Berkshire Bank Mortgage Review

Berkshire Bank was founded in 1846 as the Berkshire County Savings Bank and has grown into the largest regional bank headquartered in Massachusetts. The bank’s parent company, Berkshire Hills Bancorp, moved its corporate office to Boston in 2017, where it oversees the operations of 97 full-service branches across Massachusetts, New York, Connecticut, Vermont, New Jersey, and Pennsylvania.

Berkshire provides conventional personal and business banking solutions, alongside a variety of insurance, loan and wealth management services.

Berkshire Bank Quick Facts

  • Geared toward first-time homebuyers, low-to-moderate income borrowers, and those who are unable to make large down payments
  • Largest regional bank headquartered in Massachusetts
  • Named one of Massachusetts’ Most Charitable Companies in 2016 by the Boston Business Journal
  • Flexible credit score minimums, with options available to borrowers with scores as low as 500
  • Provides a number of specialty programs, like HomeReady and Home Possible mortgages, along with government-backed options like FHA and USDA loans
  • Operates 28 branches that are officially accredited by the Better Business Bureau

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Berkshire History

For over 170 years, Berkshire Bank has provided traditional banking services to New England residents, particularly in the state of Massachusetts. Despite its limited selection of mortgage options, Berkshire is able to support a wide range of borrower needs through specialty home loans and government-backed programs.

The bank facilitates Fannie Mae’s HomeReady mortgages and Freddie Mac’s Home Possible loans, both of which feature down payment minimums as low as 3 percent. Additionally, Berkshire offers FHA and USDA loans for qualified borrowers, though some income restrictions may apply.

All of Berkshire Bank’s home financing solutions are tailored to borrowers who may have difficulties qualifying for a conventional fixed or adjustable-rate loan from other lenders. Low-to-moderate income homebuyers can benefit from the bank’s 97 percent financing options, or take advantage of USDA’s no money down program for homes in qualified rural and suburban areas. 

First-time homebuyers can take advantage of the low down payment requirements on a HomeReady or FHA loan, which can lock in affordable interest rates for a fixed or variable repayment term. Program eligibility is determined through a host of financial criteria, including credit scores and debt-to-income ratios, but Berkshire features some of the most flexible qualification guidelines currently available.

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Berkshire Bank Loan Specifics

Compared to most regional and nationwide lenders, Berkshire Bank offers a markedly limited variety of mortgage options. The bank’s website only lists four lending options for purchasing a new home, all of which seem to be tailored to first-time homebuyers, including HomeReady, Home Possible, FHA, and USDA mortgages.

Borrowers with low-to-moderate income who are unable to afford large down payments may also benefit from this lender’s home loan products, as most can be secured with as little as 3 percent down.

HomeReady Loans

Originally designed by Fannie Mae, this specialty loan program provides creditworthy low-to-moderate income borrowers with affordable mortgage rates and monthly payment amounts. A HomeReady mortgage can be set up as either a fixed-rate loan with 10-, 15-, 20-, and 30-year repayment term, or an adjustable-rate mortgage with 5/1, 7/1, and 10/1 terms.

Homebuyers with credit scores of 620 or higher can qualify for this mortgage option with as little as 3 percent down, though certain income restrictions do apply. Down payments and closing costs can be covered by multiple sources, including gifts and grants, with no personal fund minimum requirements.

Unlike government-backed loans, this mortgage option allows borrowers to cancel their mortgage insurance once the equity in their home reaches 20 percent.

Home Possible Loans

This specialty loan program was created by Freddie Mac to help homebuyers with low-to-moderate income qualify for fair mortgage rates and flexible repayment terms. The home loan can be negotiated as a 15- to a 30-year fixed-rate mortgage or as an adjustable-rate mortgage with 5/1, 5/5, 7/1 and 10/1 terms.

Borrowers with credit scores of 660 or higher are encouraged to apply, though Freddie Mac will also consider forms of non-traditional credit for those without firmly established credit histories. This home loan program is available for 1-4 unit households, condos, and planned-unit developments.

FHA Loans

Borrowers looking for a government-backed mortgage with low down payment requirements may prefer this home loan program, as it is fully insured by The Federal Housing Administration. Eligible borrowers can secure this home loan with as little as 3.5 percent down, but mortgage insurance is required on all purchases.

The FHA developed this program to help homebuyers whose credit scores or debt-to-income ratios make them ineligible for conventional mortgage products. A credit score of 580 is needed to secure the 3.5 percent down payment minimum, but borrowers with scores as low as 500 can still qualify with 10 percent down.

