We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.
How We Make Money
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories, except where prohibited by law for our mortgage, home equity and other home lending products. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.
Erik J. Martin is a Chicago area-based freelance writer/editor whose articles have been featured in AARP The Magazine, Reader's Digest, The Costco Connection, The Motley Fool and other publications. He often writes on topics related to real estate, business, technology, health care, insurance and entertainment.
Suzanne De Vita is a senior editor on Bankrate’s Home Lending team, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters.
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict
,
this post may contain references to products from our partners. Here's an explanation for
.
The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices.
We’ve maintained this reputation for over four decades by demystifying the financial decision-making
process and giving people confidence in which actions to take next.
Bankrate follows a strict editorial policy,
so you can trust that we’re putting your interests first. All of our content is authored by
highly qualified professionals and edited by
subject matter experts,
who ensure everything we publish is objective, accurate and trustworthy.
Our mortgage reporters and editors focus on the points consumers care about most — the latest rates, the best lenders, navigating the homebuying process, refinancing your mortgage and more — so you can feel confident when you make decisions as a homebuyer and a homeowner.
Editorial integrity
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.
Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.
Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information.
How we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.
Bankrate follows a strict
editorial policy, so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers.
We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money.
Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories, except where prohibited by law for our mortgage, home equity and other home lending products. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service.
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 2023.
Best mortgage lenders for first-time homebuyers
Lender
Credit requirements
Down payment minimum
Bankrate review
Homefinity
620 for conventional loans; 600 or higher for FHA loans and VA loans (can be lower in some cases)
31 states (not available in Alaska, California, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Dakota, Oregon, Rhode Island, South Dakota, Vermont, Washington and Wisconsin)
How to choose a 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.
First-time homebuyer FAQ
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.
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.
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.
Many banks offer mortgages — you might want to start with yours to see if there are any special discounts on rates or fees for banking customers. Beyond that, most credit unions help with home financing, provided you’re a member. There are also independent mortgage lenders, including online-only companies. The latter might offer faster approval times or other conveniences. When you’re ready to make offers on homes, get quotes from at least three lenders. Compare the annual percentage rate (APR), which includes the interest rate plus fees and points.
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 evaluated lenders based on several criteria, including affordability (APR, discounts and/or incentives); availability (approval/closing timelines, loan products); and experience (application process, customer service).
Erik J. Martin is a Chicago area-based freelance writer/editor whose articles have been featured in AARP The Magazine, Reader's Digest, The Costco Connection, The Motley Fool and other publications. He often writes on topics related to real estate, business, technology, health care, insurance and entertainment.
Suzanne De Vita is a senior editor on Bankrate’s Home Lending team, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters.
