state, Tennessee still has its pricier enclaves, where home values and the average monthly expenses for one person or a family are higher. The following cities in Tennessee have some of the highest average home values and COLI scores:

•  Franklin: $800,000; COLI 139.4

•  Brentwood: $1,277,000; COLI 139.4

•  Nashville: $433,000; COLI 104.7

Tips for Securing a Competitive Mortgage Rate in Tennessee

Whether you’re buying your first home or downsizing for retirement, a competitive mortgage rate is a common goal. Even half a percentage point can translate to many thousands of dollars. That’s why taking your time to go through the mortgage preapproval process is generally worth it.

Here are some tips for securing a competitive mortgage rate in Tennessee:

Compare Interest Rates and Fees

Take the time to compare interest rates from multiple lenders. Be sure to ask about any upfront costs and closing fees associated with the loan.

Get Preapproved

Getting preapproved for a mortgage strengthens your position as a buyer and allows you to move quickly when you find the right property. If you’re worried about interest rates rising, you can pay a fee to the lender to lock in your rate for up to 90 days.

Tennessee Mortgage Resources

Tennessee offers various resources and programs to assist homebuyers, particularly first-time buyers, military, and those with limited financial resources.

First-Time Homebuyer Programs

As in many states, to qualify as a first-time homebuuyer in Tennessee, you must not have owned a primary residence in the past three years. The Tennessee Housing Development Agency offers a variety of programs to help first-time homebuyers, including low-interest loans and help with closing costs.

Down Payment Assistance

Several programs in Tennessee provide down payment assistance to eligible homebuyers. These programs can help borrowers overcome the challenge of saving for a down payment and make homeownership more affordable.

Tennessee Housing has two options. One is a no-payment, forgivable, 0% interest second mortgage for $6,000 to be used for the down payment or closing costs. The other option provides 6% of the sales price to be used for the down payment or closing costs, via a second mortgage that is repaid over 30 years.

Tools & Calculators

The SoFi website offers a variety of tools and calculators to help homebuyers estimate their monthly mortgage payments, determine their budget, and compare different loan options.

Refinancing Options in Tennessee

Refinancing your mortgage can be a smart way to lower your interest rate, reduce your monthly payments, or cash out some of your home equity. Here are a two refinancing options available in Tennessee:

FHA Streamline Refinance

The FHA Streamline Refinance allows FHA-insured homeowners to refinance into current mortgage rates with minimal hassle. This program is available to borrowers who have an existing FHA loan and are current on their payments.

Interest-Rate Reduction Refinance Loan

An Interest-Rate Reduction Refinance Loan (IRRRL) can reduce the monthly payments on VA loans by adjusting the APR. This program is available to veterans, active-duty military members, and some Reserve and National Guard members who have an existing VA loan.

Closing Costs, Taxes, and Fees in Tennessee

Buyers in Tennessee can expect to pay between 2% and 5% of the home’s purchase price in closing costs. These costs include the loan origination fee, appraisal fee, title insurance, and other administrative fees. Factors influencing closing costs in Tennessee include the property value, location, and type of loan. A higher-priced home will typically have higher closing costs than a lower-priced home. Additionally, closing costs may be higher in pricier areas of the state due to variations in local taxes and fees.

The Takeaway

From Memphis in the west to Knoxville in the east, Tennessee offers a range of homes and mortgage options for homebuyers. By staying informed about current mortgage rates, exploring assistance programs, and carefully considering refinancing options, individuals can make strategic decisions that align with their financial goals and achieve successful homeownership in the Volunteer State.

FAQ

Will mortgage rates drop in Tennessee?

It is difficult to predict future mortgage rate trends with certainty. However, several economic factors, such as inflation, unemployment, and Federal Reserve policy, can influence mortgage rates. Homebuyers should stay informed about current market conditions and consult with a mortgage lender to get the most up-to-date information on mortgage rates in Tennessee.

Will mortgage rates ever go back to normal?

The definition of “normal” mortgage rates is a moving target. Mortgage rates fluctuate over time, influenced by various economic factors. While rates may not return to a specific historical level, they may stabilize or trend within a certain acceptable range, as they are now. Homebuyers should focus on making informed decisions based on current market conditions and their financial situation.

Will Tennessee home prices ever drop?

It’s hard to make a blanket statement about home prices that applies statewide, since there’s so much variation from town to town. Your best bet is to consult with real estate professionals in the area you hope to buy in.

Is it a good time to buy a house in Tennessee?

Determining the right time to buy a house involves considering various factors such as personal financial readiness, market conditions, and long-term goals. There is no one-size-fits-all answer, and the decision to buy a house is highly individualized. Homebuyers should assess their financial situation, evaluate current market conditions, and consult with real estate professionals to make informed decisions about purchasing a home in Tennessee.