This mortgage option is not limited to low-income borrowers, though there are limits to the amount the FHA will insure.

USDA Loans

This government-backed mortgage option is insured by The United States Department of Agriculture and is available to low-income borrowers who want to purchase a home in certain rural or suburban areas. Homebuyers with credit scores of 640 and higher should have no problem qualifying, though some income restrictions do apply.

A USDA home loan is a 30-year fixed-rate mortgage with a 100 percent financing option, making it a great choice for borrowers who are unable to afford even a small down payment. Mortgage insurance is required as part of this home loan program and a one percent upfront fee must be paid at closing, though interest rates are typically lower than other government programs like FHA.

Berkshire Bank Mortgage Customer Experience

Berkshire Bank provides conventional lending services that lean toward face-to-face interactions at one of its 113 branches, which are predominantly located within New England. A majority of its home loans are facilitated in Massachusetts, though some mortgage options may be available to homebuyers in other states of the Mid-Atlantic region.

In 2016, Berkshire Bank was named one of Massachusetts Most Charitable Companies by the Boston Business Journal for its work with low-to-moderate income communities.

While the bank’s website does feature a number of helpful resources, there is a noticeable lack of specific information about its mortgage products. Berkshire Bank does not list any information about conventional fixed and adjustable-rate loans online, and very little about its government-backed and specialty programs.

Luckily, the organizations and government agencies it partners with providing a wealth of free online resources to help borrowers understand the advantages and disadvantages of their mortgage options. More information can be obtained by contacting one of the bank’s lending agents directly, either by phone or by visiting a branch in person.

Berkshire Bank’s website facilitates personalized rate quotes for interest borrowers, though personal information is required before a quote is generated, including a social security number. The mortgage application process can be started online and users are able to apply for pre-approval by submitting a web form through the bank’s website.

In terms of informational content, the bank does not regularly update its website with new blogs or articles. Additionally, its FAQ pages and mortgage calculators are a bit out of date and can be difficult to use. Borrowers seeking a traditional lending experience may prefer Berkshire’s face-to-face approach, as its digital presence is less developed than tech-savvy users may be accustomed to.

Berkshire Bank Lender Reputation

Berkshire Bank has been in operation for over 170 years and is widely considered a trustworthy and community-focused financial institution. Of the bank’s largest physical branches, 28 have earned official accreditation from the Better Business Bureau and possess a BBB rating of A+. Berkshire Bank is a member of the FDIC and an Equal Housing Lender.

This lender’s unique dedication to low-to-moderate income borrowers has helped to distinguish it as a socially conscious bank with a clear interest in the wellbeing of Massachusetts communities. To date, only a single customer complaint has been filed against Berkshire Bank with the Consumer Financial Protection Bureau.

  • Information collected on Feb. 4, 2019

Berkshire Bank Mortgage Qualifications

Borrowers can secure affordable interest rates and monthly payments with as little as 3 percent down via the bank’s specialty programs, or no money down through USDA’s 100 percent financing option for homes in eligible rural and suburban areas.

Although Berkshire Bank does not have the widest variety of mortgage options, it’s home loans can still meet the needs of a diverse range of homebuyers. The bank’s mortgage catalog is made up of two specialty programs (HomeReady and Home Possible) and two government-backed programs (FHA and USDA) which all feature low down payment requirements.

Loan Type Rate Type Down Payment Requirements Credit Score Requirements Mortgage Insurance Requirements Cancellable mortgage insurance?
HomeReady Loans Fixed or Variable 0.03 620 Yes, if down payment is Yes, once home equity reaches >20%
Home Possible Loans Fixed or Variable 0.03 660 Yes, if down payment is Yes, once home equity reaches >20%
FHA Loans Fixed or Variable 0.035 580 Yes No
USDA Loans Fixed 0 640 Yes No

Almost all of Berkshire’s home loans feature flexible credit score requirements, making this lender a solid choice for borrowers with scores below the industry average. A HomeReady mortgage can be secured with credit scores as low as 620, though traditional credit histories are a significant factor in eligibility.

In contrast, Freddie Mac’s Home Possible mortgage allows homebuyers to submit non-traditional credit histories with their application. Berkshire Bank’s dedication to supporting low-to-moderate income applicants, first-time homebuyers and borrowers unable to make large down payments has helped this lender distinguish itself as a trusted customer-focused institution.

Berkshire Bank Phone Number & Additional Details

Homepage URL: http://www.berkshirebank.com/
Company Phone: 1-844-277-0077
Headquarters Address: 24 North Street, P. O. Box 1308, Pittsfield, MA 01202-1308

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