The Best Mortgage Lenders for First-Time Buyers of 2024

Lenders are not a one-size-fits-all proposition for every home buyer. The best mortgage lenders for first-time buyers can help prospective homeowners navigate their first home purchase with ease.

Best Overall

The Best Mortgage Lenders for First-Time Buyers Option Rocket Mortgage

Rocket Mortgage

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Runner-Up

The Best Mortgage Lenders for First-Time Buyers Option Guaranteed Rate

Guaranteed Rate

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Best Closing Costs

The Best Mortgage Lenders for First-Time Buyers Option PNC Bank

PNC Bank

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One of the greatest joys in adulthood is the purchase of a new home. But with this excitement comes a great deal of questions, processes, and paperwork, which typically centers around the mortgage-lending process. This is especially true for first-time home buyers, who face the unique challenge of not only buying a home in a challenging housing market, but not having the experience of having gone through the process before and understanding everything involved from start to finish.

The best mortgage lenders for first-time buyers not only understand the pressures and obstacles for today’s first-time home buyers, but work with them to ensure they are fully aware of each step and how the components of a mortgage make an impact on how much the buyer will pay.

  1. BEST OVERALL: Rocket Mortgage
  2. RUNNER-UP: Guaranteed Rate
  3. BEST CLOSING COSTS: PNC Bank
  4. BEST FOR VA LOANS: Veterans United
  5. ALSO CONSIDER: Mr. Cooper
The Best Mortgage Lenders for First-Time Buyers Options
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What to Consider When Choosing One of the Best Mortgage Lenders for First-Time Buyers

Mortgage companies vary from one to the next, sometimes significantly. Some lenders may specialize in specific types of home loans, while others may limit lending to certain geographic areas. Each lender uses its own eligibility criteria, which may be especially important for first-time home buyers who are unsure of the loan qualification process. The underwriting process, which is where the home buyer’s information is verified and reviewed by the lender for final loan approval, is another area where there may be significant differences—and one that can impact a first-time home buyer’s borrowing experience.

Coverage Area

Coverage area may not immediately seem like a huge deal, but potential buyers may not realize that certain mortgage banks for first-time home buyers may not be licensed in every state; local mortgage lenders, for example, may only be licensed in one or two states. The first step is to confirm whether a mortgage lender is licensed to do business within the state where the home purchase is taking place. This is even more important for buyers who are planning an out-of-state move.

Most of the large mortgage lenders with a national presence are licensed to lend in all 50 states and Washington, D.C., but it’s a smart idea for home buyers to confirm the home financing firm they’re considering serves the location where they’re buying before going through the prequalification or application process.

Eligibility Requirements

The eligibility requirements are set by a lender to determine what loan type a first-time home buyer may qualify for. Lenders base all their lending decisions on the level of risk a buyer presents, and eligibility requirements are used to assess this overall risk.

While lenders each have their own specific requirements, they often include the down payment amount, the buyer’s creditworthiness and income, and the buyer’s debt-to-income ratio (DTI). DTI is simply the percentage of gross income that is used to pay for debt obligations on a monthly basis. This, and any other financial requirements set by the lender, is examined closely to determine whether the lender will approve the borrower’s mortgage application.

Loan Types

Most people think of a mortgage as a 30-year obligation with principal and interest. However, loans are quite varied, and there are multiple loan programs available. Some of the most common loans include the following.

  • Conventional loans. These are not backed by the government and typically have strict credit requirements. Interest rates are either fixed (the rates will not change during the life of the loan) or adjustable (which means rates can fluctuate based on market rates).
  • Fixed rate. With a fixed-rate mortgage, the interest rate stays the same throughout the loan, whether it’s a 10-, 15-, or 30-year option or another length of time.
  • Adjustable rate (ARM). An ARM includes a fixed interest rate for a set period of time, or introductory period, after which the rate will adjust based on market conditions.
  • Federal Housing Administration (FHA) loans. FHA loans are loans issued by private lenders, but regulated by the FHA. This type of loan allows a lower down payment and lower credit score to qualify.
  • Veterans Affairs (VA) loans. The Department of Veterans Affairs (VA) offers mortgages specifically to active military members, veterans, and eligible surviving spouses. The VA does not offer the actual lending, but rather sets up rules and guidelines for lenders and guarantees the loans. Borrowers may be able to put as little as $0 down with a VA loan.

