BEST OF

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

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.

NerdWalletNovember 12, 2020
Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own.

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

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at New American

New American Funding: NMLS#6606

4.5

NerdWallet rating 
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Min. Credit Score

620

Min. Down Payment

3%

National / Regional

National

at New American

Why we like it

Good for: borrowers who need to be evaluated on the basis of nontraditional credit and those interested in various down payment assistance programs.

Pros

  • Uses manual underwriting to evaluate creditworthiness.

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

Cons

  • Mortgage rates offered to borrowers are higher than the government-reported median of all lenders.

Read Full Review
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at Quicken Loans

Quicken Loans: NMLS#3030

4.5

NerdWallet rating 
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Min. Credit Score

620

Min. Down Payment

3%

at Quicken Loans

Why we like it

Good for: borrowers looking for just about all of 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 many working Americans.

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

  • Provides a wide variety of loan types, including renovation loans and all government-backed mortgage products.

Cons

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

  • Quicken's lender fees can be stout and they don't offset those fees with particularly low mortgage rates.

Read Full Review
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at NBKC Bank

NBKC: NMLS#409631

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

5.0

NerdWallet rating 
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Min. Credit Score

620

Min. Down Payment

3%

at NBKC Bank

Why we like it

Good for: borrowers with solid credit who want to pay low fees and get an online experience with phone support. VA loans are an emphasis.

Pros

  • Offers low rates and fees when compared with other lenders.

  • Extends full online capabilities, from application to loan tracking.

  • Displays customized rates, with fee estimates, without requiring contact information.

Cons

  • Equity lines and construction loans are available only in the Kansas City metro area.

  • Doesn’t offer renovation loans.

Read Full Review
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at Chase

Chase: NMLS#399798

4.5

NerdWallet rating 
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Min. Credit Score

620

Min. Down Payment

3%

at Chase

Why we like it

Good for: borrowers who want a name-brand bank, with offices in more than half the states, that charges lower rates and fees than many other lenders.

Pros

  • Allows electronic submission and tracking of loan documents.

  • Carries a wide variety of mortgage types and products.

  • Generally offers good rates and charges reasonable fees.

Cons

  • Doesn't offer home improvement loans, such as FHA 203(k) and HomeStyle.

  • You have to speak with a home loan advisor to complete the application.

Read Full Review
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at SoFi

SoFi: NMLS#1484615

3.5

NerdWallet rating 
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Min. Credit Score

660

Min. Down Payment

10%

at SoFi

Why we like it

Good for: borrowers seeking an entirely digital application process for conventional purchase mortgages or refinancing.

Pros

  • Provides an entirely digital mortgage application.

  • May consider vested restricted stock units as income.

  • SoFi members may qualify for a $500 discount on mortgage fees.

Cons

  • Does not offer government-backed loans, such as FHA or VA.

  • Requires users to create an account to see customized mortgage rates.

  • SoFi mortgages are unavailable in eight states.

Read Full Review
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Read review

Alliant: NMLS#197185

4.5

NerdWallet rating 
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National / Regional

National

Min. Down Payment

3%

Read review

Why we like it

Good for: for first-time home buyers who want to avoid mortgage insurance and prefer a digital application process.

Pros

  • Low- or no-down-payment options with no mortgage insurance.

  • Mortgages are available for non-warrantable condominiums.

Cons

  • Does not offer government-backed mortgages, like FHA and VA loans.

  • Does not offer renovation mortgages.

Read Full Review
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Read review

Citibank: NMLS#412915

5.0

NerdWallet rating 
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National / Regional

National

Min. Down Payment

3%

Read review

Why we like it

Good for: Borrowers wanting to compare mortgage rates online for a variety of loan options.

Pros

  • Offers a wide variety of loan options, including low-down-payment mortgages and jumbo mortgages.

  • Provides customizable mortgage rates on its website.

  • Offers low rates and fees compared to other lenders.

Cons

  • Charges a mortgage application fee.

  • Requires help from a mortgage loan officer to complete the loan application online.

Read Full Review
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Read review

Bank of America: NMLS#399802

5.0

NerdWallet rating 
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Min. Credit Score

620

Min. Down Payment

3%

Read review

Why we like it

Good for: first-time home buyers looking for low-down-payment options and existing customers who may get a discount on fees.

Pros

  • Allows borrowers to apply entirely online.

  • Offers down payment and closing cost assistance programs.

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

Cons

  • Does not offer renovation loans.

Read Full Review
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Read review

Navy Federal: NMLS#399807

4.5

NerdWallet rating 
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National / Regional

National

Min. Down Payment

0%

Read review

Why we like it

Good for: Military members and their families looking for low-down-payment mortgages.

Pros

  • Offers a wide range of affordable mortgage products designed for military members.

  • Has an online application for preapproval.

  • Offers low rates compared with most lenders.

Cons

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

  • Credit union membership is limited to veterans and current military members, their families, and certain federal employees, retirees and contractors.

Read Full Review
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Read review

SunTrust: NMLS#2915

5.0

NerdWallet rating 
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Min. Credit Score

620

Min. Down Payment

3%

Read review

Why we like it

Good for: first-time home buyers, doctors and other borrowers interested in low-down-payment mortgage options.

Pros

  • Offers a wide variety of loan options, including special programs for doctors, entrepreneurs and other professionals.

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

  • Sample rates and fees are easy to find on the website.

Cons

  • Customized rates aren't available online without starting an application.

  • Branches are limited mostly to the Southeast.

Read Full Review
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Read review

Flagstar: NMLS#417490

5.0

NerdWallet rating 
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Min. Credit Score

620

Min. Down Payment

3%

Read review

Why we like it

Good for borrowers who want a wide range of choices — not only among mortgage products, but also in the channel they prefer, whether a branch, online or on the phone.

Pros

  • Offers a wide range of loan types and products, including FHA, VA and USDA.

  • Has a full suite of online conveniences.

  • Does well with rate transparency, and monthly payment estimates add mortgage insurance, when applicable.

Cons

  • Home equity lending is geographically limited.

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 November 12, 2020

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 2020