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Third Federal Savings & Loan Mortgage Review 2021

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Third Federal Savings & Loan dates back to 1938, when it was founded in Cleveland, Ohio, as a mutual association owned by its depositors. Today, Third Federal is a public company with 37 branches and eight lending offices in Ohio and Florida, and more than $14 billion in assets.

As a savings and loan bank, Third Federal specializes in home loans as well as checking and savings accounts. It stands out among mortgage lenders for specialty loan programs and benefits, especially for first-time homebuyers.

Pros and cons of a Third Federal Savings & Loan mortgage


  • Offers a rate lock during preapproval. If you see a low interest rate but are still shopping for a home, Third Federal will allow you to lock in the rate before your loan application.
  • Offers its own first-time homebuyer program. Third Federal offers a $750 credit toward closing costs if it’s your first home.
  • Caters to borrowers with lower credit scores. If your credit score is on the lower end, Third Federal might be a good option. They don’t charge higher interest rates based on your credit score.


  • Not available in all states. Third Federal lends in 25 states and the District of Columbia. If you don’t live in one of them, you’re out of luck.
  • Doesn’t offer government-backed loans. Third Federal doesn’t advertise any loans backed by the Federal Housing Administration (FHA), U.S. Department of Veterans Affairs (VA) or the U.S. Department of Agriculture (USDA).
  • Doesn’t finance all property types. If you need a loan for a manufactured home, co-ops or multifamily homes (aside from duplexes), you’ll have to look elsewhere.

Working with Third Federal Savings & Loan

Third Federal Savings & Loan has eight lending offices in central and southern Ohio and originates mortgages in the following 25 states and the District of Columbia:

  • California
  • Colorado
  • Connecticut
  • Florida
  • Georgia
  • Illinois
  • Indiana
  • Iowa
  • Kentucky
  • Maryland
  • Massachusetts
  • Michigan
  • Minnesota
  • Missouri
  • New Hampshire
  • New Jersey
  • New York
  • North Carolina
  • Ohio
  • Oregon
  • Pennsylvania
  • Tennessee
  • Virginia
  • Washington
  • Wisconsin

The company also operates 21 full-service branches in northeast Ohio and 16 branches in Florida. Third Federal originated more than $1.8 billion in residential mortgages in 2019, according to data from the U.S. Securities and Exchange Commission.

Third Federal charges a nonrefundable application fee in some cases, depending on the type of mortgage loan you choose. There is no preapproval fee.

The company advertises several “Low-Cost” mortgage options with lower lender fees, including a $295 closing cost option.

Third Federal Savings & Loan borrowing requirements

Third Federal does not publicly list a minimum credit score needed to qualify for a mortgage. However, the company advertises that it offers the same interest rates to customers no matter their credit score — as long as they qualify for the mortgage.

The company issues loans on the following properties:

  • Single-family homes
  • New construction homes
  • Duplexes
  • Condos

Third Federal does not offer mortgages for manufactured homes, triplexes or quadruplexes. They also don’t quote rates online for co-ops or properties with five or more units; you’ll have to call them to see if it’s an option.

Third Federal Savings & Loan mortgage products

Third Federal offers a wide variety of purchase, refinance and home equity loan products, but some programs have restrictions based on your location. Third Federal’s website lists thorough disclosures and explanations for each product it offers.


  • Conventional loans. Eligible borrowers may qualify for a conventional fixed-rate mortgage of 10, 15 or 30 years.
  • Fannie Mae HomeReady® loans. Borrowers may be able to put down 3% on loans up to $150,000 through the HomeReady program, or make a 5% down payment on loans up to $424,100. HomeReady borrowers can also get up to $3,000 in down payment assistance if they complete a free homebuyer education course.
  • Adjustable-rate mortgages (ARMs). Choose from a 3/1 or 5/1 ARM for a term of 10, 15 or 30 years. After the introductory ARM period, the initial interest rate typically adjusts, but Third Federal offers borrowers the ability to lock in their rate for an additional five years.
  • Jumbo loans. Jumbo loans are available in fixed-rate mortgages in terms of 10, 15 or 30 years, or as 3/1 or 5/1 ARMs. Third Federal offers discounts on jumbo loan amounts between $510,400 and $1 million.
  • Bridge loans. Third Federal offers bridge loans in terms of one year with closing costs of $595. Third Federal bridge loans are available only in 13 states. This type of loan allows you to tap some of the equity in your current home with a short-term loan to make a down payment on a new home.