Loan Terms

The loan term refers to the length of repayment in number of years and is an integral part of the mortgage, ultimately determining how much a homeowner pays over the life of the loan. The longer the loan repayment term is, the more in interest the borrower ends up paying over the loan duration. Most fixed-rate loans are available in 15- and 30-year loan terms, although lenders may also offer 10- and 20-year options.

Where loan terms may confuse some borrowers is when there is both a fixed-rate and an adjustable rate within the loan term. For example, a 5/1 ARM mortgage means the first 5 years of the loan term are at a fixed rate and then the rate begins adjusting once per year (based on market conditions) after the 5-year period is over until the loan term concludes.

Mortgage Rate

Where loan terms tell a borrower how many years repayment will take, the mortgage rate is the interest rate and determines the cost to borrow the money. If the mortgage rate is higher, then it means it costs the borrower more money to finance the home. Mortgage rates for first-time home buyers and repeat buyers alike are set by lenders based on a variety of conditions, including inflation, federal funds rate, security bonds, and other economic factors. The average interest rate for first-time home buyers can vary from day to day, or sometimes even within the same day. Additionally, a good mortgage rate will vary from borrower to borrower and from lender to lender, which makes shopping around a smart move for a potential borrower.

Not only do lenders offer various mortgage rates, but the rate also changes based on the loan term. Typically, shorter loan terms have lower interest rates; for example, borrowers will likely get a lower rate on a 15-year mortgage than they would on a 30-year mortgage. Also, a borrower’s financial factors influence the quoted mortgage rate. Borrowers with the best credit scores, higher down payments, and lower debt payments will most likely receive the most favorable rates. Borrowers can get the best mortgage rate by shopping around and comparing rates from different lenders.

Annual Percentage Rate

The annual percentage rate, or APR, is a more accurate measure of the cost of the loan. While APR does refer to a loan’s interest rate, it also includes the total costs to take out a loan. APR is expressed as a percentage and includes the principal and interest, closing costs, attorney fees, mortgage points, and any other expenses associated with the loan. Like the interest rate, the APR can vary from one lender to another, making it a crucial point to compare when shopping for loans.

Average Closing Costs

First-time home buyers may be unaware of the potential for high closing costs associated with a mortgage, simply because they haven’t been through the process before. Closing costs are money a borrower owes at the closing table. While some of the costs may be included in the loan balance, most of the funds have to be paid out of pocket. These out-of-pocket costs often include origination fees, title insurance, recording fees, and attorney fees.

Like other aspects of the mortgage, closing costs charged by lenders can vary, which means that it’s worth comparing when considering which lender to choose.

Prequalification Process

Preapproval and prequalification are often used interchangeably, but they do not mean the same thing. Prequalification is a fantastic way for a first-time home buyer to get a better understanding of how much house they can actually afford, which is extremely valuable information to have as they start looking for a new residence. A lender can provide a prequalification amount to the borrower, so there is a general idea of what the buyer can afford. It’s important for borrowers to note that a prequalification does not necessarily mean a loan approval. It simply offers parameters for the potential buyer to use. After going through the prequalification process, buyers can look into how to get preapproved for a home loan, which can help show home sellers that a buyer who makes an offer on their property is serious and can back up their offer with a mortgage.

In general, the prequalification process is quick and requires little effort. It may even be completed entirely online or through an app, which could appeal to those who need a quick answer.

Application Process

The application process should not be confused with the prequalification process. This part of the process may seem overwhelming to a first-time home buyer, but fortunately most lenders are prepared to walk a borrower through the most important steps. Not only is there quite a bit of paperwork involved, but this is where finances and personal information are examined and face a bit of scrutiny.

Many lenders now offer online applications or the ability to apply through an app. Using a digital approach means the borrower must submit digital copies of all the required documents, such as bank statements, W-2s, and other financial documents. If a borrower is skeptical about submitting this information online, it may be better to choose a mortgage lender that offers an in-person option for the application.

Mortgage Points

Mortgage points, or discount points, give a buyer the opportunity to “buy down” the interest rate. Essentially the homeowner prepays for a percentage of the mortgage cost, which lowers the amount of a loan that is financed. Some borrowers like this option because it may lower the overall interest paid over the life of the loan and save money. Not all lenders offer mortgage points as an option, so if this is an important consideration for a first-time home buyer, then shopping around to find a lender offering it may be necessary.

