12 Best Mortgage Lenders for First-Time Buyers of August 2023

Our experts answer readers’ home-buying questions and write unbiased product reviews (here’s how we assess mortgages). In some cases, we receive a commission from our partners; however, our opinions are our own.

First-time homebuyers often need extra help or affordable mortgage solutions to get them through the mortgage process. That’s why it’s important to have a lender that is equipped to meet their unique needs.

All of our top picks allow low down payments and thrive in customer satisfaction and affordability. Many have special features such as down payment assistance that can help make homeownership even more affordable.

The Best Mortgage Lenders for First-Time Buyers of 2023

The Best Mortgage Lenders for First-Time Buyers

Why You Should Trust Us: Our Expert Panel on Choosing the Best Mortgage Lender for First-Time Buyers

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To help you learn more about homebuying, mortgages, and lenders, four experts weighed in:

Here’s their advice about how to evaluate mortgage lenders, and how to decide which type of mortgage is best for you. (Some text may be lightly edited for clarity.)

What factors should someone take into consideration when choosing a mortgage lender?

Anthony Park, author:

“The canned answer is to just go with the lowest rate. However, you also want to take into account who’s going to serve your loan best. Are repayments going to be easy for you? Who is most likely to be able to help you if you need to take out a HELOC or refinance later, versus somebody who’s more of a one-off type?

“They may have the lowest rates to get you involved, but they might have very, very little hand holding after the fact. I wouldn’t recommend paying an exorbitant amount more for potential services in the future, but just don’t always necessarily go with the rock-bottom lowest rate. There’s sometimes a cost with that.”

Molly Grace, Personal Finance Insider:

“Remember that you’re not just choosing a mortgage lender — you’re also building a homebuying team. To snag the home you want in this competitive market, you need a lender that can move quickly and has good communication with you and your real estate agent.

When I was looking for a house, I was able to text my loan officer (whom my real estate agent recommended) and get quick replies when I had questions or needed an updated preapproval letter for an offer. As you compare lenders, pay attention to how responsive they are, and ask your agent if they have any experience with the lenders you’re considering.”

How can someone decide between a conventional mortgage vs. a government-backed mortgage?

Molly Grace, Personal Finance Insider

“An FHA mortgage is a really helpful option for borrowers with low scores or kind of rocky credit histories. But if you have great credit, you may get a better rate and pay less for mortgage insurance on a conventional mortgage. 

VA mortgages are really great deals. If you qualify for one, you should definitely go for it. You get zero down with no mortgage insurance — plus some of the best rates available.”

Julie Aragon, Aragon Lending Team:

“The most common government loan that’s widely available to almost everyone is the FHA loan. There’s a couple of reasons why somebody would go with FHA instead of conventional one. Their credit is a little on the crummy side, let’s say below 700. You can get conventional with down to a 620 score, but the mortgage insurance gets really expensive. FHA doesn’t discriminate — no matter how perfect or crappy your credit is, the mortgage insurance is the same.”

How can someone know whether they’re financially ready to buy a home?

Lauryn Williams, CFP:

“You should have funds left over after everything is said and done as it pertains to purchasing the home. So if you don’t have an emergency fund plus a down payment, you’re probably not ready to purchase a home. Another thing I think about is credit card debt. While you can be approved for a mortgage with credit card debt and student loans and very little cash on hand, you put yourself in a very risky situation.”

Molly Grace, Personal Finance Insider

“You have to be ready to dedicate a chunk of your budget to homeownership — and I don’t mean your mortgage payment. When you own your house, there’s always something that needs taking care of, especially in the first year. We got to our new house on moving day to find that the A/C was out. We paid $700 to have it fixed.”

Methodology: How We Chose the Best First-Time Buyer Mortgage Lenders for 2023

To choose the top mortgage lenders of August 2023, we looked at four main factors:

• Loan types. Did a lender offer several types of loans to suit customers’ needs, such as conventional loans (including conforming and jumbo) and government-backed loans?
• Customer satisfaction. If the lender appeared in the J.D. Power 2022 Primary Mortgage Origination Satisfaction Survey, we looked at its ranking. If it wasn’t in the survey, then we read online customer reviews.
• Affordability. We looked at lenders’ minimum credit scores and down payment amounts. We also checked whether they offer government-backed loans, which can be more affordable for borrowers with less-than-perfect financial profiles. Finally, we looked at whether it has flexible credit requirements, such as accepting non-traditional credit from borrowers with no scores or considering borrowers with recent negative events on their credit reports.
• Ethics. Many of our top picks received an A- or better from the Better Business Bureau, which measures companies’ trustworthiness.

We also looked closely at lenders with programs specifically for first-time buyers, such as down payment assistance. Most of our top picks have features that benefit first-time buyers, and those that don’t made the list because they thrived in other criteria.

See our full methodology for evaluating mortgage lenders »

Mortgages for First-Time Buyers Frequently Asked Questions

Best Overall for First-Time Homebuyers

Guild Mortgage

If you don’t have a credit history, Guild’s Complete Rate program lets you use rent payment history to apply. It also offers a hybrid closing that lets you sign most of your documentation ahead of time, so you’ll have a quick closing appointment.