How to lock in a mortgage rate?

Locking in a mortgage rate involves securing a specific interest rate for a certain period of time. This can provide peace of mind and protect against potential rate increases. To lock in a mortgage rate, homebuyers typically pay a fee to the lender. The length of the rate lock period can vary.

How do mortgage interest rates work?

Mortgage interest rates represent the cost of borrowing money from a lender to purchase a home. These rates are influenced by various economic factors, including the Federal Reserve’s monetary policy, inflation, and market demand. Mortgage interest rates are expressed as a percentage and are applied to the principal loan amount. Homebuyers pay interest on the outstanding loan balance over the life of the mortgage, which determines the total cost of borrowing.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.

¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SOHL-Q324-097

Compare mortgage rates in Pennsylvania.

Introduction to Mortgage Interest Rates

Mortgage rates play an unsung role in determining the affordability of homeownership. Even small fluctuations in interest rates can significantly impact a borrower’s monthly payments and overall financial burden.

Mortgage interest rates are determined by a complex interplay of factors. These can be broadly categorized into two groups: the state of the economy and the borrower’s financial status.

Understanding these factors and their impact on mortgage rates can help borrowers make informed decisions and secure the best possible rate for their home loan.

Where Mortgage Rates Come From

The Federal Reserve, commonly known as the Fed, plays a central role in setting short-term interest rates, which serve as a benchmark for other interest rates, including mortgage rates. When the Fed’s interest rate is high, chances are mortgage rates will be too — and vice versa.

Experts recommend that borrowers stay informed about the Fed’s monetary policy decisions, as they can have a significant impact on mortgage rates.

How Interest Rates Affect Home Affordability

Mortgage rates have a more substantial impact on home affordability than many people realize. Even minor changes in interest rates can significantly affect monthly mortgage payments and the overall cost of borrowing.

For instance, a mere 1.00% interest rate increase on a $300,000 loan can result in an additional $2,300 in annual interest payments. Over the life of a 30-year mortgage, this translates to a staggering $69,000 in additional interest paid.

As a result, mortgage rates can make a significant difference in whether homeownership is financially feasible for middle-income families.

Should Homebuyers Wait for Interest Rates to Drop?

Many first-time homebuyers grapple with the dilemma of whether to purchase a home immediately or wait for interest rates to decrease. While it is tempting to try to “time the market,” it is essential to consider several factors before making a decision.

First, mortgage rates are notoriously difficult to predict. While rates may indeed decline in the future, there is no guarantee of when or by how much.

Second, even if rates do drop, the overall cost of waiting may outweigh the savings. Home prices tend to appreciate over time, offsetting any potential savings from lower interest rates. Additionally, waiting may mean missing out on the opportunity to build equity and enjoy homeownership.

Pennsylvania Mortgage Rate Trends

Understanding historical mortgage rate trends can provide valuable insight into where rates are headed. While Pennsylvania rates have risen in recent years, along with the national rates, they remain below historical highs. Indeed, they’re currently around the 50-year average.

For instance, in the two decades covered by the table below, rates ranged from a high of 7.97% in 2000 to a low of 3.65% in 2012, making the average for that period 5.30%.

This perspective offers some reassurance to prospective homebuyers (especially if you’re buying your first home), indicating that current rates are not exceptionally high in the grand scheme of mortgage history.

However, it’s always wise to monitor market conditions and stay informed about economic developments that could influence future rate trends.

Historical U.S. Mortgage Rates

For additional context, it is worth noting that mortgage rates in the United States have experienced even greater fluctuations over the past 50 years. In the early 1980s, rates reached historic highs, exceeding 18.00%. Subsequently, rates declined steadily until the early 2000s, when they hovered around 6.00%. The financial crisis of 2008 triggered another spike in rates, followed by a gradual decline until the present day.

Factors Affecting Mortgage Rates in Pennsylvania

Numerous factors influence mortgage rates in Pennsylvania and nationwide. Some of these are what’s called macroeconomic, while others are microeconomic — and entirely within the homebuyer’s control.

Macroeconomic, or Big Picture, factors include the federal funds rate, inflation, and the unemployment rate. Microeconomic, or individual, factors can encompass your credit score, down payment amount, income and assets, and mortgage type.

Getting familiar with these influences can empower homebuyers to make informed decisions and position themselves for the best possible mortgage rate.

Macro Factors

•  The Fed: The Federal Reserve sets the federal funds rate, a benchmark for banks. As the federal funds rate rises, mortgage rates tend to follow suit.

•  Inflation: Inflation, or the general increase in prices, affects the cost of borrowing for lenders. When inflation is high, lenders may increase interest rates to maintain their profit margins.

•  Unemployment: A low unemployment rate, indicative of a robust economy, can lead to higher mortgage rates due to increased demand for housing and upward pressure on home prices.