Our Top Picks

The best mortgage lenders for first-time buyers offer a range of loan types, flexible financing options, and a streamlined application process. Each borrower has their own unique financial needs and may prefer working with a lender better suited for their circumstances.

Best Overall

Rocket Mortgage

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Why It Made the Cut:

Rocket Mortgage offers a wide coverage area, multiple touchpoints for the application process, and a wide range of loan types—ideal for the first-time home buyer.

Rocket Mortgage is well known in the lending industry and is large enough to offer a wide array of loan products and terms designed to fit almost any buyer’s circumstances. The company lends to customers nationwide while offering a convenient application process either online, by phone, or through the app, plus a 1.5 percent closing credit. Customers can further reduce their closing costs through the Rocket Rewards program—borrowers will earn points by completing simple tasks such as reading articles or watching videos on Rocket’s website and by playing around with the company’s mortgage calculators. At closing time, the borrower can redeem their points on their closing costs, which will reduce their total out-of-pocket costs when taking out a mortgage.

During the research process, borrowers can use Rocket Mortgage’s rate tool to get an idea of their mortgage costs; however, borrowers will want to note that the tool can be a little misleading, especially for first-time buyers who are unfamiliar with the mortgage process. Listed rates in this tool are based on a borrower with an excellent credit score (740 or higher) and who purchases two mortgage points, which would add thousands of dollars to their total borrowing costs. Therefore, the tool may not give first-time buyers a clear picture of what they can expect their mortgage to cost. But once the borrower completes their application, Rocket Mortgage offers a 90-day rate-lock option, known as RateShield. If interest rates go up during this time, the borrower will still be locked into their original lower rate. However, if rates decrease, the borrower can choose to replace their locked-in rate with the reduced rate one time during the 90-day period. This can give borrowers extra peace of mind that they’re getting the best rate for their home loan.

 

Specs

  • Coverage area: 50 states and Washington, D.C.
  • Loan types: Fixed rate, ARM, FHA, jumbo, VA loans, FHA 203k
  • Loan terms: 15, 20, or 30 years on fixed-rate loans; 7 or 10 years on ARM loans
  • Prequalification process: Online, phone
  • Application process: Online, phone, app
  • NMLS Unique Identifier: 3030

Pros

  • 90-day rate-lock option
  • 1.5 percent closing cost credit
  • Rewards program points redeemable toward closing costs
  • Convenient mortgage application and management via mobile app

Cons

  • Somewhat misleading mortgage rate tool

Runner-Up

Guaranteed Rate

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Specs

  • Coverage area: 50 states and Washington, D.C.
  • Loan types: Fixed rate, ARM, FHA, jumbo, VA loans, FHA 203k, medical professional
  • Loan terms: 15 or 30 years on fixed-rate loans; 5, 7, or 10 years on ARM loans
  • Prequalification process: Online, phone
  • Application process: Online, phone, app, agent
  • NMLS Unique Identifier: 2611

Pros

  • Relatively low mortgage rates and APR on FHA loans
  • Same-day mortgage approval possible
  • 90-day rate-lock option
  • Convenient mortgage application and management via mobile app

Cons

  • Relatively high mortgage rates and APR for conventional home loans

Why It Made the Cut: Guaranteed Rate is a strong choice for consideration since it offers competitive interest rates and APR for FHA loans, which can save a home buyer thousands of dollars over the life of their loan. First-time home buyers often choose FHA loans because they have lower requirements for down payments than conventional loans, as well as less-stringent credit requirements. Guaranteed Rate’s APR and mortgage rates on FHA loans are relatively low, saving first-time home buyers even more money—this makes Guaranteed Rate one of the best FHA lenders for first-time home buyers. However, borrowers considering a conventional loan may find higher rates and APRs on conventional fixed-rate loans—though this will depend on the borrower’s qualifications and the market rates, so not all borrowers will find this to be the case. Guaranteed Rate’s application process is designed to be convenient and user-friendly, with multiple application options including online, by phone, through a mobile app, or in person with an agent. The lender also offers same-day approval for eligible borrowers, which can speed up the financing process for home buyers who want to take possession of their new home as quickly as possible. Guaranteed Rate’s Lock ‘N’ Roll program lets borrowers lock in their rate for 60, 75, or 90 days. If rates go up while the borrower is still searching for the right home, they can still take advantage of their original interest rate. If rates go down, borrowers have the option to negotiate and potentially reduce their mortgage rate—though they may need to pay an additional fee to do so. Either way, this option could be appealing to home buyers who are worried about rising interest rates and would like the option to lock in their mortgage rate at the start of their home-buying journey. Guaranteed Rate borrowers can use the company’s app to compare rates across different loan options, apply for a home loan, and get preapproved for financing. Borrowers can also contact their assigned loan officer through the app via text, email, or phone, getting assistance during the home-buying process. Once the loan is finalized, borrowers are able to manage their loan through the app, making payments and taking care of other tasks. This adds even more convenience for first-time home buyers who may be nervous about the home-financing process.  