It’s also a top lender for customer satisfaction; in 2022, it ranked above the industry average in J.D. Power’s annual Mortgage Origination Satisfaction Study.

Guild has an A+ rating from the BBB.  

Guild Mortgage Review

Best for Down Payment Assistance for First-Time Homebuyers

Bank of America Mortgage

Bank of America offers down payment assistance up to $10,000 and closing cost assistance up to $7,500. This makes it a particularly attractive lender for first-time homebuyers, who often have trouble coming up with enough cash to cover these costs. Additionally, if you’re already a Bank of America customer, you may be able to receive a discount on your origination fee.

Bank of America’s new Community Affordable Loan Solution removes many of the barriers that traditionally have kept people from becoming homeowners. With this mortgage, you can buy a home with no down payment and no closing costs, and use non-traditional credit (such as proof of on-time rent or utility payments) to qualify.

The Community Affordable Loan Solution mortgage is available only in certain markets, including some historically Black and Hispanic neighborhoods in Charlotte, Dallas, Detroit, Los Angeles, and Miami

This lender has an A+ rating from the BBB and ranked above average on J.D. Power’s 2022 Primary Mortgage Origination Satisfaction Study.

Bank of America Mortgage Review

Best for First-Time Homebuyers With Lower Incomes

Chase Mortgage

The DreaMaker mortgage is one of Chase’s strongest offerings, helping middle-to-low-income borrowers get into a home with 3% down and flexible credit requirements. Its Homebuyer Grant program also gives out up to $2,500, or $5,000 to borrowers in low-income or majority-Black areas.

Chase has an A+ rating from the Better Business Bureau and ranked No. 2 in the J.D. Power 2022 Mortgage Origination Satisfaction Study.

Chase Mortgage Review

Best for Veterans Who are First-Time Buyers

Navy Federal Credit Union Mortgage

Navy Federal offers several affordable mortgages beyond its VA loan, including a Homebuyers Choice mortgage, which is a conventional loan with no down payment required and no mortgage insurance. This lender also accepts alternative credit data, such as utility bills.

Navy Federal has an NR (No Rating) from the BBB because it’s in the process of responding to previously closed complaints. It received a high score from J.D. Power, but didn’t rank in the annual customer satisfaction study because it doesn’t meet certain criteria.

You can only become a member of Navy Federal Credit Union if you or your family is affiliated with the military, you are a Department of Defense civilian personnel or contractor, or you live with a Navy Federal member. 

Navy Federal Credit Union Mortgage Review

Best for FHA Loans If You’re a First-Time Buyer

New American Funding

New American Funding allows scores below 580 on its FHA loans and will consider non-traditional credit from borrowers who don’t have a score. You may also be able to get an FHA loan from this lender if you have a recent negative event, such as a bankruptcy or foreclosure, on your credit report.

New American Funding has an A- rating from the BBB.

New American Funding Mortgage Review

Best for Student Loan Borrowers Who are First-Time Buyers

U.S. Bank Mortgage

US Bank’s American Dream Loan comes with a 3% down payment, no mortgage insurance, and it allows non-traditional credit if you don’t have a credit score. You’ll also get up to $10,000 in down payment and closing cost assistance with this mortgage.

This lender is also a good option if you already have an account with US Bank, as you could get up to $1,000 off your closing costs.

US Bank currently has a A- rating from the BBB. It ranked below average in J.D. Power’s annual study.

US Bank Mortgage Review

Best for First-Time Buyers With No Down Payment

Alliant Credit Union Mortgages

This lender’s Alliant Advantage Mortgage lets first-time homebuyers put 0% down with no mortgage insurance, making it an incredibly affordable option for those who qualify. 

Alliant Credit Union has an A+ rating from the BBB.

Alliant Credit Union Mortgage Review

Best Online Lender for First-Time Buyers

Better Mortgage

Better.com charges no lender fees, making it an affordable option for those looking to keep their closing costs down. It also offers a preapproval that takes just a few minutes to complete and gives you the ability to easily see personalized rates without providing contact information.

Better.com has a B rating from the BBB. It ranked below average in J.D. Power’s 2022 customer satisfaction study.

Better Mortgage Review

Best for First-Time Buyers With Low Credit Scores

Carrington Mortgage Services

This lender has some of the best flexible credit options out of all the lenders on this list. With Carrington Mortgage Services, you can get a government-backed mortgage with a credit score as low as 500, or a Carrington Flexible Advantage mortgage with a score as low as 550 or recent negative events on your credit report.

Carrington Mortgage Services has an NR (“no rating”) from the BBB.

Carrington Mortgage Services Review

Best for Low Closing Costs for First-Time Buyers

Third Federal Savings and Loan

Third Federal is a great lender for first-time buyers who have good credit but don’t have a lot of cash to bring to the transaction. With this lender, first-timers can get up to $13,000 in down payment assistance and make down payments as low as 5% without having to pay mortgage insurance.

Third Federal has an A- rating from the BBB.

