From hiking paths to skiing rails to streams teeming with trout, outdoor adventurers have plenty of things to love about Pennsylvania. And those make up just a small part of the list; it also boasts of also miles of dense forests and charming little towns. Pittsburgh, Bethlehem, and West Chester are just three of its top-ranking cities. All these wonders, plus the state’s booming steel production, banking, and agricultural industries coupled with cost of living lower than the national average, all keep its residents happy while also attracting potential home buyers. (Source: Livability.com)

Inexpensive housing prices

Home buyers in The Keystone State will find majority of the houses for sale here more affordable compared in many other places in the country, with median home value amounting to $158,500, as opposed to the countrywide median of $195,300. (Source: Zillow)

The lower housing costs has paved the way for the state to have an impressive home ownership rating of 69.6%. (Source: U. S. Bureau of Census)

Shoppers should keep in mind that the specific type of residential property they will purchase still influences price. There are four major housing classifications, and these include the following, together with their average values:

  • Single-family Homes: $123,937.40
  • Condominiums: $146,412.23
  • PUD Homes: $141,788.23
  • Townhomes: $87,873.39

Loans for financing the purchase of a house

A huge percentage of the United States home buyer population relies on mortgages. These loans, designed to finance real estate purchases, come in two primary types: the fixed-rate and the adjustable-rate mortgages. Jumbo loans are also common, although not as sought-after as the first two previously mentioned types.

When consumers take out a mortgage, they are borrowing money – the amount of which equates to the house’s selling price. Known as capital, it may or may not include required down payment yet. And in order for lenders to make profit, they will apply an interest rate on their borrowers’ monthly mortgage payments. They may also require the applicants to first make a down payment on the property, which is usually 20% of its selling price.

Factors borrowers should first consider

All home buyers who will apply for a housing loan should consider these factors first:

  • Their current and future housing needs, particularly the length of time they plan to occupy the same dwelling
  • Guaranteed income or source of funds for repaying the loan
  • How much down payment they can afford, and if they can wait till they saved up at least 20% of the house’s selling price
  • The status of their credit score rating

By taking the time to establish all these, borrowers can make a better, more educated choice between the two primary mortgage types.

The key differences between fixed-rate and adjustable mortgages

Fixed-rate and adjustable-rate mortgages (ARMs) both have their own sets of pros and cons. This is why home buyers should assess these two carefully.

  • Some people will benefit more from a housing loan that comes with an unchanging interest rate, which is the main feature of a fixed-rate mortgage. A lot of the state’s residents opt for this housing loan because they want to have the assurance that their monthly payments will stay the same throughout the life of the mortgage. Also, in most cases, those who obtain such loans intend to live in the same house long-term.
  • Others prefer ARMs because of their lower introductory rates, which remains constant for the first few years (one to five years, depending on the lender’s terms). As soon as this period is over though, the rate can already move up or down. In other words, the considerably lower initial rate comes with the risk of it going up significantly.

Mortgage resources and help

Although Pennsylvania real estate is less expensive compared with other states, some consumers may still find it difficult to qualify for a mortgage. In such cases, they can seek the help of the Pennsylvania Housing Finance Agency, which offers down payment and closing cost assistance, low-rate housing loans, as well as funding for renovations.

References:

Pennsylvania Housing Finance Agency

USDA Rural Development

Home Affordable Refinance Program