Third Federal Savings & Loan Mortgage Review

If you’re lucky enough to live in Third Federal’s lending service area, you’ll get to work competitive rates and a customer-focused lender, but people who don’t live in the right places need not apply.

10–30 Years
APR Range
Min. Down Payment
4.3 / 5.0
SimpleScore Third Federal Savings 4.3
Perks 5
Credit Impact 5
Customer Satisfaction N/A
Product Variety N/A
Fees 3
  • Choose terms ranging from 10 to 30 years
  • Closing costs of just $295
  • Adjustable- and fixed-rate loans available
  • Rate locked at preapproval
  • Not available in all areas
  • Increased rates for jumbo loans

Your home is one of the largest purchases that you’ll make in your life. While buying a new home is a goal for many adults, few people are fortunate enough to be able to pay for a home in cash. If you’re buying a home, you’re probably going to need a mortgage to make the purchase.

Mortgages can be expensive, though. In 2020, the median home price reached $260,900, which could end up pretty pricey with the additional fees and interest that come with a mortgage. Given the size of the investment, it’s important to secure the best loan, with the lowest possible rate, if you want to be able to buy a home affordably.

Third Federal Savings and Loan may be able to help you do that. This lender is a major mortgage provider based in Cleveland, Ohio. It is best known in Ohio and Florida, but actually operates in many states across the country. The lender is well-known for its efforts to revitalize historic neighborhoods of Cleveland, including the Slavic Village, where its first location was opened in 1938, during the Great Depression.

And the perks of using Third Federal Savings and Loan as your lender have only grown from there. If you’re looking for a mortgage loan, you should take the time to decide if this is the right mortgage lender for you.

To help you decide, we’re comparing the lender’s interest rates, loan terms, customer support, fees, and customer satisfaction ratings below using our proprietary SimpleScore methodology.

In this article

    What we like about Third Federal Savings & Loan 

    Multiple loan terms

    Many mortgage lenders stick with the traditional 15-year and 30-year term options for their mortgage loans, but Third Federal expands its offerings to include 10-year mortgages and 1-year bridge loans. What’s nice about these other loans is that they give borrowers more options to customize their monthly payment or loan terms.

    Community-focused lending

    Third Federal is heavily customer and community-focused when it comes to mortgage lending. It offers a HomeReady program that makes borrowing more affordable to lower- or average-income borrowers. The process to apply is simple, too. Once Third Federal reviews applicants for eligibility, qualified buyers can get a mortgage with as little as 3% down and get a grant of $3,000 to help make that down payment.

    Commitment to loan servicing

    This lender also commits to servicing 100% of the loans it originates. Other lenders will sell a large percentage of the loans they close to other mortgage servicers. The new lender will then service the loan instead. But with Third Federal, borrowers will continue working with their lender rather than dealing with another company for servicing.

    Low closing cost options

    Mortgages involve closing costs, such as paying for interest rate points, origination fees, and other fees involved in buying a home. Altogether, closing costs can mean paying a few thousand dollars upfront before you even get your first mortgage bill.

    Third Federal offers a special kind of low closing cost loan, which cost the just $295 in closing costs. These loans charge slightly lower interest rates to recoup the costs the lender pays up front, but they can save borrowers from needing to have enough cash on hand to handle a potentially expensive bill. And, according to Third Federal, the interest rate on this type of loan is still typically lower than what other lenders charge for their full closing cost loans. This feature is available on 10, 15 and 30-year fixed rate and Smart Rate for purchases.

    Things to consider

    Limited service area

    Third Federal operates in many states across the country but it doesn’t offer loans in all of those regions. Even if you’ve opened a savings or checking account with Third Federal, you still might not be able to apply for a loan from the bank.

