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Third Federal Savings and Loan is a unique mortgage lender that offers an impressive number of perks compared to other lenders we've reviewed.
Though its loan options are somewhat limited, there are many ways for borrowers to get an affordable mortgage — including its low-closing-cost mortgages, down payment assistance, and PMI-free mortgages with 15% down. This makes it one of the best mortgage lenders for first-time buyers.
Third Federal Savings and Loan Mortgage
Insider’s Rating
4.27/5
Perks
Offers a Low Cost Mortgage option where you pay only $295 in closing costs (in exchange for a higher rate)
Recommended Credit
N/A
Minimum Down Payment
3%
Types of Loans Offered
Conforming, Smart Rate Adjustable Mortgage, jumbo, bridge loan, HELOC, home equity loan
Pros
- Low Cost Mortgages come with only $295 in closing costs
- Down payment assistance available
- Services all of its loans
- Low average rates
Cons
- Only available in 22 states and Washington, DC
- Only has physical branches in Ohio and Florida
- No government-backed mortgages
Insider’s Take
Third Federal Savings and Loan is a really unique mortgage lender that offers an impressive number of perks compared to other lenders we've reviewed.
Product Details
- Available in California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Missouri, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Virginia, Washington, and Washington, DC
- Third Federal Savings and Loan doesn’t set a minimum credit score for its mortgages. In general, borrowers should aim to have a score of at least 620 to be considered for a conventional mortgage.
- Minimum down payment displayed is for conforming mortgages
Understanding Third Federal Mortgages
Third Federal Lending Area
Third Federal Savings and Loan offers mortgages in California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Missouri, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Virginia, Washington, and Washington, DC. It has physical branches in Ohio and Florida.
Third Federal's Loan Options
Third Federal Savings and Loan offers the following types of mortgages:
- Conforming loans
- Jumbo loans
- Bridge loans
- Home equity loans
- HELOCs
- Smart Rate Adjustable Mortgage: A unique adjustable-rate mortgage product that comes with the ability to re-lock your rate to the lender's current rate for up to five years if you want to keep your rate fixed rather than have it adjust each year. To re-lock your rate, you'll pay a $295 fee ($595 in New York). You can use this feature as many times as you want, whenever you want.
If you live in an eligible county in Ohio or Florida, you could also get a Fixer Upper Home Repair Loan from this lender, which offers a low fixed interest rate with loan amounts between $1,000 and $9,900 that can be used to make repairs or upgrades to your current home. Owners of older homes in Cuyahoga County, Ohio may qualify for the lender's Heritage Home Program Loan to fund certain home improvement projects.
Third Federal Savings and Loan doesn't disclose minimum credit scores for its mortgages. In general, we recommend borrowers aim to have a credit score of at least 620 before applying for a conforming mortgage.
To get started with this lender, submit an application or get preapproved online. You can also search for mortgage loan offices near you on its website if you want to start the process in person.
Low Closing Cost Mortgage Option
Third Federal also offers a Low Cost Mortgage option on some of its mortgages. With this option, you'll pay just $295 at closing in exchange for a higher mortgage rate. The Low Cost Mortgage option is available on 10, 15, and 30-year fixed-rate mortgages, Smart Rate mortgages, and jumbo mortgages.
Third Federal Homebuyer Assistance Programs
Third Federal offers up to $13,000 in down payment assistance on HomeReady mortgages, which are available in certain counties in Ohio, Florida, Kentucky, and Indiana. The lender also has other programs that offer up to $20,500 in assistance.
First-time homebuyers may be able to get a $750 closing cost credit from the lender.
Third Federal Mortgage Interest Rates and Fees
Based on our review of Home Mortgage Disclosure Act data, Third Federal's mortgage rates are significantly lower than average.
Third Federal's website makes it easy to explore current mortgage rates. Click "More Rates + Details" on its mortgage page to see customized rates based on your loan amount and where the home is located.
The customized rates page will show you the costs of a variety of rate scenarios, so you can see how your rate and monthly payment would change with different levels of discount points added to the loan.
This page also shows the estimated closing costs you might pay with each scenario. When you view the details on a specific situation, you can see how those costs break down.
In 2022, borrowers paid an average of $1,127 when getting a conventional mortgage with Third Federal, according to HMDA data. However, because many borrowers utilized Third Federal's Low Cost Mortgage option, this likely isn't an accurate picture of how much you'd pay if you got a regular mortgage with this lender.
Third Federal Mortgage Overall Rating
Loan Types: 3.5 out of 5
Third Federal offers a decent range of mortgage options, including conventional mortgages, bridge loans, home equity options, and its unique Smart Rate Adjustable Mortgage product. But it doesn't have any government-backed mortgages, which are some of the most popular types of home loans.
Affordability: 4 out of 5
This lender has down payment and closing cost assistance for first-time homebuyers plus its very affordable Low Closing Cost mortgage. Its average rates are also relatively low.
Customer Satisfaction: 4.59 out of 5
On its Zillow lender page, Third Federal Savings and Loan has a 4.59 out of 5-star rating, based on more than 100 online customer reviews.
Trustworthiness: 5 out of 5
Third Federal Savings and Loan has an A+ rating from the Better Business Bureau. A strong BBB grade indicates a company advertises honestly, responds effectively to customer complaints, and is transparent about business practices.
Third Federal Mortgage Pros and Cons
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Lots of Affordable Mortgage Features
If you're looking to save money on your mortgage, you might like this lender. Third Federal has a $295 closing cost option on its fixed rate, Smart Rate adjustable, and jumbo mortgages. It also offers down payment assistance to eligible borrowers. Plus, its rates are on the low end compared to other lenders.
