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When buying your first home, these lenders have some of the best options available.
When buying your first home, you consider where you want to live, the home type you prefer and how many bedrooms the house must have. Equally important is securing financing, as you may not have a substantial amount of cash available for a down payment.
Benzinga has combed through dozens of options to identify the best mortgage lenders for first-time homebuyers. These lenders offer several features that make them excellent choices for first-time homebuyers, including lenient credit and low down payment requirements. Consider these options to make your dream home a reality.
Quick Winners List
Best for Fast Closing: CrossCountry Mortgage
Pros
- Close in as little as 10 days
- Licensed in all 50 states, D.C. and Puerto Rico
- 120 mortgage purchase, refinance and home equity solutions
- Can work with credit scores as low as 500
- Doesn’t require tax returns
Cons
- Doesn’t post rates online
- Underwriting process may take longer
CrossCountry Mortgage is a Cleveland-based lender that offers mortgages nationwide. With CrossCountry, you can choose from conventional, jumbo, non-QM and government-backed FHA, VA or USDA loans. It offers pre-approval to gauge your approval odds, but FHA and VA loans may allow credit scores as low as 500.
CrossCountry offers a FastTrack Credit Approval program that can help close in as few as 10 days after signing a purchase agreement. The lender also offers resources for first-time homebuyers on its website, including a comprehensive guide and various informative articles.
Minimum credit score: 500
Minimum down payment: As little as 1% for first-time homebuyers
Loan types offered: Conventional, FHA, VA, USDA and jumbo loans
States served: All 50 states, D.C. and Puerto Rico
Best for Variety of Options: New American Funding
Pros
- Many loan types and programs available
- Competitive interest rates
- Offers new loan origination and refinancing
- Offers down payment assistance
- Loans can cover closing costs
Cons
- Limited in-person locations
- Origination fees can be high
New American Funding offers a variety of loan products including government-backed mortgages, ITIN loans and construction loans. Some loan types it offers are conventional fixed and adjustable-rate mortgages and home equity, reverse and jumbo loans. It regularly publishes rates on its website for several popular loan programs, giving you an idea of what to expect.
New American Funding accepts credit scores as low as 500. You can also choose from flexible mortgage options, selecting terms ranging from eight to 30 years. The lender also offers down payment assistance programs, which provide up to $6,000 toward purchasing a home. It can also help you make an all-cash offer, making it easier to close on a home.
Minimum credit score: 500
Minimum down payment: 0%
Loan types offered: Conventional, FHA, VA, USDA, jumbo, I CAN and other loan options
States served: All 50 states plus D.C. and Puerto Rico
Best for FHA Loans: Rocket Mortgage (formerly Quicken Loans)
Pros
- Largest FHA lender in the country
- Rate reduction programs may lower your rate
- Closing credit of up to $10,000
- Put as little as 1% down
Cons
- Rates may not be the lowest available
- No in-person locations
- Limited options for borrowers without traditional credit profiles
Rocket Mortgage (formerly known as Quicken Loans) is the largest FHA lender in the country, helping first-time homebuyers with limited funds secure a mortgage. You can use the website or the app to apply for a mortgage and manage your loan application. Rocket Mortgage utilizes a streamlined loan application process, allowing you to track all your progress in one convenient location.
With Rocket Mortgage, you can apply for conventional, refinance, jumbo, fixed, adjustable, FHA, VA and home equity loans. Its Rate Drop Advantage program lets you refinance starting four months after your closing and up to 18 months afterward, waiving certain closing costs. Additionally, Rocket Mortgage offers the convenience of working with loan officers over the phone, allowing for remote interactions if you prefer this approach.
Minimum credit score: 580
Minimum down payment: 1% with ONE+ program
Loan types offered: Conventional, FHA, VA and jumbo loans
States served: All 50 states and D.C.
Best for Lender Comparison: Credible Mortgage
Pros
- Quickly compare lenders with low down payment options
- No fee to use the service
- Comparing lenders won’t affect your credit score
- Provides personalized, prequalified rates
- Your information is kept private
Cons
- Requires creating an account
- Broker, not a direct lender
- Not available in all states
Credible is a lender marketplace that allows you to compare multiple lenders. You’ll enter basic financial information and get quotes on standard home mortgage products from several lenders. Credible offers a free, fully online mortgage broker service that lets you get quotes from online lenders. It features lenders with low down payment options, ideal for first-time homebuyers.
