Best mortgage lenders for first-time home buyers in 2022

With so many mortgage lenders, it can be hard to know where to start, especially if you’re a first-time home buyer. Bankrate has taken a close look at several key criteria to help narrow down the top mortgage lenders for newbies, including the low-down payment products or down payment assistance they offer, the first-time buyer programs they offer, feature and other aspects that can help borrowers navigate. the home buying process. Here’s our guide to the best mortgage lenders for first-time buyers in 2022.


Methodology

In order to determine the best mortgage lenders for first-time home buyers, Bankrate evaluated lenders based on several criteria, including affordability, first-time home buyer availability, low-cost loan programs. credit or low-payment and other considerations, such as incentive pricing or savings. .


Best mortgage lenders for first-time home buyers

Bank of America

Bank of America Mortgage Review

Loan products Purchase and refinancing; conventional, jumbo, FHA, VA, home equity line of credit (HELOC)
Credit requirements 620 for conventional loans; 680 for jumbo loans
Advantages
  • Easy online prequalification tool
  • Low credit score and down payment requirements on some loans
  • 3% down payment grant (capped at $10,000)
  • Lender credit up to $7,500 available
  • Discounts for existing customers
The inconvenients
  • USDA loans, reverse mortgages, construction loans and home equity loans not available
Highlight Bank of America offers down payment and closing cost assistance programs to eligible homebuyers.

Chase home loan

Chase Home Lending Mortgage Review

Loan products Purchase and refinancing; conventional, jumbo, FHA, VA
Credit requirements 620 for conventional loans; 640 for FHA loans and VA loans; 680 for jumbo loans
Advantages
  • $500 Home Buying Credit for Chase DreaMaker Mortgage Applicants Who Take a Home Buying Education Course
  • Price discounts for select Chase customers
  • $2,500 closure guarantee
The inconvenients
  • USDA loans and construction loans not available
Highlight You may be eligible for a $2,500 Chase Homebuyer Grant to help cover closing costs or lower your interest rate.

PNC Mortgage

PNC Mortgage Review

Loan products Purchase and refinancing; conventional, jumbo, FHA, VA, USDA, home equity line of credit, home equity loan, interest only, investment property
Credit requirements 620 for conventional loans, jumbo loans and FHA loans; 640 for USDA loans
Advantages
  • User-friendly online dashboard to track loan application status
  • Fast pre-approvals
The inconvenients
  • No online prequalification tool
  • Branches only available in certain states
Highlight PNC offers assistance grants of up to $5,000 to help with closing costs.

Carrington Mortgage Services

Carrington Mortgage Services Review

Loan products Purchase and refinancing; conventional, FHA, VA, USDA, non-QM
Credit requirements 620 for conventional loans; 500 for FHA loans and VA loans; 550 for non-QM
Advantages
  • Several loan options for first-time buyers
  • Available in most states
  • Consider alternative credit history for some borrowers
  • BBB accredited with an A+ rating
The inconvenients
  • Potentially higher mortgage rates
  • Loans not available in Massachusetts and North Dakota
Highlight Carrington Mortgage Services offers the Flexible Advantage home loan product for borrowers who are self-employed or who have a low credit score, recent credit issues, or a high debt-to-income ratio (DTI).

NBKC Bank

NBKC Bank Mortgage Review

Loan products Purchase and refinancing; conventional, jumbo, FHA, VA, home equity line of credit, home equity loan, construction and renovation loans
Credit requirements 620 for conventional loans, FHA loans, and VA loans; 680 for jumbo loans
Advantages
  • Competitive interest rates
  • Educational resources for first-time home buyers
  • Online chat support available
  • Online loan processing
  • A+BBB rating
The inconvenients
  • USDA loans not available
  • Construction loans and HELOCs are only available in Kansas
  • Down payment assistance programs not available
Highlight NBKC Bank offers a $5,000 closing guarantee.

First-Time Home Buyer Loan Programs

There are many types of loans to choose from when you’re a first-time home buyer, including:

  • Conventional loans backed by Fannie Mae or Freddie Mac – A loan that only requires a 3% down payment, but also a minimum credit score of 620 (sometimes higher, depending on the lender) and other credit criteria. eligibility
  • FHA Loans – A government-insured loan (and one of the easiest loans for beginners to get) that requires as little as 3.5% if your credit score is 580 or higher, or 10% if your credit score is between 500 and 579, and mortgage insurance required
  • VA Loans – A government-backed loan for military, veterans, and spouses that does not require a down payment, but does require a finance charge
  • USDA Loans – An ideal government loan for low-middle income borrowers buying a home in a USDA-eligible rural area, with no down payment requirement
  • Fannie Mae’s HomePath Ready Buyer Program – Offers 3% closing cost assistance to first-time home buyers of foreclosed Fannie Mae properties and requires successful completion of a buyer education course
  • Good Neighbor Next Door – A U.S. Department of Housing and Urban Development (HUD) program that helps police officers, teachers, paramedics, and firefighters buy homes in certain areas
  • FHA 203(k) – Allows you to borrow the funds you need to buy and repair a home, all in one mortgage and with a low down payment required

The type of loan that’s best for you depends on many factors, including how much you’ve saved for a down payment, your credit score, and whether you work in a particular field or have served in the military.

Aid and aid for home ownership

If you don’t have the funds for a down payment or closing costs, help is available, either through your mortgage lender or through a local, federal or state housing authority or other organization.

One form of assistance for those who qualify is a first-time home buyer’s grant. Grants are a one-time lump sum that helps cover your down payment or closing costs. Often these grants do not have to be repaid if you stay in the house for a certain period of time or meet other criteria.

You can ask your lender what grants might be available to you, and also search for grants or other assistance programs in your area by using Bankrate’s directory of homeownership programs by state.

In addition to grants, you may be eligible for other financial resources as a first-time buyer, including:

  • Low interest loans, which must be repaid (unlike grants) over several years
  • Reimbursable loans, which do not have to be repaid once you have passed a specific period of time, provided you stay in the house and are up to date on your mortgage payments
  • Deferred repayment loans, which generally must be repaid in full, but do not charge interest
  • Matched Savings Programs, in which a bank or other organization matches the amount you deposit with the institution

How to Choose a Mortgage Lender as a First-Time Home Buyer

There are several types of mortgage lenders you might encounter in your loan search, including banks, credit unions, and independent, noncustodial institutions. You can also meet with mortgage brokers, who can help you find suitable loan offers from various lenders.

When researching a lender, consider your goals and what you might enjoy about your experience getting a mortgage. What kind of loan are you looking for? How long do you plan to stay in the area? Would you feel better with 24/7 support? Do you need access to homebuyer education? All of these questions and more can help you narrow down your choices.

Once you have a short list, shop around and compare mortgage offers before committing. Lenders include the APR, or annual percentage rate, and the interest rate on an offer, but you really want to consider the APR, which reflects the actual cost of the mortgage. In general, the lower the APR, the cheaper the loan will be.

Here are more tips for finding the best mortgage lender as a first-time home buyer.

Summary: The best mortgage lenders for first-time home buyers

With additional reporting by Allison Martin

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