Best mortgage lenders for first-time homebuyers in 2024
With so many mortgage lenders out there, it can be challenging to know where to start, especially if you’re a first-time homebuyer. Bankrate looked closely at several key criteria to help narrow down the top mortgage lenders for first-timers, including first-time buyer and low-down payment loans and down payment assistance, as well as other aspects that can help you navigate the homebuying process. Here is our guide to the best mortgage lenders for first-time homebuyers in 2024.
Best mortgage lenders for first-time homebuyers
Lender | Credit requirements | Down payment minimum | Bankrate Score |
|---|---|---|---|
PenFed Credit Union | 650 for conventional loans, 700 for jumbo loans, 620 for FHA loans | 3% for conventional loans, 3.5% for FHA loans, none for VA loans | 4.7 |
Veterans United Home Loans | 620 for conventional and VA loans | 3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans | 4.9 |
U.S. Bank | 620 for conventional loans, 740 for jumbo loans | 5% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans | 4.8 |
Old National Bank | 620 for conventional loans, 640 for FHA loans, 680 for VA loans | Undisclosed | 4.6 |
Wells Fargo | 620 for conventional loans | 3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans | 4.8 |
Better | 620 for conventional loans, 580 for FHA loans | 3% for conventional loans, 3.5% for FHA loans, none for VA loans | 4.6 |
Mr. Cooper | 620 for conventional loans, 580 for FHA loans, 600 for VA loans | 3% for conventional loans, 3.5% for FHA loans, none for VA loans | 4.6 |
Rocket Mortgage | 620 for conventional loans, 680 for jumbo loans, 580 for FHA and VA loans | 3% for conventional loans, 10%-15% for jumbo loans, 3.5 for FHA loans, none for VA loans | 4.6 |
PenFed Credit Union
Learn morein our Bankrate review
Lender details
Availability: All U.S. states
Loans offered: Conventional, jumbo, FHA, VA
Credit requirements: 650 for conventional loans, 700 for jumbo loans, 620 for FHA loans
Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA loans
Where to find: Branch locations and online
Pros and cons
Green circle with a checkmark inside Pros
No lender fees; offers lender credits up to $2,500
Red circle with an X inside Cons
Higher minimum credit score requirements; no USDA loans
Veterans United Home Loans
Learn morein our Bankrate review
Lender details
Availability: All U.S. states
Loans offered: Conventional, jumbo, FHA, VA, USDA
Credit requirements: 620 for conventional and VA loans
Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans
Where to find: Branch locations and online
Pros and cons
Green circle with a checkmark inside Pros
Specializes in VA loans; 24/7 customer service over the phone; free credit counseling for service members
Red circle with an X inside Cons
Doesn’t offer HELOCs or home equity loans; limited number of branches
U.S. Bank
Learn morein our Bankrate review
Lender details
Availability: All U.S. states
Loans offered: Conventional, jumbo, FHA, VA, USDA
Credit requirements: 620 for conventional loans, 740 for jumbo loans
Down payment minimum: 5% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans
Where to find: Branch locations and online
Pros and cons
Green circle with a checkmark inside Pros
Several down payment and closing cost assistance programs; discounts for banking customers
Red circle with an X inside Cons
Requires a higher credit score to qualify; refinance timeline can be lengthy
Old National Bank
Learn morein our Bankrate review
Lender details
Availability: All U.S. states
Loans offered: Conventional, jumbo, FHA, VA, USDA
Credit requirements: 620 for conventional loans, 640 for FHA loans, 680 for VA loans
Down payment minimum: Undisclosed
Where to find: Branch locations and online
Pros and cons
Green circle with a checkmark inside Pros
Branches plus online banking; first-time homebuyer and down payment/closing cost assistance programs in some states; special loan programs for first responders, professors and physicians
Red circle with an X inside Cons
Branch locations limited to five states
Wells Fargo
Learn morein our Bankrate review
Lender details
Availability: All U.S. states
Loans offered: Conventional, FHA, VA
Credit requirements: 620 for conventional loans, 580 for FHA loans
Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA loans
Where to find: Online
Pros and cons
Green circle with a checkmark inside Pros
Completely digital process, with daily online rates, three-minute preapprovals and hybrid closings; no fees; Price Guarantee matches or beats competitor offers
Red circle with an X inside Cons
No branch locations; no home equity loans or USDA loans
Better
Learn morein our Bankrate review
Lender details
Availability: All U.S. states
Loans offered: Conventional, FHA, VA
Credit requirements: 620 for conventional loans, 580 for FHA loans
Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA loans
Where to find: Online
Pros and cons