Third Federal Savings and Loan Mortgage Review

Best for No Private Mortgage Insurance for First-Time Buyers

Truist Home Mortgage

Homebuyers can potentially get a CHIP mortgage from Truist with as little as 0% down if they live in a qualifying area, or 3% down if they aren’t in a qualifying area. Truist doesn’t require private mortgage insurance on these loans. Normally, you have to pay for PMI if you make a down payment below 20%.

Truist has an A+ rating from the BBB and earned an above average score on J.D. Power’s annual study.

Truist Mortgage Review

Best for Low Down Payments for First-Time Buyers

Rocket Mortgage

Rocket Mortgage is one of our favorite mortgage lenders thanks to its convenient online application process and strong customer service. The Rocket Mortgage ONE+ Mortgage, one of the lender’s newer offerings, also makes it a great choice for first-time homebuyers who don’t have a lot of money for a down payment. 

ONE+ is only available to low-to-middle income borrowers in specific census tracts in Atlanta, Baltimore, Chicago, Detroit, Memphis, and Philadelphia. 

Rocket Mortgage has an A+ rating from the BBB and earned the No. 1 spot in J.D. Power’s 2022 customer satisfaction study.

Rocket Mortgage Review

Other Mortgage Lenders We Considered

We evaluated over two dozen mortgage lenders before picking our favorites. Here are the other lenders we looked at and reasons they didn’t make the cut:

• Guaranteed Rate: This lender has an easy-to-use interface and lets you close digitally, but it doesn’t have first-time homebuyer assistance like many of our top picks.
• Pentagon Federal Credit Union: If you have a 650 credit score, PenFed offers $500 to $2,500 in lender credit for all members, depending on how much you borrow. The credit union doesn’t have FHA or USDA mortgages, though.
• USAA: USAA only offers VA mortgages right now.
• LoanDepot: LoanDepot is a solid lender, but it doesn’t have any features that set it apart from the crowd.
• Wells Fargo: The lender does have homebuyer assistance for lower-income buyers. However, Wells Fargo has had multiple public controversies over the past few years regarding claims of racist lending practices, creating fake bank accounts, and charging customers for insurance products they didn’t sign up for.
• Caliber Home Loans: Caliber doesn’t have any first-time homebuyer assistance programs.
• Fairway Independent Mortgage Corporation: This is a strong lender overall, but it doesn’t have products geared toward first-time buyers like some of our top picks.
• Veterans United: Veterans United offers several types of mortgages, not just VA mortgages. It doesn’t have any programs for first-time buyers, though.
• CMG Financial: CMG has unique grant opportunities and mortgages. They could be good options, but these programs aren’t for everyone.
• Freedom Mortgage: This is a good lender if you have a low credit score, but you can’t fill out an application online.
• Flagstar Bank: This lender offers several types of home loans, but none of its features make it stand out.
• Movement Mortgage: Movement Mortgage will process your mortgage within seven business days. It doesn’t have any homebuyer assistance programs, though.
• Ally: Ally has a convenient online process, but it only offers conventional mortgages.
• NBKC Bank: NBKC is an overall good mortgage lender, but you’ll need a good credit score.
• PNC Bank: PNC’s offerings aren’t as strong as what you can get from the lenders we picked.

Additional Resources and Programs for First-Time Homebuyers

You may qualify for a program specific to your state or county. These often come in the form of down payment/closing cost assistance or tax benefits.

You could receive assistance if you buy a home that needs major renovations, including a Fannie Mae HomeStyle loan, Freddie Mac CHOICERenovation loan, FHA 203(k) loan, and the Energy Efficient Mortgage program.

You may qualify for the Department of Housing and Urban Development’s Good Neighbor Next Door program if you’re a teacher, firefighter, law enforcement officer, or emergency medical responder who lives in a “revitalization area.”

Go to the Good Neighbor Next Door website to search for homes in your area. Homes are listed for seven days, and you can purchase one for 50% off the listed price.

The Native American Direct Loan is for Native American military veterans, and it’s issued through the VA. You don’t need money for a down payment, and you won’t pay private mortgage insurance.

Mortgage and Refinance Rates by State

Check the latest rates in your state at the links below. 

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
Washington DC
West Virginia
Wisconsin
Wyoming

Molly Grace

Mortgage Reporter

Elias Shaya

Jr Compliance Associate

Elias Shaya is a junior compliance associate on the Personal Finance Insider team based in New York City.
Personal Finance Insider is Insider’s personal finance section that incorporates affiliate and commerce partnerships into the news, insights, and advice about money that readers already know and love. The compliance team’s mission is to provide readers with stories that are fact-checked and current, so they can make informed financial decisions.
The team also works to minimize risk for partners by making sure language is clear, precise, and fully compliant with regulatory and partner marketing guidelines that align with the editorial team. Elias is the point person for the loans sub-vertical and works with the editorial team to ensure that all rates and information for personal and student loans are up to date and accurate.
He joined Insider in February 2022 as a fellow on the compliance team.
Elias has a Bachelor of Science in International Business from the CUNY College of Staten Island. Prior to joining Insider, he volunteered at the New York Presbyterian Hospital, where he worked with the biomedical engineering department. In his spare time, Elias enjoys exploring new restaurants, traveling to visit his family in Lebanon, and spending time with friends.

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