Third Federal Savings & Loan mortgage review
This bank provides assistance to reduce loan costs, but is vague on documentation and fee requirements.
Third Federal Savings & Loan started as a small community bank and seeks to continue its legacy of offering mortgages with low interest rates and low out-of-pocket costs. But unless you’re interested in a strictly conventional loan, you’ll need to look elsewhere.
|Loan products offered||Conventional, Refinance, Jumbo|
|Minimum credit score||Not provided without an application, but most lenders require a minimum 620 credit score|
|Minimum down payment||3%|
|State availability||CA, CO, CT, FL, GA, ID, IL, IN, KY, MD, ME, MI, MN, MT, NC, NH, NJ, NY, OH, OR, PA, TN, VA, WA, WI|
Third Federal Savings & Loan requirements
This lender doesn’t disclose its credit score or other requirements on its website, demanding you apply to find out if you qualify. But Third Federal doesn’t use loan-to-value (LTV) to determine your interest rate. And you can apply for a preapproval on the website to see how much the bank determines you can afford. Your preapproval is good for six months while you search for your new house, and you can lock in your current rates for free for 60 days.
No documentation requirements are listed on the website, but you’ll need to provide proof of your income and assets, as well as information about any outstanding debt.
Costs and fees
Third Federal doesn’t provide specifics about its mortgage costs, but you can expect to pay:
- Bank costs such as application and origination fees
- Third-party fees such as appraisal and title fees
- Other closing costs that can include broker’s and processing fees
This lender does give you two ways to save on mortgage fees. First, certain adjustable-rate loans qualify for a low closing cost program that allows the borrower to only pay between $295 and $595 in closing costs. The bank pays the rest.
The bank also offers a 60-day rate lock for free, or you can pay 1% of the loan amount to set the rate for 240 days. This comes with the option to extend the rate lock for an additional 60 days for another half of a percent of the loan in a commitment deposit.
How to apply for a mortgage with Third Federal Savings & Loan
Apply for a preapproval using the bank’s online application system. But if you decide to apply for a loan, you’ll be contacted to pay the application fee within a few days after you submit your application.
- On the home page, click Apply Now and select Start a New Application. Click Next.
- Enter information about the kind of loan you’re looking for and enter your email address so you can access your application after you’ve applied or finish it later.
- Enter your personal information including home address, contact information and identification.
- Enter information about the home you want to purchase and select the loan for which you want to apply.
- Enter your asset, expenses and income information.
- Review and submit your application. A loan officer should contact you within 72 hours.
What types of mortgages can I get through Third Federal Savings & Loan?
Other mortgage products offered by Third Federal Savings & Loan
In addition to the standard mortgage offerings, Third Federal offers home loans designed for borrowers with specific lending needs.
- Bridge loans. If you plan to use the equity in your current home to buy a new home, you can get a short-term bridge loan to cover the down payment until you sell your current home.
- Home equity. You can either use your home equity as collateral for a home equity loan or get access to your equity through a home equity line of credit (HELOC) with no minimum draw requirement.
- Community development loans. Low-income loans with 3% down available for homes in certain areas.
- Construction to permanent loans. An interest-only construction loan that converts to a permanent loan once the construction is complete.
- Refinance. Third Federal offers fixed- and adjustable-rate refinance loans with low-cost and jumbo loan options.
How Third Federal‘s mortgage products compare to other lenders
Third Federal offers a standard list of adjustable- and fixed-rate conventional loans, jumbo loans and refinance options. And while the bank offers no federally backed options, such as a VA, FHA or USDA loans, it has several special programs to help reduce your loan costs, including:
- A low-rate guarantee that pays you $1,000 if you can get a lower rate from a licensed lender.
- Low down payment options, such as the HomeReady loan program that allows your down payment to be only 3% if you meet income requirements and you’re purchasing a home in an area covered by the program.
- A Home-at-Last program that offers up to $3,000 in down payment assistance.
- A low closing costs option for adjustable-rate mortgages that comes with a slightly higher interest rate.
- A discount on closing costs for veterans, active military members and their spouses.
How Third Federal is responding to COVID-19
Third Federal has extended CARES Act forbearance protections to all of its mortgage loans. The CARES act requires banks to offer forbearance to anyone affected by the coronavirus pandemic who has a federally backed mortgage, such as an FHA or VA loan, or government-sponsored loan, such as Freddie Mac or Fannie Mae. Third Federal offers that same protection to all of its mortgage loans. Contact your lender if you need to take advantage of this forbearance option while it’s available.
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Third Federal Savings & Loan customer reviews and complaints
As of October 2020, this lender isn’t accredited by the Better Business Bureau (BBB), but has closed 16 BBB complaints in the last three years — six of which were closed in the last 12 months. Third Federal has a C- rating for failing to respond to three complaints.
Because it’s a regional bank, there aren’t many customer reviews online and those that exist pertain to Third Federal’s banking products, not just mortgages. Yelp has the most reviews at 59, where the lender has a 2.5-star rating.
The customers who gave the bank a high rating liked programs like the low closing cost mortgage option and the bank’s overall lower fees. Those giving a low rating complained of slow approval times and inadequate customer service.
Pros and cons of Third Federal Savings & Loan
- Guaranteed low rates. Third Federal’s low-rate guarantee means if you find a lower rate anywhere, the bank will pay you $1,000.
- Assistance programs. The bank offers several programs to help lower closing costs, lower your down payment and provide assistance.
- Not available in all states. This lender only services 25 states, and not all of the products it offers are available in every state.
- Website lacks information. To find out Third Federal’s loan requirements, fees or even what documents you’ll need, you have to apply for the loan.
- No government-backed loans. Third Federal doesn’t offer federally backed mortgages, such as FHA, USDA or VA loans. But it does provide a discount on closing costs for military members.
What is Third Federal Savings & Loan?
Third Federal was started by Ben and Gerome Stefanski during the Great Depression. The original capital was raised among the Slavic Village members in Cleveland, Ohio, where the bank later opened its first office in 1938.
Third Federal Savings & Loan is still headquartered in the same neighborhood today, with an additional branch office in Florida. It has more than $12 billion in assets and opened a foundation in 2007 to support educational, housing and other community projects.
Heather Petty is a writer at Finder specializing in banking, investments and insurance. She's a self-proclaimed word nerd who worked as a technical writer and editor for the casino systems industry and is an internationally published young adult mystery author. Heather earned a bachelor’s degree in English from the University of Nevada, Reno.
Third Federal Savings & Loan is a regional bank with only two bank branches, but a surprisingly wide footprint, offering mortgage loans in 25 states and Washington, DC. If you’re looking for a conventional loan, the bank’s low-rate guarantee and assistance programs can help you get a good deal with low costs. But borrowers looking for a federally backed loan with transparent fees will want to compare other lenders before making a decision.