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Find the best mortgage lenders for first-time buyers

Buying a home is a lot of work, but the right lender makes it easier

AmeriSave Mortgage, Caliber Home Loans, Network Capital Funding Corporation, ClearPath Lending, Rocket Mortgage, LoanDepot and Better Mortgage
couple holding a sign outside their first home

If you’re a first-time homebuyer, you have a variety of mortgage options. Whether you choose a conventional or government-backed loan, it’s important to choose the right lender for your circumstances. Each borrower’s financial situation is unique, and chances are there’s a lender and a loan that can help you get into your first home.

Keep reading to get tips to find a lender and learn about the different types of loans you may be eligible for.

Our picks for top mortgage lenders for first-time homebuyers

There are now a number of online mortgage companies in addition to traditional brick-and-mortar lenders. Below, we compare our picks for the top lenders for first-time buyers, based on recent verified reviews, loan options and availability. Read our methodology for more on how we selected our top picks.

Our pick for flexible requirementsRocket MortgageAUTHORIZED PARTNER
  • Loan types: Conventional, jumbo, FHA and VA
  • Minimum credit score: 580 to 620
  • Availability: Nationwide

If you’re a first-time buyer who’s concerned about how your lower-than-average credit score may affect your ability to buy, Rocket Mortgage could be one of the best lenders for you. The company offers a range of options, including those under its Fresh Start program, which lets you get funding even with a lower credit score.

It’s transparent about rates and provides an online calculator to help estimate your total costs. Rocket Mortgage charges fees like origination fees, application fees and closing costs, all of which vary depending on the terms of your mortgage loan. The timeline for closing is similar to other conventional mortgage lenders, averaging 30 to 45 days.

“Rocket Mortgage really went above and beyond our expectations. As first-time homebuyers, my husband and I were so scared. We had no idea what we were doing and because we were doing a private sale, we didn't have realtors to assist us. They were thorough in explaining things, quick, informative and professional,” a reviewer in Pennsylvania told us recently.

Our pick for fast online quotesAmeriSave MortgageAUTHORIZED PARTNER
  • Loan types: Conventional, jumbo, FHA, VA and USDA
  • Minimum credit score: 600 to 620
  • Availability: Nationwide

AmeriSave offers a solid level of service and a fast application process (under three minutes). Another nice feature about AmeriSave is that it allows you to track your loan online. Thanks to the wide range of tools and lower closing costs, AmeriSave is an excellent choice for those with average to good credit.

Loan officers are only available online. There is chat service, and you can also find various tools to make the process as simple as possible, including a portal for e-filing. Younger borrowers sometimes appreciate that you do not have to go in or mail documents back and forth to sign your application.

“I liked the simplicity of the breakdown and transparency. … It was my first-time home buying experience and it was like, ‘Hey, I want you to be comfortable with whatever you walk away with. If you're not comfortable to any point, we can discuss it,’” said a reviewer in New Jersey.

Our pick for customer supportCaliber Home LoansAUTHORIZED PARTNER
  • Loan types: Conventional, FHA, VA, USDA and new construction
  • Minimum credit score: 620
  • Availability: Nationwide

Caliber Home Loans is a good option for first-time homebuyers because of the education and support services available to help find the right loan type. It offers a range of mortgage loan options, including Home Possible and HomeReady loans.

You can apply online. After that, you’ll work with a dedicated loan officer through the rest of the process. One of the biggest drawbacks for this company is that it does not advertise its interest rates. This means you have to request a quote to get more information.

“​​Caliber Home Loans has been a mostly a wonderful experience. My loan consultant has been very helpful and prompt. The whole process seemed streamlined and made being a first time home buying a very pleasant experience. I still gave them five stars but there is some concerns with their customer service phone line and supposed online bill pay,” a reviewer in Ohio said.

Additional mortgage lenders to consider

If you still aren’t sure, consider one of these mortgage companies. Depending on your finances and where you live, Better Mortgage, LoanDepot, Guaranteed Rate, Network Capital Funding Corporation or ClearPath Lending might be right for you.

Better MortgageAUTHORIZED PARTNER
  • Loan types: Conventional and jumbo
  • Minimum credit score: 620
  • Availability: Most states

One standout feature of Better Mortgage is that it doesn’t charge lender or processing fees, which are typically around 1% of the purchase price with a traditional lender. Plus, its lenders don’t work on commission, so you can be assured no one will try to upsell you on a larger loan you may be uncomfortable with.

