BEST OF
11 Best Mortgage Lenders for First-Time Home Buyers in 2021
If you're a first-time home buyer, we'll help you choose the best lenders of 2021 for you. We've assembled lenders that cater to first-time home buyers with low down payments, grant programs and educational materials.
For first-time home buyers, finding the right mortgage is crucial. It can also be a big challenge.
You want to work with a lender that can give you the best rate, the right term and the lowest closing costs as quickly and efficiently as possible. Finding that lender — the one that will help you close your loan as quickly and efficiently as possible so you can move into your new home — is essential.
NerdWallet has picked some of the best mortgage lenders for first-time home buyers in a variety of categories so you can quickly decide which one is right for you.
For first-time home buyers, finding the right mortgage is crucial. It can also be a big challenge.
You want to work with a lender that can give you the best rate, the right term and the lowest closing costs as quickly and efficiently as possible. Finding that lender — the one that will help you close your loan as quickly and efficiently as possible so you can move into your new home — is essential.
NerdWallet has picked some of the best mortgage lenders for first-time home buyers in a variety of categories so you can quickly decide which one is right for you.
Summary of Best Mortgage Lenders for First-Time Home Buyers in 2021
| Lender | NerdWallet Rating | Minimum Credit Score | Minimum Down Payment | Learn More |
|---|---|---|---|---|
Best for conventional loans | 620 | 3% | at Ally Bank | |
Best for online experience | 620 | 3% | at Quicken Loans | |
Best for non-traditional credit | 620 | 3% | at New American Funding | |
Best for online experience | 620 | 3% | at NBKC | |
Best for first-time home buyers overall | 620 | 3% | at Chase | |
Best for first-time home buyers overall | 620 | 3% | at NASB | |
Best for low down payments | N/A | 3% | Read review | |
Best for assistance programs | 620 | 3% | Read review | |
Best for veterans | N/A | 0% | Read review | |
Best for low down payments | 620 | 3% | Read review | |
Best for low down payments | 620 | 3% | Read review |
at Ally Bank
Ally Bank: NMLS#181005
Min. Credit Score
Min. Down Payment
at Ally Bank
at Quicken Loans
Quicken Loans: NMLS#3030
Min. Credit Score
Min. Down Payment
at Quicken Loans
at New American Funding
New American Funding: NMLS#6606
Min. Credit Score
Min. Down Payment
at New American Funding
at NBKC
NBKC: NMLS#409631
Min. Credit Score
Min. Down Payment
at NBKC
at Chase
Chase: NMLS#399798
Min. Credit Score
Min. Down Payment
at Chase
at NASB
NASB: NMLS#400039
Min. Credit Score
Min. Down Payment
at NASB
Alliant: NMLS#197185
National / Regional
Min. Down Payment
Bank of America: NMLS#399802
Min. Credit Score
Min. Down Payment
Navy Federal: NMLS#399807
National / Regional
Min. Down Payment
SunTrust (Truist): NMLS#2915
Min. Credit Score
Min. Down Payment
Flagstar: NMLS#417490
Min. Credit Score
Min. Down Payment
First-time home buyer mortgage FAQ
What type of loan is best for a first-time home buyer?
The best mortgage for you, as a first-time home buyer, is the loan that you are most qualified for. And that depends on a number of factors, including your credit score.
With a credit score of at least 580, you may find that a loan backed by the FHA is your best option. With an FHA loan, you may qualify for a down payment as low as 3.5%, and approval standards are a bit more relaxed. With a credit score around 620 or higher, a conventional loan might be a better option, and could deliver an even lower required down payment of 3%.
When you know your credit score, you can determine the loan options you’ll have. NerdWallet's credit score to buy a house calculator is an easy way to see what your best loan choices may be.
What programs are available for first-time home buyers?
A large number of grants, special loans and down payment assistance programs are available to borrowers looking to buy their first home. These first-time home buyer programs are offered by agencies in the state where you live.
There are often income and home purchase price limits, but the programs are dedicated to helping buyers get that first home that they want so much.
And more good news: You'll often qualify as a first-time home buyer if you haven't owned your primary residence in the past three years.
How do I choose a mortgage lender?
Once you have an idea of the type of loan that you're looking for (see above), finding the right lender may be easier than you think — especially when you decide to compare at least three lenders and let them compete for your business.
Shopping multiple lenders relieves a bit of the stress, too. If you just don't click with one lender, another may be easy and accommodating. One lender may seem stiff and demanding, another is working hard to make a good loan offer.
And it's likely one lender's mortgage package will rise above the others — with a lower rate and lower fees.
What is the easiest home loan for a first-time home buyer to get?
The loan program that's easiest to qualify for is an FHA-backed loan. That's because FHA loan requirements allow a lower credit score and less stringent debt-to-income guidelines than conventional loans.
But that lower bar comes at a cost. You'll have to pay a fee that protects the lender, called mortgage insurance. In most cases that means you'll pay an upfront premium as well as a monthly fee for the life of the loan.
However, FHA mortgages are an important loan option to consider. For over 85 years, the Federal Housing Administration has helped millions of new buyers get into their first home. And you'll get a favorable interest rate on an FHA loan — sometimes even lower than on a conventional loan.
More from NerdWallet Mortgage calculator First-time home buyer tips Tips for finding the best mortgage lender
Last updated on January 2, 2021
Methodology
NerdWallet's star ratings for mortgage lenders are awarded based on our evaluation of the products and services each lender offers to consumers who are actively shopping for the best mortgage. The five key areas we evaluated include the variety of loan types and products offered, online conveniences, online mortgage rate information, and the rate spread and origination fee lenders reported in the latest available Home Mortgage Disclosure Act data. To ensure consistency, our ratings are reviewed by multiple people on the NerdWallet Mortgages team.
To recap our selections...
NerdWallet's Best Mortgage Lenders for First-Time Home Buyers in 2021
- Ally Bank: Best for conventional loans
- Quicken Loans: Best for online experience
- New American Funding: Best for non-traditional credit
- NBKC: Best for online experience
- Chase: Best for first-time home buyers overall
- NASB: Best for first-time home buyers overall
- Alliant: Best for low down payments
- Bank of America: Best for assistance programs
- Navy Federal: Best for veterans
- SunTrust (Truist): Best for low down payments
- Flagstar: Best for low down payments