    You can get mortgage loans in:

    • Florida
    • Georgia
    • Illinois
    • Indiana
    • Kentucky
    • Maryland
    • Missouri
    • New Jersey
    • North Carolina
    • Ohio
    • Pennsylvania
    • Tennessee
    • Virginia

    Lackluster online application experience

    Third Federal lets customers apply for loans online but does not have a streamlined application process. Some lenders, especially specialized online lenders, have sleek user interfaces and features like automatic document retrieval that makes it easier to apply online.

    With Third Federal, the process is less streamlined and you’ll likely have to meet with a lender in person before you can complete the full application process. That could be a hassle for some borrowers, who may not want to meet with a lender in person to get the loan done.

    Third Federal Savings & Loan vs. the competition

    Rocket Mortgage

    Rocket Mortgage is designed with the online consumer in mind. While you can apply online with Third Federal, Rocket Mortgage has a sleek website and useful features, like automatic import for financial account information, that makes it easy to apply online. You can get a prequalification in just a few minutes.

    However, there is a tradeoff. Rocket Mortgage tends to have higher rates than other lenders due to convenience, so you may not want to take this tradeoff if you can avoid it. Otherwise, you may end up paying more on your interest rate and on your closing costs.

    Bank of America

    Bank of America operates across the country, so unlike Third Federal, you can borrow from it almost regardless of where you live. It also offers an online pre-qualification and application option if you’d rather get your loan online.

    Another perk is that current Bank of America customers can get discounts, including up to $600 off closing costs. Is that enough to be competitive with the low closing cost loans offered by Third Federal? It will depend on your interest rate and other factors, but it’s still worth the comparison.

    New American Funding

    New American Funding is a solid choice for people who have less than perfect credit. The company also operates in every state except Hawaii and New York. If you’re struggling to get a loan from Third Federal, either due to your credit or where you live, New American Funding’s manual underwriting process might be the right fit for you. You may pay more for a loan, though — but that’s the price you pay for lower credit scores in most cases.

    How much will a/does a Third Federal Savings & Loan mortgage cost? 

    As with any mortgage, the total cost can vary due to a number of factors. You have to pay interest on any mortgage loan based on the amount you borrow and the loan’s interest rate, and the same is true for Third Federal.

    With good credit, you can qualify for the lowest available rates, but those with less than perfect credit may have to pay more. Third Federal’s lowest rates range from 2.580% APR to 3.320% APR. Once Third Federal Savings and Loan reviews your application, if you’re approved, you’ll get an offer that includes the APR that the bank will charge on your loan. Once that happens, you’ll be able to calculate the total cost of your loan.

    Closing costs are also important to consider. Typically, closing costs can add up to the thousands of dollars, but with Third Federal’s low-cost mortgages, you can limit the closing costs to just $295. Whether that’s an option you choose to take in lieu of a lower rate is something you’ll have to decide, but it’s an option to save money on your loan costs up front. It will cost you more in the long run, though.

    Cheaper alternatives to Third Federal Savings & Loan mortgages

    If you have good credit and live in Third Federal’s service area, the bank might be the cheapest option for a mortgage. Still, it’s worth the effort of shopping around to make sure that you get the best possible interest rate.

    For example, you might qualify for better rates from lenders like Bank of America or Chase if you have good credit, a solid debt-to-income ratio and a high down payment to put down. You can also look into credit unions too, which offer lower rates to customers on a regular basis. You’ll have to be a member to take advantage of those rates, but it can be a smart move to help save money.

    Third Federal Savings & Loan in the news

    • On June 11th, 2020, reported that Third Federal Savings & Loan announced that its employees would be required to wear masks in branches and that customers wearing masks may “be asked to lower them briefly to verify their identity.”
    • On July 30th, 2020, BusinessWire announced that Third Federal reported a net income of $26.8 million for the quarter that ended on June 30th, 2020, an increase of roughly $8.5 million over the same quarter the previous year.

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    Reviewed by

    • Angelica Leicht
      Angelica Leicht
      Mortgage Editor

      Angelica Leicht is an editor at The Simple Dollar who specializes in mortgages, mortgage refinancing, home equity loans, and HELOCs. She is a former contributing editor to and