To obtain certain benefits, you need to meet a few requirements. Your debt-to-income ratio can’t exceed 35%, and you must pay all closing costs out of pocket, which average $150 to $3,500.

Better Mortgage is only available in 43 states, so check the company’s website first to ensure you’re within its service area.

LoanDepotAUTHORIZED PARTNER
  • Loan types: FHA, VA, jumbo and other loans
  • Minimum credit score: 500
  • Availability: Nationwide

LoanDepot is primarily an online lender, but it also has 200 physical locations across the country for borrowers who prefer face-to-face contact. This could be preferable for a first-time buyer who may be less familiar with the homebuying process and wants the added assurance of meeting in person.

The company doesn’t publish rates online but will provide them upon request. It originates loans but doesn’t process payments. This means your loan will be transferred to a servicer after it is finalized with LoanDepot. However, this is standard practice with many lenders and won’t affect your experience obtaining a loan.

Guaranteed Rate MortgageAUTHORIZED PARTNER
  • Loan types: Conventional, FHA, VA, jumbo and interest-only
  • Minimum credit score: 620
  • Availability: Nationwide

Guaranteed Rate has been in the home loan business for over 20 years and offers both online and in-store mortgage services for conventional and government-backed loans. With over 850 physical locations across the country, it is ideal for a first-time buyer who wants the ease of applying online but still wants to meet with a representative in person.

You can use the online calculator to get an estimate of your interest rate and payments, but you must provide information about the purchase price and your credit score to get a personalized quote.

The company makes it a point to be transparent about rates and fees and offers all this information upfront, so you know right from the start how much your loan will cost.

Network Capital Funding CorporationAUTHORIZED PARTNER
  • Loan types: Conventional, FHA, USDA and VA
  • Minimum credit score: Low- to mid-600s
  • Availability: Some states

Network Capital is only available to borrowers in 10 states (Arizona, California, Florida, Maryland, North Carolina, New Jersey, Oregon, Texas, Virginia and Washington), but it still offers a quick and low-cost mortgage option to first-time homebuyers who qualify.

The company doesn't charge any lender, application or processing fees. It doesn’t display rates online, and you have to actually start the application process to see a representative, but customers report competitive interest rates.

Network Capital specializes in fast closing, offering timelines as short as 15 days. If you live within its service area and have a decent credit score, it might be the right lender for you.

ClearPath LendingAUTHORIZED PARTNER
  • Loan types: Conventional and FHA
  • Minimum credit score: Varies
  • Availability: Some states

A big selling feature of ClearPath is its Loyalty Program, where you’ll automatically be notified when a lower interest rate becomes available. This can be great for first-time buyers who may need a longer time to find a house and need to know they’re always getting the best rate.

ClearPath is a relatively new company but frequently earns positive reviews from customers for its conventional, government-backed and refinancing options. It’s available in about 25 states, including California, Texas, Illinois, Nevada, Michigan, Virginia and Pennsylvania.

How to choose a mortgage lender as a first-time buyer

If you wanted to buy a home 30 years ago, you’d head to your bank and apply for a loan. While this is still a valid option for first-time buyers, there are now a number of online lenders to choose from that can streamline the process.

Whatever route you choose, there are key steps you should take beforehand to ensure you’re in the best position to qualify and that you choose a lender who’ll partner with you throughout the entire process.

  1. Know your credit score: Ideally, you should know your credit score long before you speak with a lender. Most people start planning years out to buy their first home, and this is when you should take a hard look at your credit history. Start by obtaining a free and secure credit report online and double-checking it for accuracy. Take action right away to correct any mistakes by contacting the appropriate credit reporting company.

    Next, you should try to increase your credit score as much as possible. There’s no definitive answer on what lenders consider a good credit score, but aim for around 740 for the best rates. Scores under 740 are OK — you can still qualify for a loan. Just know that you’re likely to get slightly higher interest rates.

    To qualify for most conventional loans, you need a score of 620, but there are government-backed loans available for those with scores as low as 500.

  2. Do your homework: Know the market and know what your options are for getting a mortgage. Take a hard look at your finances and come up with a realistic number for how much in monthly payments you can actually afford.

    Don’t forget you’ll now be responsible for all utilities, repairs and HOA fees on top of your monthly loan repayment. You should also know what kind of market you’re entering. If you’re in a highly competitive market, you may want a lender you can meet with in person or get hold of easily on the phone.

  3. Shop around: Get quotes from two to three mortgage lenders before you decide on one; consider talking with traditional banks, credit unions, brokers and online lenders.