On Credible’s platform, you can find conventional, FHA, VA, jumbo and refinance mortgage offers. You’ll typically need a credit score in the mid-600s, but it varies by lender. It offers straightforward, convenient service, with potentially low interest rates. Credible’s streamlined process eliminates the need to navigate numerous lender websites individually, saving time and effort.
Minimum credit score: Mid-600s (varies by lender)
Minimum down payment: Varies by loan type and lender
Loan types offered: Conventional, FHA, VA, jumbo and refinance loans
States served: All except Missouri and Rhode Island
Best for Credit Monitoring: loanDepot
Pros
- Offers free credit monitoring
- Apply quickly
- Entirely online application
- Direct lender
- “No steering” policy
Cons
- Rates not posted online
- Not all partners can give you the best rates
- No USDA loans
loanDepot is a non-bank lender that offers convenience and efficiency online with the option to visit a branch in person. loanDepot offers fixed-rate and adjustable-rate conventional mortgages. When applying for a mortgage with loanDepot, you can choose from jumbo, FHA or VA loans. LoanDepot also offers 10-, 15-, 20- and 30-year mortgage terms.
Because your credit score is crucial when purchasing and refinancing a home, loanDepot offers a free credit monitoring service called SavvyMoney. You need a credit score of at least 620 to apply for a mortgage with loanDepot, so you can also use the service to determine when you qualify. According to loanDepot, its status as a direct lender allows it to close 50% faster than the industry average.
Minimum credit score: 620
Minimum down payment: 0% (VA); 3.5% (FHA)
Loan types offered: Conventional, FHA, VA and jumbo loans
States served: All 50 states
Best for Borrowers with No Credit Score: Angel Oak Mortgage Solutions
Pros
- Offers various non-QM loan options
- Dedicated loan officers available
- Verify your income with bank statements
- Loans available to foreign nationals and ITIN holders
Cons
- Loans not available in all states
- Higher interest rates than conventional loans
- Requires higher credit score than government-backed options
Angel Oak Mortgage Solutions offers non-QM loan options for borrowers who do not have a traditional credit profile. Bank statement loans are available for up to $4 million with a minimum loan amount of $150,000. Angel Oak is licensed in 45 states and offers competitive mortgage rates and quick closing times. The lender is not currently licensed to operate in New York.
Angel Oak has options for primary residences, second homes and investment properties. It accommodates various property types including single-family homes, townhomes and condominiums. Borrowers with 1099 income and those with sufficient assets may qualify. It also offers HELOCs and P&L loans as well as government programs such as FHA, USDA and VA.
Minimum credit score: 640
Minimum down payment: 5%
Loan types offered: Various non-QM loan programs
States served: All states except Alaska, New York, Vermont, Massachusetts and Connecticut
Best for Quick Application: Rate
Pros
- Approval in as little as 24 hours
- Apply online
- Available in all 50 states and D.C.
- Hundreds of branches nationwide
- Posts rates online
Cons
- Most loans require a 620 credit score
- Some higher fees than other lenders
- No USDA loans
Rate is a major mortgage lender based in Chicago, Illinois. It offers various home loans including conventional fixed-rate and adjustable-rate mortgages (ARMs), jumbo loans, interest-only loans, HELOCs, home renovation loans and government-backed FHA and VA loans. With Rate, you may qualify with a down payment as little as 3%.
Rate offers flexible mortgage application options and accepts non-traditional credit. For instance, you may provide your rent or utility payment history to qualify for a conventional or government-backed loan. It offers various down payment assistance programs, educational resources, mortgage calculators and personalized guidance from dedicated loan officers.
Minimum credit score: 620
Minimum down payment: 3%
Loan types offered: Conventional, FHA, VA and jumbo loans
States served: All 50 states
How Do I Choose a Lender as a First-Time Home Buyer?
To choose a mortgage lender as a first-time homebuyer, you must know what to look for. Generally, you must weigh the type of lender, interest rates and available mortgage products. First, consider the lender type. You can choose from online lenders, physical bank locations, credit unions and other mortgage lenders. Credit unions sometimes offer lower rates to members, but you must compare rates from multiple lenders to find the best options.