Best Closing Costs

PNC Bank

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Specs

  • Coverage area: 50 states and Washington, D.C.
  • Loan types: Fixed rate, ARM, FHA, VA loans, medical professional
  • Loan terms: 15 or 30 years on fixed-rate loans; 5, 7, or 10 years on ARM loans
  • Prequalification process: Phone, agent
  • Application process: Online, phone, agent
  • NMLS Unique Identifier: 446303

Pros

  • Closing cost grant of up to $5,000 available for qualifying borrowers
  • Low 3 percent down payment option with no PMI
  • User-friendly and details-driven home affordability calculator and real estate platform

Cons

  • Online prequalification unavailable

Why It Made the Cut: PNC Bank offers customers a closing grant of up to $5,000 for qualified buyers, which can make a huge difference in the costs a first-time home buyer is responsible for at closing. PNC Bank offers a wide range of loan options, from fixed-rate and VA loans to loans tailored to medical professionals. However, it’s the lender’s assistance with closing costs that makes it stand out from other lending institutions. For starters, PNC Bank offers qualified buyers up to $5,000 in grants to be used toward closing costs or prepaid costs, such as escrow deposits for homeowners insurance premiums or property taxes. In some cases, the borrower may be able to use this grant as a down payment on their new home. This can help first-time buyers keep their overall costs low, so they’re in better financial shape once they close on their new home. Additionally, PNC Bank offers a unique loan program with a down payment option as low as 3 percent but without the need for the borrower to pay mortgage insurance. Typically, borrowers who put down less than 20 percent on a home purchase will be required to pay private mortgage insurance (PMI), which is a percentage of the loan total that the borrower must pay to the lender as part of their mortgage payment until they reach 20 percent in equity. This program is ideal for buyers who don’t have 20 percent saved up for a down payment but want to avoid the additional cost of mortgage insurance. Although borrowers cannot get prequalified online for a PNC Bank loan, they can use its intuitive and detailed home affordability calculator to figure out how much they can really spend on their monthly mortgage after accounting for other financial obligations such as taxes, insurance, recurring debt, living expenses, and so on. This tool is fast and easy to use, giving buyers an accurate idea of what they can afford to pay for a new house. Once they have their results, they can explore real estate listings in their desired location through PNC Bank’s Home Insight Planner tool. This seamless process can make it easy for first-time home buyers to figure out what they can afford and what their realistic options look like in their preferred real estate market.  

Best for VA Loans

Veterans United

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Why It Made the Cut:

VA loans are a unique mortgage product with particular qualifications, and Veterans United specializes in working exclusively with these types of loans.

VA loans are mortgages offered specifically to active military members, veterans, and eligible surviving spouses. The Department of Veterans Affairs (VA) does not offer the actual lending, but rather sets up rules and guidelines for lenders and guarantees the loans. Because of the particular requirements under the program, it’s critical for a home buyer to work with a lender who understands the ins and outs of the VA lending process. Veterans United is one such lender that only covers VA loans, which makes it extremely knowledgeable about this type of loan. First-time buyers in particular may feel more at ease and in good hands working with a lender that focuses exclusively on VA loans if this is the type of mortgage they want to use on their home purchase. However, borrowers looking for another type of loan, such as conventional or FHA, will need to look elsewhere as Veterans United does not offer these types of loans. Additionally, civilian buyers will not be eligible to apply for a loan with this lender.

Veterans United hosts a detailed home-buying course for buyers looking to use a VA loan for financing. This course is run by the company’s internal VA loan experts and covers everything from helping veterans determine if they are prepared for homeownership, to mortgage basics and loan eligibility requirements, to loan options and applying for a VA loan. These lessons may be very helpful for first-time home buyers, especially those who want to take advantage of VA loans but aren’t sure how they work or how to go about getting financing.

