9 Best USA Mortgage Lenders For First-Time Buyers and Why
Loans for homes are provided and underwritten by mortgage lenders, such as banks or other financial institutions. Loan applications must adhere to the lending industry’s established protocols so that lenders may assess an applicant’s credit history and repayment capacity. They determine the mortgage’s terms, interest rate, and payment schedule.
What are the best USA mortgage lenders for first-time buyers?
Many factors might make the home-buying process more difficult for first-time purchasers. People who have never owned a house before typically put down less money for a down payment than those who have moved multiple times. FHA, VA, and USDA loans are excellent possibilities because of their affordable down payments and minimum credit score requirements.
Below is a list of the top 9 mortgage lenders that excel in several categories, such as providing low down payment mortgages or first-time buyer loans.
1. Better
In many respects, better makes one’s life easier. Applying and completing the process is entirely paperless and can be done online from any location. They can typically provide a rate quote and preapproval to applicants within 20 minutes of submitting their complete application. Moreover, the lender has implemented a system to proactively seek potential savings for borrowers at no additional cost or effort to the customer.
Neither the borrower nor the lender will incur any costs associated with applying for or closing a loan through Better. Better estimates that You can save 1% of the loan amount thanks to their commission-free business model. Throughout a loan, this amounts to an average savings of $19,000.
2. Guaranteed Rate
Borrowers of mortgages should expect costs in the middle of the market and interest rates that hover just below the national average. As an added perk, potential borrowers can get prequalified online in as little as 15 minutes and receive a preapproval letter in as little as 24 hours. VA and FHA loans have a significantly lower minimum credit score requirement than conventional loans, at just 600 FICO.
Those borrowing for the first time and who don’t yet have a long credit history may benefit from this. Loan costs are not charged by Guaranteed Rate for Veterans Affairs borrowers who purchase a home with a VA loan by refinancing an existing VA mortgage. The minimal standards are lower than usual, which is great news for first-time borrowers and people with less-than-perfect credit. For instance, FHA and VA mortgages have lower minimum credit score requirements of just 600, whereas a conforming mortgage and USDA loan both require 620.
3. PNC
PNC Bank is a national bank that offers low- and middle-income mortgages. Home Insight, a PNC online experience, helps users calculate their maximum monthly mortgage payment and provides real-time rate projections and loan choices to begin their property search. Customers can check the status of their loan application and submit supplementary documents online. PNC pre-approves internet loan applications in minutes.
4. Ally
Ally has cheap interest rates and average costs of 2% to 5% of the loan amount. Fannie Mae HomeReady requires only a 3% down payment, making it attractive to first-time purchasers. Qualified borrowers can get a pre-approval letter in three minutes, giving them an edge in a competitive market.
Borrowers can lock in a rate 10 minutes after getting preapproved. Ally customers can track their cases online, sign documents electronically, and upload data. You can accomplish most of the work remotely if you have the internet.
5. Loan Depot
LoanDepot is a significant non-bank mortgage provider with over 150 branches and an extensive web presence. Refinancing, government loans, and conventional mortgages are available. When customers use the lender’s Mello Smart loan online platform, they can reduce closing by 17 days by electronically linking and verifying their assets, income, and debt. The Mello Smart loan digitally handles title clearance, a tiresome but crucial part of underwriting. This technology can save time and money on your mortgage by identifying if you require an appraisal.
6. Quicken
When it comes to home mortgages in the United States, Quicken Loans is a major player. Borrowers have access to customer care whenever they need it, day or night, thanks to the company’s 24/7 online availability and responsive website. One of the main benefits of using Quicken Loans is their competitive mortgage rates. Interest rates offered by Quicken are now above the national average. According to J.D. Power’s annual customer satisfaction study, consumers have chosen Quicken Loans as their preferred mortgage servicer for the seventh year.
7. Bank of America
Bank of America offers mortgages and refinancing. Bank of America maintains approximately 5,000 physical locations in the U.S. and its digital mortgage options. Online applications, contracts, and rate locks are all available.
Online chats with lending experts are available. Bank of America has affordable mortgage rates and accepts in-person and online applications. The Affordable Loan Solution mortgage program requires only a 3% down payment and no PMI.
8. Guild Mortgage
Guild offers online and in-person mortgages. 31 branches are available for face-to-face transactions. My mortgage accepts online applications from borrowers in 48 states. Guild Mortgage’s minimum credit score is 600, 20 points lower than average. Guild Mortgage is easy and fast, perfect for people who can’t wait. Guild Mortgage auto-matches customers with state and local down-payment programs. 17-Day Homebuyer Express Closing Guarantee. Freddie Mac reports a 43-day average. If Guild Mortgage delays the closure, the lender pays $500.
9. Mr. Cooper
Mr. Cooper is a major player in the non-bank mortgage market. Mr. Cooper, headquartered in Dallas, serves borrowers in all 50 states by providing the standard array of conventional, jumbo, FHA, and VA mortgage options. Mr. Cooper is an excellent option for customers whose credit scores exceed the normal minimum requirement of 600 conventional loans or 580 FHA loans.
Conclusion
Getting a mortgage as a first-time buyer can be difficult due to a number of factors, including a low credit score and an inability to save for a sizable down payment. If this describes you, you should look for a lender who offers affordable down payment and minimum credit score requirements. Determine your creditworthiness and calculate a down payment according to your budget before applying.
Many financial institutions provide first-time homebuyers with specialized loans and standard mortgage options such as FHA. You should check with your current bank before looking elsewhere for financing. Enquire whether they offer any suitable loans to you. They could even provide discounts to their clientele.