Micro Factors

•  Credit score: A higher credit score reflects a borrower’s responsible financial behavior and lower risk profile. Lenders reward such borrowers with lower interest rates.

•  Down payment: A larger down payment reduces the loan amount, making the borrower less risky in the eyes of lenders. As a result, lenders may offer lower interest rates to borrowers who make larger down payments.

•  Income and assets: A stable income and substantial assets demonstrate a borrower’s ability to repay the loan, making them more attractive to lenders and potentially securing a lower interest rate.

•  Type of mortgage loan: The type of mortgage loan chosen can also impact the interest rate. Adjustable-rate mortgages (ARMs) often have lower initial rates compared to fixed-rate mortgages. Government-backed loans, such as VA mortgages, may also offer more-favorable rates. Additionally, 15-year loan terms typically come with lower interest rates than 30-year terms.

Types of Mortgages Available in Pennsylvania

Pennsylvania offers a variety of mortgage types to meet the needs of different homebuyers, including:

Fixed-Rate Mortgage

A fixed-rate mortgage provides peace of mind with a consistent interest rate for the entire loan term. Borrowers can lock in a favorable rate and enjoy predictable monthly payments, making budgeting and financial planning easier.

Fixed-rate mortgages are typically available in terms ranging from 10 to 30 years, allowing borrowers to choose a loan duration that aligns with their financial goals and repayment capacity.

Adjustable-Rate Mortgage (ARM)

Adjustable-rate mortgages offer lower rates initially but come with future rate adjustments, which can go up or down depending on the market.

ARMs entice borrowers with lower introductory rates, making them an attractive option for those seeking immediate savings. However, borrowers should carefully consider the potential for future rate increases and ensure they are prepared to handle higher monthly payments if rates adjust upward.

FHA Loan

FHA loans are backed by the federal government, making them more accessible to borrowers who may not qualify for conventional loans due to lower credit scores or higher debt-to-income ratios. The FHA insures these loans, reducing the risk for lenders and allowing them to offer more favorable terms to borrowers.

FHA loans do require an upfront mortgage insurance premium (MIP), which is a percentage of the loan amount. Monthly MIP for new homebuyers is 0.15% to .75% — most often 0.55%.

VA Loans

VA loans offer exceptional benefits, including no down payment requirement, to eligible veterans, active-duty military members, certain Reserve and National Guard members, and eligible spouses.

There’s no ongoing mortgage insurance as with a conventional mortgage; however, there may be a one-time funding fee. A first-time VA loan borrower with a 0% down payment would pay a 2.15% funding fee.

USDA Loans

Backed by the U.S. Department of Agriculture, USDA loans cater to low-income borrowers seeking to purchase homes in rural areas. They offer such benefits as no down payment, competitive interest rates, and flexible credit requirements.

Jumbo Loan

Jumbo loans cater to borrowers seeking financing for high-value properties that exceed conventional loan limits. The loan limit throughout most of Pennsylvania is $832,750. The one exception is Pike County, where the limit is $1,209,750. For loans above those limits, you’ll need a jumbo mortgage.

Popular Places to Get a Mortgage in Pennsylvania

Securing a mortgage often depends on choosing the right location, where home prices, the overall cost of living, and mortgage terms are affordable.

When selecting a location, it’s smart to research the cost of living, as it can significantly impact overall financial well-being. The Cost of Living Index (COLI) provides a valuable tool for comparing different states, or different cities within a state. Index values above 100 indicate that the area is more expensive than the average cost of living in the U.S.. Values below 100 mean that the area is more affordable than average.

Below are some popular locations in Pennsylvania for obtaining a mortgage, along with their Cost of Living Index number:

•  Philadelphia: COLI 104.3

•  Pittsburgh: COLI 91.8

•  Allentown: COLI 97.9

•  Erie: COLI 80.8

•  Reading: COLI 94.0

Least Expensive Locations

The following areas in Pennsylvania offer relatively lower cost of living, according to SoFi’s Best Affordable Places to Live in the U.S. guides:

•  Johnstown: COLI 75.7

•  Altoona: COLI 77.2

•  State College: COLI 95.4

•  Williamsport: COLI 85.0

•  Scranton: COLI 83.6

Most Expensive Locations

The following areas in Pennsylvania have higher cost of living but greater local amenities and cultural attractions:

•  Philadelphia: COLI 104.3

•  Pittsburgh: COLI 91.8

•  Allentown: COLI 97.9

•  Harrisburg: COLI 89.8

•  Lancaster: COLI 99.5

Recommended: Average Monthly Expenses for One Person

Tips for Securing a Competitive Mortgage Rate in Pennsylvania

As we’ve shown above, obtaining a competitive mortgage rate can save borrowers tens of thousands of dollars over the life of their loan. Even a small difference in interest rate can result in substantial savings or added costs over time.

