Best mortgage lenders for first-time buyers
Homebuying is a lot of work, but the right lender makes it easier
There's a variety of loan options for first-time homebuyers. Whether you go with a conventional or government-backed loan, it’s important to find the right lender for your circumstances. Everyone’s financial situation is different, and chances are there’s a loan that can help you get into your first home.
Our picks for top mortgage lenders for first-time buyers
The best mortgage lenders for first-time homebuyers should be easy to work with, widely available and highly rated by existing borrowers.
We primarily considered recent reviews and ratings, loan options and availability to select our top picks. Read our full methodology for more on how we chose the best mortgage lenders for first-time buyers.
- Loans for first-time buyers: Conventional, FHA, VA and jumbo
- Minimum credit score: 580 to 620
- Minimum down payment: 3% to 5%
- Availability: Nationwide
Rocket Mortgage has a streamlined online process, and it’s also one of our top picks for online lenders. The website makes it easy to get started, and you can track your loan’s progress through an easy-to-use mobile app. Preapproval takes about three days, and closing takes 30 to 45 days.
What to consider: Rocket Mortgage doesn’t have physical locations, and it doesn’t offer USDA or construction loans.
What reviewers like: “Rocket Mortgage helped minimize the stress involved in purchasing my first home. They were extremely responsive, patient and knowledgeable,” a reviewer in Connecticut said.
“The experience was effortless and seamless. One can really buy a house through a mobile app, it is truly unbelievable and amazing,” according to a reviewer in Florida.
A reviewer in Ohio said, “I never felt like I was figuring things out alone.”
“Smooth experience as a first time home buyer! I would recommend to any first time buyer for sure! Even when there were things we were confused about, there was easy and fast help and response to explain the process,” a reviewer in California said.
- Loans for first-time buyers: Conventional, VA, home construction and pilot programs
- Minimum credit score: Varies
- Minimum down payment: Varies
- Availability: Nationwide
Nbkc offers a few mortgage options for first-time buyers. You can pick a 15-year or 30-year fixed-rate term or an adjustable-rate mortgage (ARM). Highlights include a simple online application, competitive rates and knowledgeable support staff.
What to consider: Some lenders are more transparent about fees, and there are no physical locations outside the Kansas City area. The bank doesn’t offer USDA loans.
What reviewers like: “Nbkc bank has great service capabilities. My experience with them has been fantastic. The reps professionally took care of everything,” a reviewer in Florida said.
A reviewer in Washington said their loan officer “was knowledgeable, personable and efficient! He got the ball rolling right away, walked us through each and every step of the process. He answered all my questions, even the silly ones!”
“Nbkc bank offered the best deal for a home loan. Our loan officer was great. He made it easy,” a reviewer in Florida said.
A reviewer in New Jersey said their rep was “friendly, professional and knowledgeable. He provided us with necessary paperwork quickly and efficiently and supported us through losing offers and eventually a difficult closing. We now have our first home.”
- Loans for first-time buyers: Conventional, FHA and jumbo
- Minimum credit score: 620
- Minimum down payment: 3% to 20%
- Availability: Most states (not HI, NV or NH)
Better Mortgage is another good option for first-time buyers who want to complete much of the process online. The website features free mortgage and amortization calculators. We also like that there are no commissions or origination fees. You can get preapproved in as little as three minutes. On average, it takes three to six weeks to close.
What to consider: People who are internet-savvy are more likely to find the online dashboard platform most useful. Better doesn’t have as broad of a loan selection as some other lenders or brokers (no VA or USDA loans, for example).
What reviewers like: According to a reviewer in Virginia, “Better Mortgage was very responsive and quick.” A reviewer in Arizona likes that Better is “really transparent with the rates,” and its lending officer gave “multiple options and responded to emails promptly.”
“My wife and I were looking for a less traditional, less stuffy mortgage route, and Better Mortgage fit the bill for us,” a reviewer in New York said. “And all the rates are competitive. All the information and transparency was there.”
A reviewer in New Mexico said, “Better was very upfront about what they needed from me and I was able to provide that. They didn't keep asking me for stuff over and over again. I liked the whole process. The new rate and terms I got were just what I wanted. The experience was quick and no hassles.”
“Everything was so easy to do. I could call anyone to ask any questions or any issues in no wait time,” a reviewer in New York said. A reviewer in North Carolina highlighted that “there was nothing that caught me by surprise.”