Green circle with a checkmark inside Pros
Completely digital process, with daily online rates, three-minute preapprovals and hybrid closings; no fees; Price Guarantee matches or beats competitor offers
Red circle with an X inside Cons
No branch locations; no home equity loans or USDA loans
Mr. Cooper
Learn morein our Bankrate review
Lender details
Availability: All U.S. states
Loans offered: Conventional, FHA, VA
Credit requirements: 620 for conventional loans, 580 for FHA loans, 600 for VA loans
Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA loans
Where to find: Online
Pros and cons
Green circle with a checkmark inside Pros
Available in all states, Puerto Rico and the U.S. Virgin Islands; app to track loan status and make payments
Red circle with an X inside Cons
No branch locations; no USDA loans
Rocket Mortgage
Learn morein our Bankrate review
Lender details
Availability: All U.S. states
Loans offered: Conventional, jumbo, FHA, VA
Credit requirements: 620 for conventional loans, 680 for jumbo loans, 580 for FHA and VA loans
Down payment minimum: 3% for conventional loans, 10%-15% for jumbo loans, 3.5% for FHA loans, none for VA loans
Where to find: Online
Pros and cons
Green circle with a checkmark inside Pros
Superior customer service, including chat and screen-sharing; up to $10,000 rebate for buying and selling through affiliate Rocket Homes
Red circle with an X inside Cons
No branch locations; no USDA loans
How to find the best mortgage lender as a first-time homebuyer
There are several different kinds of mortgage lenders you might come across in your search for a loan, including banks, credit unions and independent and non-depository institutions. You might also encounter mortgage brokers, who can help you uncover loan offers from a variety of lenders.
As you look for a lender, consider your goals and what you might value in your experience getting a mortgage. What kind of loan are you looking for? How long do you plan to stay in the area? Would you feel better with 24/7 support? Do you need homebuyer education? All of these questions and more can help you narrow down your choices.
Once you have a short list, shop around and compare mortgage offers before committing to one. Lenders include the APR (annual percentage rate) and interest rate on an offer, but you’ll really want to consider the APR, which reflects the actual cost of the mortgage. In general, the lower the APR, the cheaper the loan will be.
Learn more:Compare current mortgage rates
FAQ
Who classifies as a first-time homebuyer?
A first-time homebuyer is anyone who hasn’t bought a home previously. That might mean you’re a renter, or you’re moving from your family home to your first home. To qualify for a first-time homebuyer loan, however, it doesn’t have to genuinely be your first time purchasing a property. For these types of mortgages, you’re classified as a first-time homebuyer if you haven’t bought a home in the past three years.
What are first-time homebuyer programs?
A first-time homebuyer program is a mortgage loan geared toward first-time homebuyers, typically with a lower interest rate, lower down payment requirement and other ways to save, such as lower mortgage insurance premiums. There are many different kinds of first-time buyer programs, including 3 percent down conventional loans, 3.5 percent down FHA loans and no-down payment loans for eligible military members or buyers in rural areas.
What are first-time homebuyer grants?
If you’re a first-time homebuyer and lack funds for a down payment or closing costs, you might be eligible for a first-time homebuyer grant. Grants are a one-time lump sum that often don’t have to be repaid if you stay in the home for a certain period of time or meet other criteria.
How much do I need to save for a down payment as a first-time homebuyer?
It varies widely. If you have a credit score of at least 620, for example, you might qualify for a conventional loan with a down payment as low as 3 percent of the home’s purchase price. If your credit isn’t that great, you might opt to put down slightly more, 3.5 percent, for an FHA loan. If you’re in the military or buying a home in a rural area, you might not need to set aside anything for a down payment. What’s more: In 2023, some lenders introduced 1 percent down mortgages, which come with free grants so that you only need to put down 1 percent. There’s also income-based down payment assistance, which could cover some or all of yours. Ultimately, how much you should save depends on your homebuying budget, your credit, income and many other factors.
Methodology
To determine the best mortgage lenders for first-time homebuyers, Bankrate periodically evaluates more than 80 lenders for factors relating to affordability, availability and borrower experience, assigning each a Bankrate Score out of five stars. The best mortgage lenders for first-time homebuyers generally have a Bankrate Score of 4 stars or higher. Learn more about our methodology.
