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Compare The Best Mortgages for First-Time Home Buyers

Choose the best mortgage lender for first-time home buyers based on your needs. Even if it's your first home, a mortgage can seem overwhelming, as it's a long-term investment.

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Compare The Top Lenders

Editor's Choice

Quicken Loans

A+ Customer Satisfaction

    • 35 years of experience
    • Fully automated, online process
    • Pre-approval available
View details

Key Facts

  • Mortgage Types: Purchase, Refinance, Jumbo, Fixed, Adjustable, FHA, VA, USDA
  • Min. Credit Score: 620
  • APR set by lender
  • NMLS#: 3030
Read Quicken Loans Review »

Pros:

  • Rate Lock
  • Online application process
  • Good reputation for customer satisfaction
  • Pre-approval available

Cons:

  • Fees could potentially be high
  • No physical branches available
Low Rates

AmeriSave Mortgage

Make Your Offer with Confidence

    • Lock your rate for 90 days with ‘Lock & Shop’
    • ‘Certified Closing Promise’ – close your loan or get $1500
    • Customized rate quote in < 3 mins
View details

Key Facts

  • Mortgage types: Purchase, refinance, adjustable, fixed, jumbo, FHA, VA, and USD.
  • Minimum credit score: 600.
  • NMLS#: 1168
Read AmeriSave Mortgage Review »

Pros

  • Easy online application process
  • Diverse loan options available
  • Transparent information on their website
  • 3% minimum down payment available
  • Accurate quotes, not estimates

Cons

  • $500 application fee
  • Offers no program for first-time homebuyers

Rocket Mortgage

Mortgage Experts Available 24/7

    • Apply 24/7 through the mobile app
    • Get pre-approved & lock your rate in minutes
    • Award-winning customer service
View details

Key Facts

  • Mortgage Types: finance, refinance, adjustable-rate, fixed-rate
  • Min. Credit Score: 580
  • APR dependent on credit score
  • NMLS#: 3030
Read Rocket Mortgage Review »

Pros

  • Closing costs rolled into loan automatically
  • Smartphone app
  • Syncs with your bank account for easy application process
  • 98% of financial institutions supported for digital asset verification

Cons 

  • Can’t have face-to-face interaction with loan officer; online only
  • No alternative credit data considered

New American Funding

Your Mortgage, Your Terms

    • Historically Low Rates
    • A+ BBB Rating
    • Offers low-down-payment loans
View details

Key Facts

  • Mortgage Types: Variety of home purchase, equity, & refinance
  • Min. Credit Score: 580/620
  • APR dependent on loan type
  • NMLS#: 6606
Read New American Funding Review »

Pros:

  • Manual underwriting available to evaluate credit
  • One of the few non-bank lenders offering equity lending and reverse mortgages
  • Can participate in the entire process online
  • English and Spanish-speaking loan officers available

Cons:

  • No mortgages in Hawaii or New York
  • Doesn’t work with down payment assistance programs in all states

Mutual of Omaha

More than a century of experience

    • Competitive refinancing rates
    • Relatively fast funding timeline
    • Efficient application process
View details

Key Facts

  • Mortgage Types: mortgage refinance
  • Min. Credit Score: 620
  • APR: 3.33%-3.953%
  • NMLS#: 1025894
Read Mutual of Omaha Review »

Pros:

  • 100+ years of experience
  • Wide range of payment term lengths
  • Streamlined application process
  • Access to up-to-date mortgage rates

Cons:

  • Not available in West Virginia or New York
  • Physical locations in only 24 states

 

Current Mortgage Rates for 03/02/23

Mortgage Interest Rate
30-year fixed-rate 5.703%
20-year fixed-rate 5.349%
15-year fixed-rate 4.885%
10-year fixed-rate 4.949%
7-year ARM 5.655%
5-year ARM 5.508%

 

Mortgage Calculator

Home price

$

Down payment

$

%

Length of loan

Interest rate

%

Homeowner's insurance

$

Property tax

$

HOA fees

$

$1,337.65

monthly payment

 

Buying a Home for the First Time Explained

The process of buying your first house is an exciting one, but it is also very daunting. It will likely be the biggest financial commitment you have made up to that point.