- Loans for first-time buyers: Conventional, FHA and VA
- Minimum credit score: 580 to 680
- Minimum down payment: 0% to 3.5%
- Availability: Most states
Zillow Home Loans is a good pick for first-time buyers because the platform makes it easy to find a house and finance it. You can also access resources for down payment assistance. The company is a direct lender that offers FHA loans with 15-year or 30-year terms.
Conventional loans are available with 15-year, 20-year or 30-year terms. Preapproval only takes a few minutes, and the time to close is one week to two months.
What to consider: Zillow Home Loans doesn’t have USDA or jumbo loan options. Additionally, it doesn’t offer mortgages in New York, New Jersey, Vermont, Hawaii, West Virginia, Utah or Maine.
What reviewers like: “I chose Zillow Home Loans with the purchase of my first home, and they did an excellent job,” a reviewer in Indiana said. “The interest rates they offer are good, and their team is the best!”
A reviewer in North Carolina said their loan officer “made our first home buying experience amazing! She clearly walked us through all of the steps (repeatedly, when we’d forget, and was happy to do so) and made sure we knew what to expect throughout our home buying process.”
“Scott was available to me day and night and put me at ease the whole time when looking for my first home!” a reviewer in Connecticut said. “Even when I was changing realtors, I stayed with Zillow because of Scott. He explained the process in detail, each step, additional charge and gave examples from his personal and professional experience that gave me reassurance in the process.”
- Loans for first-time buyers: Conforming and jumbo VA loans
- Minimum credit score: 620
- Minimum down payment: 0%
- Availability: Nationwide
Veterans United is a VA-approved lender available in all 50 states. Like other VA lenders, it has flexible credit score requirements, and there’s no down payment necessary. You can get 15-year or 30-year terms. The lender also offers homebuying education courses and credit counseling services.
What to consider: Veterans United has a few physical branch locations, mostly throughout the South and Midwest. The lender also offers USDA, FHA and conventional mortgages. However, it’s less transparent about fees for these programs.
What reviewers like: “This company works hard to get the results you desire and are quick to respond to questions and requests,” according to a reviewer in Iowa. A reviewer in Connecticut said they “can’t imagine a better team to be with me for my first home purchase.”
A reviewer in Texas said, “We shopped around for other lenders but nothing can compare to what Vets United offered. The customer service was great, we had no trouble getting a hold of our loan team. The whole process went smoothly and we didn’t have to stress about anything!”
“As a first time home buyer I was a little apprehensive as most people are,” a reviewer in Colorado said. “I tell you, as soon as I talked to Veterans United I immediately felt more at ease. Friendly and knowledgeable staff that treats you right and more like a friend than a stranger. Very prompt on getting paperwork turned in and thorough on every review process to ensure everything is accurate and ready for underwriting.”
A reviewer in North Carolina said: “An incredible team of truly dedicated people that went the extra mile to get my family into our first home. We felt so unprepared for the home-buying process, but the team at Veterans United took the time to give us the knowledge and confidence to make a competitive offer and take as much stress off of our shoulders as they could carry.”
- Loans for first-time buyers: Conventional, VA, USDA, FHA and I CAN mortgages
- Minimum credit score: 580 to 680
- Minimum down payment: 0% to 5%
- Availability: Most states (not HI)
New American Funding has great reviews and a wide selection of purchase loan options with fixed or adjustable interest rates. Through the I CAN mortgage program, repayment terms are available between eight and 30 years. It generally takes a day or two for preapproval. Times to close vary, but the lender guarantees your closing date.
What to consider: Even though it services home loans in most states, it only has physical branches in about half of them. The company advertises low lender fees, but other charges may apply — expect to pay about 1% of the loan amount in origination fees.
What reviewers like: “Dealing with New American Funding was super easy experience. For a first time home buyer, the whole process was a lot easier than I expected. My loan officer was very patient and had all the answers to my questions,” a reviewer in Texas said.
A reviewer in Florida liked that their loan officer “got to know us beyond our transaction and seemed genuinely excited for us and our big life moves.”
A reviewer in Maryland said that they had “a very convenient and professional experience with my loan officer. … As a first time home buyer, I would definitely recommend new American funding.”