    It’s worth noting that most lenders will perform what’s known as a “hard inquiry” on your credit when you obtain a quote, which temporarily dings your credit score. However, if you get all the quotes close together (like within 45 days), credit agencies will recognize that you’re shopping around for loans, and there won’t be as big of a hit to your score.

  4. Understand all costs upfront: The total cost of your loan is more than just the amount you borrow — it also includes interest, taxes, insurance and closing costs. Some of the simpler online mortgage calculators can be deceiving by not factoring in these costs. Your lender should provide an estimate with all costs involved in the purchase, including lender charges and other closing costs. If anything is unclear, ask!
  5. Choose a lender you’re comfortable with: Lenders are in a competitive market, and to a certain extent, they all offer similar rates (based on your credit score, down payment and size of your loan). The homebuying process can be stressful, and things move fast after you put in an offer. So you want to know you have a lender who’s responsive. Ask ahead of time how you will communicate with your lender, how fast it’ll respond to requests and how long the closing timeline is.

"What loan is best for first-time homebuyers?

As a first-time homebuyer, you have many financing options. The good news is that you are in a unique position to qualify for programs that other borrowers may not be eligible for.

Here’s a rundown of your most common options, separated into two categories: conventional and government-backed. For a comprehensive look at all your options, check out our article on first-time homebuyer loans and programs.

Conventional

The conventional loan limit is currently set at $548,250 in most counties.

Conventional loans are the most common type of home loan. These loans are funded by private lenders and are typically “conforming,” which means they conform to the loan limits set by the Federal Housing Finance Agency (FHFA). Currently, the conforming loan limit is set at $548,250 in most counties.

To qualify for a conventional loan, you likely need a credit score of at least 620 and to be able to pay at least a 5% down payment. Any loan with a down payment under 20% will have to add private mortgage insurance (PMI) until 20% of the principal balance is paid off.

  • Conventional 97: This loan is ideal for a borrower with good credit but who may not be able to make a large down payment. The “97” refers to how much of the purchase price these loans cover, meaning you only have to put 3% down. These loans are available for 30-year terms at a fixed rate.
  • HomeReady (Fannie Mae) and Home Possible (Freddie Mac): These loans are intended for first-time homebuyers (though you don’t have to be) with low to moderate incomes. Both programs offer low interest rates, low down payments and a more flexible approval process. They both require you to be purchasing a single-family home and that you take a homebuyer education course.

Government-backed

Government-backed loans are also funded by private lenders, but they are insured by the federal government. This allows lenders to be more lenient with their terms and extend loans to borrowers who might not otherwise qualify due to a low credit score or insufficient income. The three most popular types of government-backed loans are FHA, USDA and VA loans.

  • FHA loan: Backed by the Federal Housing Administration, these loans offer down payments as low as 3.5% to those with credit scores of 580 or higher (or 10% down with a score of 500). This option is ideal for those with a lower credit score who cannot qualify for a conventional loan.
  • USDA loan: These loans are backed by the U.S. Department of Agriculture and are intended for low-income rural Americans who can’t qualify for a conventional loan. They have below-market interest rates for those who qualify, with 0% down payments. This loan is a great option if you live in a rural area and have a good credit score.
  • VA loan: Backed by the Department of Veterans Affairs, VA loans are specifically for veterans or active-duty service members who meet eligibility requirements. In some cases, surviving spouses can also qualify. VA loans can get you into a house with no down payment and at a low rate.

State-run programs for first-time buyers

Most states have local programs to help first-time homebuyers, and borrowers should check what’s available in their area. For example:

Bottom line

Buying a house for the first time is an exciting, sometimes overwhelming process, but there are reputable lenders and resources that can help. Research your options and start talking to lenders to find one you feel comfortable with. Each borrower has slightly different needs, which will inform the direction you take and the type of loan you pursue.

Methodology

To find the best lenders for first-time homebuyers, we first considered recent reviews and ratings. To be eligible for top picks, lenders first had to have an overall satisfaction rating above 4 stars on our site (as of July 1, 2021) and national availability. To narrow it down even more, the ConsumerAffairs Research Team analyzed recent review data to find out which companies had the most 5-star reviews from first-time buyers.

ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. To learn more about the content on our site, visit our FAQ page.
  1. Federal Housing Finance Agency (FHFA), “FHFA Announces Conforming Loan Limits for 2021.” Accessed July 26, 2021.
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The ConsumerAffairs Research Team believes everyone deserves to make smart decisions. We aim to provide readers with the most up-to-date information available about today's consumer products and services.