Best Mortgage Lenders for First-Time Buyers

Top10.com StaffByTop10.com StaffOct. 24, 2019
Enjoy Your Own Home With the Best Mortgages for First Time Borrowers
If you’ve decided it's time for a first-time home buyer mortgage and you fit the Department of Housing and Urban Development’s (HUD) definition of a first-time home buyer, many of the best mortgage lenders will offer you competitive terms on a home loan.

First time home buyers are typically younger than those looking to purchase their second or third home. Because of their age, first-timers usually have less funds for a down payment and might also have student debts, poor credit, or financial worries that make it hard to finance a purchase. This makes it important to examine the best mortgages for first time buyers specifically. 

Top First-Time Home Buyer Lenders Compared & Explained

Lender
Customer Service
Credit Score
Get an Offer
8am to 9pm by phone, 24/7 online form submission
620+
7am to midnight by phone, 24/7 online chat
620+
3. Better
Schedule a call online
620+
View Rates
Email or call, anytime
580+
5. Sofi
4am to 9pm PT by phone or email 24/7
580+

1. LendingTree

  • Dedicated FHA loan search
  • Lowest rates on the market – by city
  • See results instantly

LendingTree is another online marketplace that enables a comparison between different lenders. It has a specially dedicated search tool for FHA loans, which allows the user to see up-to-date interest rates for the portal’s top-rated FHA lenders. Users can search for FHA loans by city.Users can also conduct a quick, free search for 30-year, 15-year, and other conventional fixed-rate loans. Conduct a simple search by city, or fill in advanced parameters to find the best rates and fees from the perspective of a first-time buyer.

Best for: National loan programs and financial assistance for first-time buyers

Biggest perk: Instant search results by city

LendingTree LendingTree View Rates

2. Quicken Loans

  • Down payments of as low as 3%
  • Minimum credit score of 620 for conventional mortgages
  • Offers FHA home loans

Quicken Loans is a well-known mortgage lender making things simple for first-time home buyers with down payments of as low as 3% of the value of your new home. Loan amounts vary from as low as $25,000 to as high as $3 million.Quicken is one of the largest mortgage lenders for first time buyers to offer mortgages under the FHA home-buyer program, which accepts down payments as low as 3.5%. It also offers access to VA loans, which offers military veterans and active service members (who meet certain conditions) better rates and no down payment.

One of the great things about Quicken Loans is that you can apply online through Rocket Mortgage by Quicken Loans. Rocket Mortgage claims to do everything quicker than your average mortgage provider. If you have a lot of questions and would rather talk things over, Quicken Loans’ experts are also available to speak by phone.

Best for: Calculating your budget and monthly payments

Biggest perk: Fast application

Quicken Loans Quicken Loans View Rates

3. Better

  • Available 24/7
  • Instant loan estimate
  • Clear communication and transparency

Better is changing the mortgage industry through technology. Get 3 minute pre-approval with no impact on your credit and take your mortgage with absolutely no application, processing, origination or underwriting fees. Better has an investor matching algorithm, matching your loan with the right investor, saving you money. The entire process for your first-time home mortgage is streamlined, sending you the savings and saving you time. Borrowers save an average of $3500 on transaction costs alone. Better also offers a comprehensive F.A.Q. section and clear rate estimates right on the website. 

Best for: High-tech mortgage borrowing

Biggest perk: No commission or origination fees

View Rates

4. Freedom Mortgage

  • Excellent educational resources
  • Submit application documents digitally
  • Minimum credit score of 620 for conventional mortgages

Freedom Mortgage issues loans for specific needs, including service of first-time buyers’ loans. They offer FHA and VA loans, and provide educational resources for potential borrowers, which is useful for people who are branching into the market.Like other forward-thinking lenders, Freedom Mortgage streamlined their application process, allowing customers to fill out paperwork through its online portal and to submit documents digitally. This lender only requires a minimum credit score of 620 for conventional mortgages, an advantage for young buyers.

Best for: Low interest rates and loans without points for first-time buyers

Biggest perk: Low lender fees

Freedom Mortgage Freedom Mortgage View Rates

5. SoFi

  • As little as 10% down payment

  • 100% digital platform

  • Considers non-traditional incomes

With its all-digital platform and progressive lending model, San Francisco-based SoFi is an ideal match for upwardly mobile professionals looking to buy their first home. Its goal is to forge a “new-school” approach to mortgage lending by making loans more accessible and the process more streamlined. This includes an entirely digital platform that allows members to apply, track, and organize their progress. SoFi considers non-traditional incomes such as RSU (restricted stock options), making it an especially valuable option for self-employed professionals and others who fall just beyond the scope of traditional lenders. It offers loans of up to $3 million dollars with as little as 10% down payments, as well as perks like personal loan officers and community resources to educate and empower its members. 

Best for: Jumbo loans with lower-than-average down payments 

Biggest perk:  Member rate discounts

SoFi SoFi View Rates

HUD First-Time Home Buyer Requirements

  • You (or your spouse) have has not owned a principal residence for at least 3 years
  • You are a single parent who has only owned with a former spouse while married
  • You are a homemaker who has only owned with a spouse, but are no longer financially supported by your spouse
  • You have only owned a principal residence not permanently affixed to a permanent foundation in accordance with applicable regulations
  • You have only owned a property that was not in compliance with state, local or model building codes and which cannot be brought into compliance for less than the cost of constructing a permanent structure

Because of the unique circumstances of first-time home buyers, lenders might offer incentives such as low rates or small down payments. Many lenders offer FHA mortgages, which are home loans insured by the Federal Housing Administration. An FHA home loan requires a down payment of just 3.5% and has flexible requirements and an easier qualification process than a conventional loan. However, it does require that the borrower pay monthly mortgage insurance.

First-Time Homebuyer Programs

There are several programs specifically geared for first-time home buyers, though you are free to use any home purchase loan that you qualify for. 

These programs include:

  • FHA Loans

FHA loans are like many other mortgages and are made by private lenders, such as Quicken Loans. Your FHA loan, unlike a conventional loan, will be guaranteed by the federal government. This means that your lender will consider you, even if you might not qualify for a conventional mortgage. 

  • USDA Loans

This program, run by the U.S. Department of Agriculture, focuses on rural homes and allows 100% financing (which means 0% down payments) to low income borrowers without stable housing. 

  • VA Loans

The U.S. Department of Veterans Affairs helps service members, veterans, and surviving spouses buy homes with full financing. These loans do not require PMI, which can save a bundle. Private lenders can add their own requirements, but generally VA loans are a tremendous benefit for military personnel. 

  • Fannie Mae and Freddie Mac

Both Fannie Mae (the Federal National Mortgage Association, FNMA) and Freddie Mac (the Federal Home Loan Mortgage Corporation, FHLMC) purchase home loans from private lenders, enabling lenders to make more mortgages for borrowers like you. They purchase conventional, FHA, VA and USDA loans and guarantee loans. 

  • Good Neighbor Next Door Programs

This program, originally intended for teachers, now includes law enforcement, EMTs, and firefighters. It's sponsored by HUD and allows 50% discounts on the list price of homes in certain areas. If you qualify, you have to commit to living in the place you are interested in buying for at least 3 years. 

Check out these reviews of the best mortgage lenders to see who can help you realize your dream of buying a home.

Top10.com StaffByTop10.com StaffJun. 18, 2019
Our editorial staff is comprised of writers who are knowledgeable about financial services. We specialize in simplifying the process of choosing the right mortgage lender for your needs.