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11 Best Mortgage Lenders for First-Time Home Buyers in 2020

NerdWalletFebruary 20, 2020

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If you're a first-time home buyer, we'll help you choose the best lenders of 2020 for you. We've assembled lenders that cater to first-time home buyers with low down payments, grant programs and educational materials.

NOTE: Due to the coronavirus outbreak, obtaining a mortgage may be a bit of a challenge. Lenders are dealing with demand and staffing issues. If you can’t pay your current home loan, refer to our mortgage assistance resource. For the latest information on how to cope with financial stress during this emergency, see NerdWallet’s financial guide to COVID-19.

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 2020

LenderNerdWallet Rating Minimum Credit Score Minimum Down PaymentLearn More

NBKC

at NBKC Bank

4.5

/5

Best for: online experience

620

3%

at NBKC Bank

Quicken Loans

at Quicken Loans

4.5

/5

Best for: online experience

620

3%

at Quicken Loans

New American Funding

at New American

4.5

/5

Best for: low credit score

700

3%

at New American

Chase

at Chase

3.5

/5

Best for: face-to-face service

620

3%

at Chase

SoFi

Read review

4.0

/5

Best for: low-down-payment jumbo loans

660

10%

Read review

Vylla

Read review

4.5

/5

Best for: low credit score

620

3%

Read review

Citibank

Read review

4.0

/5

Best for: first-time buyers overall

N/A

3%

Read review

Bank of America

Read review

4.5

/5

Best for: first-time buyers overall

620

3%

Read review

Navy Federal

Read review

4.5

/5

Best for: no credit history

N/A

0%

Read review

SunTrust

Read review

4.0

/5

Best for: low down payments

620

3%

Read review

Flagstar

Read review

4.5

/5

Best for: low down payments

620

3%

Read review
Logo

at NBKC Bank

NBKC: NMLS#409631

Great for first-time home buyers | digital convenience | customer service

Logo

Min. Credit Score

620

Min. Down Payment

3%

at NBKC Bank

Why we like it

Ideal for those seeking an online experience with personal support. NBKC offers a wide range of loans, a mobile app and VA loan expertise.

Pros

  • Complete and track your application online, and sign documents electronically.

  • Free rate locks.

  • No lender fee for VA borrowers.

  • Mobile apps for iOS and Android.

Cons

  • Not the best choice for low-credit-score borrowers.

  • Mortgage origination fee for most borrowers.

  • In-person service available only in the Kansas City area.

Read Full Review
Logo

at Quicken Loans

Quicken Loans: NMLS#3030

Logo

Min. Credit Score

620

Min. Down Payment

3%

at Quicken Loans

Why we like it

Ideal choice for convenience and quick-response customer service. Quicken Loans provides just about all the services your neighborhood lender does — with online convenience.

Pros

  • Quicken Loans couples a fully online application with available mortgage advisors for those who want a human touch.

  • Instantly verifies employment and income for more than 60% of working Americans.

  • Offers custom fixed-rate loan terms that are between eight and 30 years.

  • Provides FHA-backed loans, USDA loans as well as products offered by Freddie Mac and Fannie Mae that require down payments as low as 3%.

Cons

  • Quicken Loans doesn't offer home equity loans or HELOCs.

  • If you’re a “look me in the eye” type of customer, you’re out of luck.

  • Doesn’t consider alternative credit data. It just looks at credit scores and debt-to-income ratios, the way most mortgage lenders always have.

Read Full Review
Logo

at New American

New American Funding: NMLS#6606

Logo

Min. Credit Score

700

Min. Down Payment

3%

National / Regional

National

at New American

Why we like it

Ideal for borrowers who need to be evaluated on the basis of nontraditional credit. New American Funding offers FHA and VA loans, works with down payment assistance programs, and helps borrowers whose credit histories don't fit the mold of traditional banking.

Pros

  • Uses manual underwriting to evaluate creditworthiness.

  • Offers full online mortgage application, rate quotes, document upload and loan tracking.

  • Home equity lending sets it apart from most non-bank lenders.

Cons

  • Services not available in all 50 states.

Read Full Review
Logo

at Chase

Chase: NMLS#399798

Logo

Min. Credit Score

620

Min. Down Payment

3%

at Chase

Why we like it

Ideal for first-time home buyers who want to talk to a loan officer in person or on the phone, and for homeowners who want to refinance their mortgages in 60 days or less. Chase offers a full line of mortgage products and account management tools.

Pros

  • Allows electronic submission and tracking of documents.

  • Existing Chase customers can get discounts.

  • Offers a wide selection of purchase and refinance mortgages.

Cons

  • Charges rate lock, origination and underwriting fees.

  • You have to speak with a mortgage banker to get complete info on products and requirements.

Read Full Review
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Read review

SoFi: NMLS#1484615

Logo

Min. Credit Score

660

Min. Down Payment

10%

Read review

Why we like it

Ideal for young professionals and self-employed borrowers looking for a lender that considers nontraditional income.