Veterans United offers free credit consulting services to borrowers who are unable to qualify for a VA loan due to excessive debt, low credit scores, past instances of bankruptcy, or other financial issues. The company’s credit consultants will work with members to fix errors on their credit report, reduce debt, develop financial goals, resolve outstanding collections, stay on top of recurring financial obligations, and steadily work toward VA loan eligibility. This is a completely free service for Veterans United members, helping them achieve their dream of homeownership further down the road once their finances are in order.

 

Specs

  • Coverage area: 50 states and Washington, D.C.
  • Loan types: VA loans
  • Loan terms: 15 or 30 years
  • Prequalification process: Online, phone
  • Application process: Online, phone
  • NMLS Unique Identifier: 1907

Pros

  • Specialty in VA loans
  • Extensive and informative online VA home-buying course
  • Free credit consulting services

Cons

  • Financing unavailable for civilian home buyers
  • Conventional and FHA mortgages unavailable

Also Consider

Mr. Cooper

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Why It Made the Cut:

Mr. Cooper can offer low rates on conventional fixed-mortgage rates. If a potential buyer is interested in another type of mortgage, Mr. Cooper also offers an array of loan products including ARM, FHA, and VA loans.

If a first-time home buyer is interested in obtaining a conventional mortgage, then Mr. Cooper could be their ideal lender. Although borrowers looking for FHA loans may find Mr. Cooper’s mortgage rates to be relatively high, the lender offers competitive and fairly low mortgage rates on conventional home loans, which could mean thousands of dollars in savings over the life of the loan for borrowers. It also offers additional savings opportunities, with a 1 percent Mortgage Markdown offer that will lower a home buyer’s interest rate on a conventional mortgage by 1 percent for the first year of their loan. This would effectively reduce their mortgage payments during that time period, making it easier to afford a home loan for the initial 12 months of financing.

Interested borrowers will need to prequalify or apply for a loan over the phone, as Mr. Cooper does not offer an online application process. While this may be less convenient for some buyers, first-time buyers may feel more comfortable talking directly with a loan officer anyway since they haven’t gone through the application process before.

The RateSwap program waives origination fees on any mortgage refinances a borrower applies for within 3 years of taking out a home loan. This has the effect of providing borrowers with a credit of up to $1,500 to apply to a future mortgage refinance. This offer could be very appealing to buyers who are eager to purchase their first home but are concerned about paying mortgage rates and may want to refinance if rates drop over the next few years.

 

Specs

  • Coverage area: 50 states and Washington, D.C.
  • Loan types: Fixed rate, ARM, FHA, VA loans
  • Loan terms: 15 or 30 years on fixed-rate loans; 3, 5, or 10 years on ARM loans
  • Prequalification process: Phone
  • Application process: Phone
  • NMLS Unique Identifier: 2119

Pros

  • Relatively low mortgage rates and APR on conventional home loans
  • 1 percent rate reduction for first year of conventional mortgages
  • Up to $1,500 credit for future mortgage refinancing

Cons

  • Relatively high mortgage rates and APR on FHA loans
  • No online prequalification or application option

Our Verdict

Our choice for the Best Overall mortgage lender for first-time buyers is Rocket Mortgage because of its wide coverage area and the ability for borrowers to lock in a rate for 90 days while loan shopping. Guaranteed Rate was chosen as our Runner-Up because of its competitive interest rates on FHA loans and streamlined mortgage application process.

How We Chose the Best Mortgage Lenders for First-Time Buyers

When researching the best home loans for first-time buyers, we considered numerous factors. To start, availability played a large part in our decision-making process, since a borrower needs to be sure a lender is available in the particular state in which they’re purchasing a home. Secondly, cost was a major consideration, since this is likely the largest purchase a first-time home buyer has ever made. Potential costs with each lender, including down payment requirements, closing costs, first-time home buyer interest rates, and APRs, were all examined during our research.

We also looked into the customer-service options at each lender, including the different methods for borrowers to get prequalified and apply for a loan. Because every borrower’s preferences are different, we felt it was important to look for lenders that offered several methods, such as online, by phone, or in person. Finally, we considered the types of loans offered by each lender, such as conventional, FHA, and VA.

Before You Choose One of the Best Mortgage Lenders for First-Time Buyers

When purchasing a house as a first-time buyer, the best mortgage options will vary from borrower to borrower. Before selecting a lender, it’s critical for borrowers to understand the true cost of homeownership and how much they can truly afford each month for a mortgage payment. They’ll want to remember to factor in costs such as homeowners insurance premiums and property tax, which are typically paid as part of the monthly mortgage payment and kept in an escrow account until they need to be paid. When searching for a lender, it’s helpful for the borrower to have a running list of all monthly and annual financial obligations so they can come up with a realistic monthly budget.