“An overall respectful, smooth and painless process,” according to a reviewer in California. “We highly recommend working with New American Funding, especially if you are a first-time home buyer.”
“We just closed on our first home and we found the people from New American Funding made the process a simple one for us,” a reviewer in Washington said. “The start of the process, we were given worksheets of expenses and what to expect. From there, anytime we had inspections or anything that needed to be completed, we were notified right away and provided with everything we needed to complete each process as we went through the steps.”
- Loans for first-time buyers: Conventional, FHA, VA and USDA
- Minimum credit score: 600 to 620
- Minimum down payment: 0% to 3.5%
- Availability: Most states (not NY)
With AmeriSave, you can take advantage of a free online mortgage calculator to figure out costs. Once you’re pre-qualified, you can close on the loan in as few as 25 days. Your team of loan officers will help to determine how much you have to pay at closing. Then, you’ll lock in your interest rate and start uploading documents through an online portal.
What to consider: To minimize risk, conventional adjustable-rate mortgages (ARMs) come with a 2/2/5 cap, or a 2% maximum increase or decrease on the first and subsequent rate adjustments and a 5% maximum lifetime increase over the initial rate. A few reviewers indicate that reps can be hard to get hold of over the phone.
What reviewers like: “I reached out to a couple of lenders and AmeriSave had the best rate,” a reviewer in California said, adding that “they were super helpful, accommodating, and a really nice team.”
“I liked the simplicity of the breakdown and transparency. It's very noble if an organization can tell you straight upfront like, ‘Hey, this is the best that I can do. This is what we can do,’ and is willing to work with you and didn't look for me to circumvent myself,” a reviewer in New Jersey said.
“Everything I needed, AmeriSave would spend as much time on the phone as needed to get it straightened out. There was quite a bit that I had to do paperwork-wise, and they guided me through every step of the way,” a reviewer in Massachusetts said.
A reviewer in Michigan said, “I’m a first-time homebuyer and Lucan, the rep, was helpful, as well as Lorraine, the underwriter. I was impressed with Lucan’s attentiveness and knowledge.”
“AmeriSave helped us in FHA and the interest rate was nice. The reps explained everything and they made it less stressful for us first-time homebuyers. Everything was great from beginning to end,” a reviewer in Ohio said.
Tips for choosing a mortgage lender as a first-time buyer
Choosing a mortgage lender should not be taken lightly. After all, you’ll be paying them back for a long time, even if you refinance later. Here are some financial and other factors to consider when shopping around for the best lender for your first house:
Many lenders charge origination fees of 0.5% to 1.5%
- Ask who services the loan: Often, mortgage companies don’t actually service all the loans that they originate. (Origination is the application and approval process; the servicer processes your payments and manages your loan). A good loan servicer is important if you ever have to request mortgage forbearance or get rid of your PMI.
- Understand all the fees: Most notably, understand the origination fees. Many (but not all) lenders charge origination fees of 0.5% to 1.5% of the loan amount, which can add several hundred to thousands of dollars. Prepayment penalties are important to look for as well — you don’t want to get hit with another bill for paying your home debt off early. You should also watch out for appraisal and credit report fees.
- Ask about down payment assistance: Most lenders and credit unions offer some kind of down payment assistance. Depending on where you live, you might also have access to funding through your state, county or city.
- Look for other benefits: Some lenders offer discounts for setting up automatic mortgage payments. If you value convenience, look for a company with plenty of digital features. The best online mortgage lenders have secure online platforms for uploading and updating documents throughout the loan process.
What loan is best for first-time homebuyers?
As a first-time homebuyer, you have many financing options. The good news is that you're 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 home loans and buyer programs.
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 $647,200 in most parts of the U.S.
The 2022 conforming loan limit is $647,200 in most of the U.S.
To qualify for a conventional loan, you likely need a credit score of at least 620 and to be able to make at least a 3% down payment. Any loan with a down payment under 20% will require you to pay for 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.
- HomeReady (Fannie Mae) and Home Possible (Freddie Mac): These loans are intended for first-time homebuyers (though you don’t have to be one to qualify) with low to moderate income. Both programs offer competitive interest rates, low down payments and a more flexible approval process. You must attend a homebuyer education course to take out these loans, and you must purchase a single-family home.