Third Federal Services All of Its Mortgages
Third Federal Savings and Loan says it services 100% of the mortgages it originates. It's common for mortgage lenders to sell the servicing of a loan after it closes, meaning the borrower will make their monthly mortgage payments to a different company. This can feel disruptive for homeowners, since they may have to go through the process of creating a new online account with their servicer each time their loan changes hands. It can also cause issues if the company your servicing is sold to doesn't offer the same level of customer service as your previous servicer.
With Third Federal, you won't have to worry about this. You'll continue to make your payments to this lender until you sell, refinance, or reach the end of your term.
Not Available in All States
Third Federal only lends mortgages in California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Missouri, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Virginia, Washington, and Washington, DC.
Not all of its products are available in every state or county it lends in. It also only has physical branches in Ohio and Florida.
No Government-Backed Mortgages
Third Federal doesn't have any government-backed mortgage options. These mortgages are often more affordable for borrowers compared to conventional loans.
FHA loans, a popular government-backed option, are a good choice for borrowers with lower credit scores, since these mortgages allow scores down to 580 (or 500 with a 10% down payment). VA loans and USDA are also an affordable choice for eligible borrowers since they allow 0% down payments. Government-backed mortgages typically offer lower rates as well.
What Borrowers Are Saying About Third Federal Mortgages
Business Insider looked at positive and negative customer reviews, online forums, BBB complaints, and other sources to understand what borrowers think about Third Federal's mortgage process.
Low Rates, Simple Process
In reviews and comments online, many Third Federal borrowers said they were able to snag a lower-than-expected rate with this lender. They also said that the mortgage process was smooth and easy, and the loan officers they worked with were friendly and communicative.
How Third Federal Mortgages Compare
Third Federal Mortgage vs. Carrington Mortgage Services
Carrington Mortgage Services is one of the best lenders for borrowers with low credit scores. It accepts scores as low as 500 on its FHA and VA mortgages, and its Carrington Flexible Advantage mortgage has flexible credit requirements for borrowers who have experienced recent negative credit events, such as bankruptcy.
Third Federal and Carrington are both extremely affordable lenders, but for different types of borrowers. If you have a stronger credit score but are having trouble saving up the cash needed for a home purchase, you'll probably like Third Federal better. But if you have a low score and need a lender that offers a lot of flexibility, Carrington is likely the better fit.
Carrington Mortgage Services Review
Third Federal Mortgage vs. Guild Mortgage
If you're looking for a lender that offers a huge range of mortgage programs to choose from, Guild Mortgage might be a good choice for you.
Guild's Complete Rate Program lets you use non-traditional credit, such as rent payment history, to qualify for a mortgage if you don't have a traditional credit score. But if you're looking for more cash assistance at closing or low rates, you might prefer Third Federal.
Guild Mortgage Review
Third Federal Mortgage FAQs
Is Third Federal Savings and Loan legit?
Yes, Third Federal Savings and Loan is a legitimate bank to get a mortgage. It has strong customer reviews and a high rating from the BBB. It's also been in business since 1938.
Is Third Federal a good mortgage lender?
Yes, Third Federal is a good mortgage lender overall, especially for first-time homebuyers. If you're looking to keep your costs low, you might like Third Federal's Low Cost Mortgage, where you'll pay only $295 in closing costs in exchange for a higher rate.
Are Third Federal's mortgage rates competitive?
Yes, Third Federal's mortgage rates are competitive. They are significantly lower than average, according to our review of the latest HMDA data.
How is the customer service with Third Federal?
Third Federal ranks high in customer service and has many positive online customer reviews.
Does Third Federal offer any special programs?
Third Federal offers a few special mortgage programs to help borrowers save money, including a specialty adjustable-rate mortgage, an option that lets you pay just $295 in closing costs, and down payment assistance.
What are some alternatives to Third Federal?
If you're considering Third Federal but also want to explore some alternatives, you might want to look at local mortgage lenders or credit unions. Local lenders can often provide more personalized help and provide a smoother experience compared to a larger bank.
Why You Should Trust Us: How We Reviewed Third Federal Savings and Loan Mortgages
To review Third Federal Savings and Loan, we used our methodology for reviewing mortgage lenders.
We look at four factors — loan types, affordability, customer satisfaction, and trustworthiness — and give each a rating between 1 and 5, then average these individual ratings for the overall lender rating. Lenders get higher ratings if they offer a high number of loan types with affordable features, have positive customer reviews, and don't have any recent public controversies.
Mortgage Reporter
Molly Grace is a mortgage reporter for Business Insider with over six years of experience writing about mortgages and homeownership.ExperienceIn addition to her daily mortgage rate coverage, Molly also writes mortgage lender reviews and educational articles on homebuying and analyzes data and economic trends to give readers actionable and up-to-date information about the housing market.She also tracks affordable mortgage and down payment assistance programs offered throughout the country to keep her readers informed of homebuyer programs available to them.Before Business Insider, Molly was a blog writer for Rocket Companies and helped to create Rocket Mortgage’s Shorty Award-winning podcast Home. Made.Molly is passionate about covering personal finance topics with empathy. Her goal is to make homebuying knowledge more accessible, especially for groups that may think homeownership is out of reach.ExpertiseMolly is an expert in the following topics:
- Mortgages and mortgage lenders
- Home equity
- The housing market
- The economy and the forces that impact mortgage rates
- Budgeting and saving
- Credit
- Insurance
- Retirement savings
EducationMolly earned a bachelor's degree in journalism from Indiana University.She is based in Michigan and has a dog and two cats.
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