It’s wise for borrowers to review the personal financial criteria that lenders use to evaluate a mortgage approval. This means borrowers will want to understand their current credit score, debt obligations, and any changes in income, which all impact not only the odds of approval but also how much the loan costs.

Finally, borrowers will want to note that while the lenders listed here are likely a good fit for many borrowers, they will not necessarily be the best for every borrower. That’s why it’s important for them to shop around for a loan, comparing loan terms, mortgage rates and APR, and other factors to determine which one is the best fit for their needs and budget.

Cost of Opting for One of the Best Mortgage Lenders for First-Time Buyers

The cost of using one of the best mortgage lenders depends in large part on the cost of the property that is being purchased. There are several expenses associated with obtaining a mortgage, including a down payment, closing costs, and monthly mortgage payments. Other expenses are due at closing, too, such as up-front homeowners insurance premiums, property taxes, possible homeowners association dues, attorney fees, and other fees, which may vary by lender. Borrowers who put down less than 20 percent on a conventional mortgage will also likely need to pay private mortgage insurance until they reach 20 percent in equity, and FHA borrowers will need to pay a mortgage insurance premium for the life of the loan.

The Advantages of Opting for One of the Best Mortgage Lenders for First-Time Buyers

First-time home buyers do not typically have the experience that comes from making such a large purchase. Choosing one of the best mortgage lenders specifically for first-time buyers can ensure that each step in the process is thoroughly explained and the borrower fully understands the financial obligations before them. These lenders may also offer other benefits including:

  • Rate locks to protect a borrower’s rate from increasing before closing;
  • Competitive interest rates and APR for the loan products first-time buyers are most likely to use, so the buyer has the potential to save over the course of the loan; and
  • Numerous loan options to suit a wide range of buyers, such as conventional, FHA, and VA loans.

FAQs

Mortgages can be confusing, especially for first-time borrowers who are new to the process. With so many variables, from interest rates to loan terms, it’s understandable that first-time home buyers (and even repeat home buyers) have questions surrounding the process. The following are a few of the most common questions and answers to help first-time home buyers navigate the process.

Q. How do first-time home buyer loans work?

The process of applying for a home loan as a first-time home buyer is essentially the same as the process for a seasoned buyer—but first-time buyers are less likely to be familiar with the process. Loans for first-time home buyers vary, depending on the type of loan the buyer qualifies for. However, many lenders offer loans geared toward these buyers, which may have special incentives, requirements, or loan terms to better fit a first-time buyer.

Q. What is a first-time home buyer?

A first-time home buyer is someone who has never owned a home or purchased a residence before.

Q. What are the best credit scores for first-time home buyers?

It is recommended a first-time home buyer have a credit score of at least 640 to qualify for a mortgage. Typically, the higher the credit score, the more favorable loan terms the buyer receives. In addition, a higher credit score increases the likelihood of loan approval. Buyers with less-than-desirable credit scores may want to focus on improving their score before purchasing their first home.

Q. What type of mortgage is best for a first-time home buyer?

FHA loans are popular among first-time home buyers because of the lower down payment requirements and less stringent credit requirements. However, each buyer’s financial situation is unique, so it’s important that they explore multiple loan products to find the best fit.

Q. How do I get approved for a home loan as a first-time buyer?

First-time buyers wondering how to get a mortgage will want to note that each lender’s requirements vary, which is why it’s important to do research and shop around. But in general, a first-time home buyer can expect loan approval based on the amount of income they earn, employment, credit history, and the down payment amount, plus other qualifications set by the lender.

Q. How much money do I need for a down payment?

The down payment amount needed varies depending on the loan type. For example, an FHA loan only requires a 3 percent down payment. However, if a buyer chooses to put down a higher amount—typically around 20 percent or more—it can cut down on additional fees from the lender.

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Sara Coleman

Contributing Writer

Sara Coleman is a full-time writer, editor, and published author. She covers personal finance and lifestyle topics ranging from insurance and credit cards to small business and pet ownership. Her work has appeared in numerous publications, including Bankrate, Joy Wallet, Wayfair, and Credible. When not writing, Sara enjoys ushering her kids from one activity to the next and spending time with friends and family.

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