Pros

  • Provides an entirely digital mortgage application to make the process easier for borrowers.

  • Considers nontraditional income, such as restricted stock units, and works with self-employed borrowers.

  • Does not require private mortgage insurance for jumbo loans.

Cons

  • Doesn't offer government-backed loans, like FHA or VA.

  • Does not offer home equity loans or HELOCs.

Read Full Review
Logo
Read review

Vylla: NMLS#2600

Logo

Min. Credit Score

620

Min. Down Payment

3%

Read review

Why we like it

Ideal for first-time home buyers or credit-challenged borrowers who may have trouble qualifying for a mortgage.

Pros

  • Low minimum credit score.

  • Online application, loan tracking and document upload.

  • Free rate locks.

Cons

  • No online preapproval.

  • No presence in Massachusetts or North Dakota.

Read Full Review
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Read review

Citibank: NMLS#412915

Logo

National / Regional

National

Min. Down Payment

3%

Read review

Why we like it

Ideal for first-time home buyers or those with weaker credit. Citibank, a large-scale mortgage lender with a full menu of home loan products, offers low down payment options and considers alternative credit data.

Pros

  • Low down payment options.

  • Discounts for Citibank customers.

  • Looks at alternative credit data like rent history and child support payments.

  • Available in all 50 states.

Cons

  • Charges a mortgage application fee.

  • Did not disclose origination fees, which may vary.

  • Can't complete loan online.

Read Full Review
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Read review

Bank of America: NMLS#399802

Logo

Min. Credit Score

620

Min. Down Payment

3%

Read review

Why we like it

Ideal for borrowers who prefer a traditional bank. Bank of America offers a wide array of mortgages and online account management tools. It also has first-time home buyer loans with low down payments and no mandatory mortgage insurance.

Pros

  • Allows borrowers to apply entirely online.

  • Offers down payment and closing cost assistance programs.

  • Accepts alternative credit data for some loan types.

  • May give existing customers a discount on mortgage lender origination fees.

Cons

  • Charges an application fee of $1,170, on average.

  • Has a high volume of consumer complaints, even for a big national bank.

Read Full Review
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Read review

Navy Federal: NMLS#399807

Logo

National / Regional

National

Min. Down Payment

0%

Read review

Why we like it

Ideal for military members and their families. Navy Federal Credit Union offers a wide range of mortgage products, an online application and considers alternative credit data for certain loan types.

Pros

  • Wide range of affordable mortgage products designed for military members.

  • Willing to look at nontraditional credit data, such as rent payments, as part of its credit evaluation for certain products.

  • Online application for preapproval with quick decision.

Cons

  • Website does not provide customized mortgage rates based on credit score or other factors before you apply.

Read Full Review
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Read review

SunTrust: NMLS#2915

Logo

Min. Credit Score

620

Min. Down Payment

3%

Read review

Why we like it

Ideal for borrowers with fair credit or better. SunTrust, now a part of Truist Financial Corp., offers a variety of customer service options.

Pros

  • Offers a complete online suite of mortgage application tools and loan tracking.

  • Provides customer service in its physical locations, online, via chat and by phone.

  • Offers wide variety of loan options, including a loan program for licensed medical professionals

Cons

  • Customized rates not available on website without starting an application.

  • Branches limited to mostly the Southeast.

Read Full Review
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Read review

Flagstar: NMLS#417490

Logo

Min. Credit Score

620

Min. Down Payment

3%

Read review

Why we like it

Ideal for those who appreciate the full-service experience of a leading regional bank. Flagstar offers a full menu of fixed and adjustable home loans and mortgage refinancing, as well as jumbo loans and home equity financing.

Pros

  • Embraces FHA-backed home loans.

  • Offers several types of construction and renovation mortgages.

  • A professional loan package is tailored for the needs of doctors, lawyers, nurse practitioners, airline pilots and certified public accountants.

  • Flagstar reps are familiar with low-down-payment state bond programs for first-time home buyers and income-limited households, as well as the areas that qualify for USDA loans.

  • Offers home equity loans and home equity lines of credit.

Cons

  • Charges an average $1,295 in underwriting and processing fees.

Read Full Review

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.

» MORE: The credit score needed to buy a home

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.

» MORE: How to get down payment assistance

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.

» MORE: 12 first-time home buyer mistakes and how to avoid them

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 February 20, 2020

Methodology

NerdWallet's selection of mortgage lenders for inclusion here was made based on our evaluation of the products and services that lenders offer to consumers who are actively shopping for the best mortgage. The six key areas we evaluated include the loan types and loan products offered, online capabilities, online mortgage rate information, customer service and the number of complaints filed with the Consumer Financial Protection Bureau as a percentage of loans issued. We also awarded lenders up to one bonus star for a unique program or borrower focus that set them apart from other lenders. 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 2020