There will often be hundreds of thousands of dollars in debt that you need to purchase the home, Therefore, you want to take the time needed to find the ideal mortgage lenders for your needs as a first-time homebuyer.

Many variables are associated with buying a house for the first time. As you do not have direct experience buying a house in the past, you will need to consider many different variables for the first time.

Naturally, you will need to figure out in what region you want to live and what you can afford. Then it would help if you prepared your credit to get as good of an interest rate on your mortgage as possible. You will need to have enough savings to make the down payment.

Once you get pre-approval from a mortgage broker, you can start looking around at potential homes to purchase, and you need to compare the different lenders to see which one offers the best terms for your situation. Many top-tier mortgage lenders look after first-time buyers, so it is about narrowing down the different options.

Top 3 online mortgage lenders

Types of Mortgages

If you are a first-time home buyer, there are usually two major types of mortgages that you will have available for you to consider. These will be government-backed loans and those that are conventional loans. If you go for a government-backed loan, this means that the government ensures it, and it takes the risk away from the lender in case there is a default on this loan by the borrower.

Naturally, a conventional type of loan will carry more risk for the lender as the government does not ensure this loan. Therefore, conventional mortgages will often have larger interest rates, fees, and even down payments. Conventional loans are very straightforward as they will be nice and flexible for first-time buyers. However, there are a few different types of government-backed mortgages that you might need to be aware of:

VA Loans

VA loans are usually dedicated to people who are part of the military and their families. There are numerous advantages to this type of mortgage, including having a $0 down payment and no PMI once the eligibility requirements have been met.

HUD/FHA Loans

There are loans whereby the borrower is required to make a down payment of at least 3.5% and have a FICO score of 580 or greater. You can still get this loan type if your FICO score is below this level, but the minimum required down payment is going to be larger.

USDA Loans

USDA loans are focused on people looking to buy a home in a rural area, which will be guaranteed by the US Department of Agriculture (USDA). People can apply with low incomes and still get the ability to borrow funds to buy, build, or renovate a home in certain areas of the country. All the closing costs and mortgage expenses will be combined into the loan to keep everything neat and tidy.

How to get a first-time home buyer mortgage and the best mortgage rates

Get pre-approval or pre-qualification

If you get pre-approval from a lender for a mortgage, you can get a letter that will often include the loan amount. While this letter does not guarantee you a mortgage because it is based on certain assumptions, it allows you to start shopping for potential homes. This letter can be shown to sellers to show that you have access to the funds in principle, being a form of good faith.

If you are chosen to be the buyer of the house, then it is likely you will then have access to these funds. Even if you get this letter, it does not mean you will be tied down to going with this lender. You can still compare different lenders and get access to the best rates possible.

Getting the necessary documents together

When you make an offer on a home that is accepted, you need to get all of the necessary documents together and present them to the lender. Some of these forms include:

  • Recent pay stubs and W-2 forms
  • 1099s for business owners
  • Information regarding outlying debts
  • List of different assets
  • Tax returns from the most recent two years

Good Faith Estimate and Lending Disclosure

Within three days of getting approval for a mortgage loan, you will get a Good Faith Estimate (GFE) from the lender, which will showcase all of the costs associated with the loan. Then the Truth in Lending disclosure will showcase info about the costs you need to pay and the other key terms of this loan.

Choosing the Best Mortgage Lender

You can get a mortgage these days as a first-time buyer in many different ways. The likes of banks, credit unions, and online lenders will all cater to your needs. Before shopping around, you must know what type of mortgage best suits your situation.

You also want to ensure that you only look at lenders with plenty of professional experience, a good track record, and complete transparency regarding fees. There will also be different requirements for different lenders, which is something else that has to be factored into the selection process.

Traditional Mortgage Lenders vs Online Lenders

Traditionally, people would get a mortgage from a bank and have to submit documents in person. However, online lenders allow you to get a much more efficient experience by applying entirely online. This allows you also to shop around much more easily than if you were looking to deal with physical banking branches.

Therefore, you can often get the best deal possible for your mortgage. This is especially important as a first-time homebuyer, as you might want to minimize your outgoings as much as possible.