Government-backed loans are also funded by private lenders, but they're 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 loans: 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 lower credit scores 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, and they don’t require a down payment. 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
For example, if you are a California resident, you may qualify for a California Housing Finance Agency (CalHFA) loan. Borrowers in Michigan can look to the Michigan State Housing Development Authority (MSHDA) for help with down payments and housing education.
Compare mortgage lenders
Buying a house for the first time is an exciting, sometimes overwhelming process, but there are reputable lenders and resources that can help. Each borrower has slightly different requirements that will inform the direction you take and the type of loan you pursue. Research your options and start talking to lenders to find one you feel comfortable with.
|Availability||Minimum credit score||Minimum down payment||Learn more|
|Rocket Mortgage||Nationwide||580 to 620||3% to 5%||Read reviews|
|nbkc bank||Nationwide||Varies||Varies||Read reviews|
|Better Mortgage||Most states||620||3% to 20%||Read reviews|
|Zillow Home Loans||Most states||580 to 680||0% to 3.5%||Read reviews|
|Veterans United||Nationwide||620||0%||Read reviews|
|New American Funding||Most states||580 to 680||0% to 5%||Read reviews|
|AmeriSave||Most states||600 to 620||0% to 3.5%||Read reviews|
Frequently asked questions
- How does the mortgage loan process work?
The first step to
getting a mortgage
is figuring out what type and size of loan you need. Then, you find a lender, which can be a
bank or credit union
or a specialized
mortgage lender or broker.
Once you’ve found a few good options, get pre-qualified. This gives you a strong indicator of what loan terms you’ll be eligible for. From there, you can officially apply. You’ll need to submit various pieces of financial and other documentation, including pay stubs, tax returns and recent bank statements (all pages, all accounts). At this point, your lender will also run a hard credit inquiry to see your credit score and history.
Your preapproval letter is good for 60 to 90 days. Give it to your real estate agent. Now, you can finish your house search and make an offer. If your offer is accepted, work with your agent to put down a deposit toward your closing costs (known as earnest money ).
Usually, your lender will then approve the mortgage, set a closing date and tell you how much money you’ll need. Next, arrange for your down payment and closing costs to be paid — usually through a bank wire or cashier’s check via an escrow account.
Before closing, there will be a home inspection, title search and appraisal. You will also set up a homeowners insurance policy. Depending on where you live, you might also need to get flood insurance.
Finally, show up to the closing, review the documents closely, ask any questions you have, and, when ready, sign your paperwork. Eventually, you will also make your property tax and home insurance payments into an escrow account.
- How do I know how much house I can afford?
- It depends on several factors, including your regular income and existing debt. Use our online tool to calculate how much house you can afford.
- Can I get a home loan with bad credit?
- Yes, it’s possible to get a mortgage with less-than-excellent credit — check out our guide to find the best bad credit home loans for more information.
- How do I know I’m ready to buy a house?
There’s no official point when you’re 100% “ready” to buy a house. Take the time to set up a budget for yourself. Here are some signs you could be prepared:
- You have a healthy, steady income and little debt (especially little to no credit card debt).
- You’ve worked hard to create a strong credit score and history.
- You have enough saved for a down payment.
- You have some extra money set aside for closing costs.
- You want to settle into a more permanent location (yes, you can move, but buying a home is more permanent than renting).
- You’re ready, willing and able to take on the responsibilities of homeownership (such as maintenance and taxes).
Estimate how much of a monthly payment you’ll have. Set aside money for taxes, insurance and the estimated utility costs. Put those funds aside for a few months. Do you have enough flexibility to continue to meet other debt obligations? If so, you may be ready.
To choose our top lenders for first-time homebuyers, the ConsumerAffairs Research Team started with a list of 60 mortgage companies. First, we eliminated lenders with an overall customer satisfaction rating below 3.5 stars on our site, leaving 40. We also required companies to have at least twice as many 5-star reviews as 1-star reviews, leaving 21. In total, we analyzed 6,245 verified reviews from the last year (Dec. 8, 2020, through Dec. 8, 2021).
We then compared loan options and programs designed for first-time buyers, including FHA programs and down payment assistance.
To make our final selections, we gave preference to those that display current rates on their websites.
Once we narrowed it down to the top seven lenders for first-time buyers, we graded each on availability, online reputation and digital loan features. Scores were weighted similarly to a grade-point average. The companies appear in descending order based on this average.
- 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.
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