Lindsey Harn, a top real estate agent at Christie’s International Real Estate, recommends always shopping local. “Depending on your market, a local lender can make or break getting your offer accepted, Harn says. “A reputable, well respected lender can make a huge difference when it comes to getting your offer accepted.” Harn recommends asking friends and family for referrals, then checking with local banks and credit unions.
Additionally, consider the various types of loans. While many borrowers choose conventional loans, there are also government-backed options such as FHA, VA and USDA loans. These loans often have lower down payments and more flexible credit score requirements.
Rates and Terms
Interest rates and fees are also crucial because they can add up to thousands of dollars over the lifetime of your mortgage. Compare at least three lenders online to find the best available options, taking into account their interest rates and fees. Consider the total required closing costs and other expenses to ensure you have enough for the down payment, plus closing costs, to help ensure you can save more.
While rates are important, they aren’t the only thing that matters, says Ryan Leahy, CEO at MORE Direct Seller Financing. “You want to find the best financing solution and option that works for your real life, through the entire process,” Leahy says. “For first time buyers, look for lenders or seller-financing partners that provide transparency, flexibility, honesty and effort in regards to the terms that reflect your current financial situation.”
Leahy adds, “Make sure to compare offers and understand all the terms, not just the monthly payment.”
Loan terms are also crucial. Consider interest rates, fees and early repayment penalties. Remember that a longer term typically means paying more interest overall even if the monthly payment is lower. Having a real estate attorney review the mortgage contract and explain unfamiliar terms may be worthwhile. These tips can help you as a first-time homebuyer.
Why You Should Trust Us
As someone who purchased their first home in 2024, I know all too well what it’s like to be a first-time homebuyer. It can be overwhelming and at times, you might feel lost. My experience with buying my first home has given me the insights necessary to choose the best lenders for first-time homebuyers. Additionally, I interviewed industry experts who shared their valuable insights.
Lindsey Harn, whom I interviewed for this piece, is a top real estate agent in San Luis Obispo County, California. Harn has closed over 1,200 real estate transactions since 2019. Ryan Leahy, whom I also interviewed, is the founder and CEO of MORE Direct Seller Financing. Leahy has 22 years of experience in the mortgage industry, having closed over 4,000 transactions.
Benzinga was founded in 2010 and is trusted by over 25 million readers. It regularly publishes authoritative, research-backed content on investing, insurance, mortgages and other related subjects.
Methodology
Using Benzinga’s multi-point evaluation criteria, I analyzed mortgage products from 23 lenders to determine which ones are best suited to first-time homebuyers. Some of the key criteria I considered are interest rates, fees, loan variety and overall customer experience. I looked for lenders who allow lower down payments and have more flexible credit score requirements, which is often helpful for first-time homebuyers.
I also factored in ratings and reviews from independent sources such as TrustPilot, the Better Business Bureau (BBB) and Zillow. Those that ranked highest consistently received strong feedback on one or more of these platforms. Weighing these factors allowed me to identify those with the best overall customer service.
Applying for a mortgage can be challenging and first-time homebuyers may feel more comfortable applying online or through a mobile app. Lenders allowing borrowers to apply online without inundating them with too many questions received high marks. Those that don’t require an in-person visit also fared the best.
See Benzinga’s full methodology for a complete overview of how we determine the best mortgage lenders.
FAQ
A
Most first-time homebuyers can qualify for a mortgage with as little as 3% down on a conventional mortgage or 3.5% down for an FHA loan. Other loan types such as USDA and VA may require as little as 0% down. However, the actual down payment varies depending on the local real estate market and your credit history.
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The minimum credit score required for a mortgage varies depending on the loan type. Conventional mortgages typically require a credit score of at least 620. However, a score of at least 650 will open more options. However, FHA loans require a minimum score of 580 or 500 with a 10% down payment. Lender requirements may also affect the minimum credit score; check with individual lenders to learn about their requirements.
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Every lender is different, but they typically review the last two to six years of your credit history when assessing your application. The last two years are particularly important, as lenders typically check for negative indicators such as late payments and collection actions. However, negative remarks like late payments and defaults may stay on your credit report for up to six years, which can affect your approval odds.
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