Therefore, it’s important to do whatever you can to secure the best available mortgage rate. Here are some tips:

Compare Interest Rates and Fees

Take the time to compare rates and fees from multiple lenders. Don’t settle for the first offer you receive. By comparing rates, you can potentially save thousands of dollars over the life of your loan.

In addition to interest rates, be sure to inquire about any upfront costs or closing fees associated with the loan. These fees can vary between lenders and can add to the overall cost of borrowing.

Get Preapproved

Getting preapproved for a mortgage strengthens your position as a buyer and allows you to move quickly when you find the right property. Preapproval involves submitting financial documents and undergoing a credit check to assess your eligibility for a mortgage.

If you are concerned about interest rates, you can lock in your rate for a certain period, typically ranging from 30 to 90 days, by paying a fee to the lender. This can provide peace of mind and protect you from potential rate increases.

From soup to nuts, the mortgage preapproval process takes up to 10 days.

Pennsylvania Mortgage Resources

The Pennsylvania Housing finance Agency (PHFA) offers various resources and programs to assist homebuyers, particularly first-time buyers and those with limited financial resources. These resources include down payment assistance programs, mortgage assistance.

•  HomeFirst Down Payment Assistance Program provides a 30-year fixed-rate conventional loan with a reduced mortgage insurance requirement. Qualifications include income limits, an “acceptable” credit history, and completion of homebuyer education. Find participating lenders here.

•  Keystone Home Loansoffers mortgages to first-time and repeat buyers purchasing in a targeted county. Qualifications include income and purchase price limits and an “acceptable” credit history. Find info on Keystone here.

•  HOMEstead Down Payment and Closing Cost Loan offers up to $10,000 in down payment and closing cost assistance through a no-interest second mortgage, forgiven after five years. Income and purchase price limits apply. More info on HOMEstead.

Tools & Calculators

Numerous tools and calculators are available to help homebuyers estimate their monthly mortgage payments and determine how much they can afford to borrow:

Refinancing Options in Pennsylvania

A mortgage refinance is when you pay off your current home loan with a new mortgage, typically with more favorable terms. Refinancing can be a strategic move to reduce monthly payments, consolidate debt, or access cash for other financial needs.

Homeowners in Pennsylvania have several options for refinancing their existing mortgages:

•  FHA Streamline Refinance: This program allows FHA-insured homeowners to refinance into current mortgage rates with minimal hassle

•  VA Interest Rate Reduction Refinance Loans: This program allows VA loan holders to reduce their monthly payments by adjusting the APR.

•  Conventional refinance loans:Conventional refinance loans are available to homeowners who do not have FHA or VA loans.

Closing Costs, Taxes, and Fees in Pennsylvania

Buyers in Pennsylvania can expect to pay between 2% and 5% of the home’s purchase price in closing costs. Closing costs in Pennsylvania typically include:

•   Loan origination fee

•   Appraisal fee

•   Credit report fee

•   Title insurance

•   Recording fee

•   Transfer tax

•   Mortgage tax

The amount of closing costs can vary depending on the value of the property and the location. It’s a smart move to budget for these costs when purchasing a home.

The Takeaway

Pennsylvania’s mortgage landscape offers a range of options for homebuyers. By staying informed about current mortgage rates, exploring assistance programs, and carefully considering refinancing options, individuals can make strategic decisions that align with their financial goals and achieve successful homeownership in the Keystone State.

FAQ

Will mortgage rates drop in Pennsylvania?

Predicting future mortgage rate trends is challenging, as they are influenced by various economic factors. However, borrowers can stay informed about market conditions and consider locking in a favorable rate for peace of mind.

Will mortgage rates ever go back to normal?

The definition of “normal” mortgage rates varies over time. While rates may fluctuate, they’re currently around the 50-year average.

Will Pennsylvania home prices ever drop?

Real estate market dynamics, including home price trends, are influenced by numerous factors such as supply and demand, economic conditions, and local market characteristics. Predicting future price movements can be challenging and uncertain.

Is it a good time to buy a house in Pennsylvania?

Determining the right time to purchase a home involves considering personal financial readiness, market conditions, and long-term goals. There is no one-size-fits-all answer, and individuals should consult with financial experts and carefully evaluate their circumstances before making a decision.

How to lock in a mortgage rate?

Borrowers can lock in a mortgage rate by paying a fee to the lender. This locks the interest rate for a specified period, typically ranging from 30 to 90 days, protecting against potential rate increases during that time.

How do mortgage interest rates work?

Mortgage interest rates are determined by a combination of economic factors, including the federal funds rate, inflation, unemployment rate, and consumer factors such as credit score, down payment amount, income, assets, and chosen mortgage type.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.

¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SOHL-Q324-093