Third Federal doesn’t advertise government-backed loan programs for purchase mortgages.


  • Rate-and-term refinance loans. Borrowers may save money with a fixed-rate refinance loan of 30 years or a 5/1 ARM of 30 or 15 years. Customers can also save money in interest payments in the long term with fixed-rate loans of 10 or 15 years.
  • HomeReady refinance loans. Third Federal offers fixed-rate terms of 15 or 30 years, with no closing costs and lower rates than other refinance programs.
  • Jumbo refinance loans. For borrowers who need a refinance loan of more than $510,400, jumbo loan refinances are available as a 3/1 or 5/1 ARM in terms of 30, 15 or 10 years. Discounts are available on jumbo loans up to $1 million.

Third Federal doesn’t advertise government-backed loan programs for refinance mortgages.

Home equity products

  • Home equity loans. Homeowners can get a lump sum of cash through Third Federal’s home equity loans, available in fixed-rate terms of five and 10 years, or as a 5/1 ARM.
  • Home equity lines of credit (HELOCs). Borrow up to 80% of your home equity as a line of credit, similar to a credit card. HELOC borrowers have no closing costs or minimum draw requirements, and can access their money using a check or debit card.

Third Federal Savings & Loan special mortgage programs

Smart Rate Adjustable-Rate Mortgage

Third Federal’s Smart Rate Adjustable-Rate Mortgage starts as a typical 3/1 or 5/1 ARM, which carries a lower initial interest rate than their fixed-rate loans. In a traditional adjustable-rate mortgage, the interest rate stays the same for a period of a few years, and then adjusts based on market conditions. In a 3/1 ARM, the rate stays the same for three years, then adjusts each year after. With the Smart Rate mortgage, Third Federal allows you to lock in a rate for up to five years once your variable-rate period starts, giving you more certainty on your monthly payments.

$295 Low-Cost Mortgages

This feature reduces closing costs on many of Third Federal’s mortgages. The company says they pay all other closing costs and fees, leaving you with a charge of just $295, in addition to your down payment. However, your interest rate will be slightly higher.

This feature is available on 10-, 15- and 30-year, fixed-rate mortgages as well as their Smart Rate ARMs.

Advantage Preapproval

Third Federal allows customers to lock in an interest rate at the preapproval stage, earlier than many lenders. If rates go down, homebuyers can ask for the lower rate, but if they go up, they’re already guaranteed the initial lower rate.

First-Time Homebuyer Credit

Third Federal offers first-time buyers a $750 credit toward their closing costs, along with a 60-day mortgage rate lock.

The mortgage application process

  • How to apply. Third Federal recommends that homebuyers start by getting preapproved for a mortgage, which can be done online. When you’ve found the home you want to buy and have a purchase agreement, it’s time to apply for the mortgage. This can also be done online, over the phone or in person. The application takes about 20 to 30 minutes, and involves giving Third Federal information about your income, assets and debts. At the time you apply, you’ll generally lock in your interest rate. When your application is submitted, Third Federal will order an appraisal of the property you plan to buy.
  • Disclosure process. Within three business days of submitting your application, you’ll get a loan estimate through a secure web portal. Third Federal allows customers to upload and sign documents electronically during the application process, as well as track the status of their loan online. Later, you’ll get a closing disclosure, loan agreement and deed of trust to review. These specify the specific terms you’re agreeing to as a borrower.
  • Submitting loan for approval. After the home has been appraised, your loan application will go to Third Federal’s underwriters for final approval. This takes about three weeks.
  • Closing. Your closing will take place at a Third Federal branch or a title company office near you so you can sign paperwork and pay your closing costs and down payment. In some cases, a title company representative can come to your home for the closing. For primary residences or second homes, Third Federal offers an “on-time closing guarantee” for a set date between 30 and 60 days after the loan application is submitted. Third Federal’s entire loan process typically takes about 30 days from application to closing.
  • Servicing. Third Federal services all of the mortgage loans it originates.

Communication during the process

If you apply for your mortgage in person or by phone, a loan officer will help you along the way. If you apply online, a loan officer will contact you soon after your application to go over it with you. This loan officer will be your main contact throughout the mortgage application process.

Call Third Federal with any questions at 844-798-7784. Their customer service hours are Monday through Thursday from 8:30 a.m. to 5 p.m. EST, Friday from 8:30 a.m. to 6 p.m. EST and Saturday from 8:30 a.m. to 1:30 p.m. EST. You can also send Third Federal an email request through your online account or fill out an online form to request help.


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