Best Mortgage Lenders For First-Time Homebuyers in US 2024

Aspiring first-time homebuyers often embark on a journey filled with excitement and anticipation. However, navigating the complex world of mortgage lenders can be daunting, especially when faced with challenges like small down payments and lower credit scores. 

What to Consider When Choosing Your Mortgage Lender

• Product Offerings: Before committing to a mortgage lender, assess the range of products they offer. Are you considering FHA or USDA loans? Ensure that your lender provides these options to cater to your specific requirements.
• Interest Rates and Closing Costs: Even slight variations in interest rates and closing costs can significantly impact the overall cost of your loan. It’s crucial to compare these factors across different lenders to secure the most favorable terms for your financial situation.
• Experience with First-Time Borrowers: First-time homebuyers often come with unique financial profiles, including lower credit scores and smaller down payments. Choose a lender with proven experience in assisting borrowers with similar circumstances. Ensure they can accommodate your specific needs, such as a low debt-to-income ratio.
• Customer Service: A positive customer experience is paramount when dealing with mortgage lenders. Research lender reviews and ratings on platforms like the Better Business Bureau, Trustpilot, or the Consumer Financial Protection Bureau’s Consumer Complaint Database to gauge their reputation and commitment to customer satisfaction.

What are the best mortgage lenders for first-time homebuyers?

1. Wells Fargo Home Mortgage

Wells Fargo Home Mortgage is one of the mortgage lenders that caters to a diverse range of homebuyers, providing financing solutions for home purchases, new constructions, investment properties, and refinancing needs. Leveraging its affiliation with Wells Fargo Bank, the mortgage division extends its services nationwide, serving borrowers in every state.

Wells Fargo Home Mortgage boasts several mortgage lenders advantages that may appeal to first-time homebuyers. Firstly, the lender offers transparency by displaying mortgage rates online, facilitating easy comparison and decision-making for borrowers. 

Additionally, Wells Fargo’s extensive branch network provides accessibility and convenience, particularly for those seeking in-person assistance and support throughout the mortgage process. Furthermore, the consideration of non-traditional credit references and the availability of low-down-payment options can benefit borrowers with unique financial circumstances or limited credit history.

2. U.S. Bank

Founded in 1863 and headquartered in Minneapolis, U.S. Bank has established itself as a prominent financial institution in the United States, offering a wide range of banking and financial services, and has stood out as one of the best mortgage lenders.

U.S. Bank stands as one of the largest mortgage lenders according to federal data, showcasing its significant presence in the mortgage market. With branch locations in more than 25 states and loan officers available across the nation, U.S. Bank offers home loans to borrowers in all 50 states, encompassing various financing needs such as home purchases, refinancing, and investment properties.

One of the notable advantages of U.S. Bank’s mortgage services is its array of down payment and closing cost assistance programs. These programs cater to borrowers facing financial constraints, making homeownership more attainable for individuals with limited funds. Additionally, U.S. Bank offers discounts for existing banking customers, enhancing affordability and incentivizing customer loyalty.

3. Veterans United Home Loans

Since its establishment in 2002, Veterans United Home Loans has emerged as one of the most prominent mortgage lenders, specializing in VA loans and catering primarily to military borrowers. 

One of the standout features of Veterans United Home Loans is its emphasis on efficiency and flexibility throughout the lending process. The lender boasts rapid preapproval turnaround times, with the ability to issue preapprovals in mere minutes for qualified borrowers, accompanied by conditional approvals within 24 hours. 

Moreover, the average VA loan closing time of 36 days reflects the company’s commitment to expeditious and seamless transactions. Additionally, Veterans United demonstrates flexibility by considering non-traditional credit data, ensuring accessibility to financing for a diverse range of borrowers.

Veterans United Home Loans as a mortgage boasts several strengths, including its specialization in VA loans, round-the-clock customer service, and provision of free credit counselling for service members making it one of the best in the mortgage lenders world.

4. New American Funding

New American Funding is one of the biggest mortgage lenders that has originated more than $66 billion in mortgages. The mortgage lender prides itself on providing a wide range of mortgage options to cater to the needs of homebuyers and homeowners across the country. From low- and no-down-payment loans to fixed- and adjustable-rate mortgages, New American Funding offers flexibility and choice to borrowers seeking financing solutions.

One of the key strengths of New American Funding lies in its commitment to serving minority borrowers. The lender specializes in providing loans to minority communities, addressing the unique challenges and needs of underserved populations in the housing market. Additionally, the ability to choose between fixed- or adjustable-rate mortgages empowers borrowers to select the option that best aligns with their financial goals and preferences.

5. FHA Loans:

Federal Housing Administration (FHA) is one of the mortgage lenders whose loans are renowned for their accessibility, particularly for those with small down payments or fair credit scores. With a minimum down payment requirement of just 3.5% for borrowers with a credit score of 580 or higher, FHA loans offer a viable path to homeownership. Even applicants with credit scores between 500 and 579 may qualify with a slightly higher down payment. Moreover, FHA loans typically have more lenient debt-to-income ratio requirements compared to conventional loans, although they do entail upfront and monthly mortgage insurance premiums.