Best Mortgage Lenders for First Time Home Buyers

Are you looking for a mortgage broker near me? Ready to buy your first home? Have you learned everything you can about how to save for a house? Now it's time to find the best mortgage lenders for first-time buyers.

Once you’ve determined the type and location of the home you want to buy, you don’t want to miss out on finding a reliable mortgage lender that can offer you preapproval. Here’s how to take the next step and find the right lender for you that can help you get the best monthly payments, Freddie Mac, Fannie Mae, fixed-rate mortgages, adjustable-rate mortgages and other services you need.

Best Mortgage Lenders for First Time Homebuyers

• Best for Self-Employed Borrowers: CrossCountry Mortgage
• Best for Online Mortgages: Rocket Mortgage
• Best for Flexible Mortgage Options: Angel Oak Mortgage Solutions
• Best for Comparing Rates: Credible

You might be eager to start house shopping but it’s important you take your time finding a lender. An FHA loan may be a better option for you, but some lenders only offer conventional loans with conventional loan limits. Here are the best mortgage lenders for first-time homebuyers.

1. Best for Self-Employed Borrowers: CrossCountry Mortgage

CrossCountry Mortgage makes it easy for all types of homebuyers to get approved for a mortgage and is one of the best local mortgage lenders. Their flexible requirements can help you get financing, with no employment or income verification and no minimum DTI. CrossCountry Mortgage offers traditional loan terms, as well as more flexible home payment plans with its 40-year loan program.

It's also easier to get approved if you're self-employed, skirting the conventional loan requirements typically required. Tax returns are not required and you'll only need one year of self-employment income history and a minimum credit score of 580. CrossCountry Mortgage can also help you get approved on assets alone, like your bank statements, stocks and bonds, or retirement accounts.

CrossCountry Mortgage is licensed to lend in California, Colorado, Connecticut, DC, Florida, Georgia, Illinois, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Virginia, and Washington.

Rocket Mortgage® offers you a quick and easy way to get preapproved.

When you’re in the research phase, this can be a big help. However, as a first-time homebuyer, you may prefer an in-person application experience.

Still, it can’t hurt to see what type of deal you can get from an online lender. Rocket Mortgage® offers conventional, FHA, USDA and VA loan options with rates that are lower than average.

Loans are available in all 50 states and the District of Columbia.

3. Best for Flexible Mortgage Options: Angel Oak Mortgage Solutions

Angel Oak Mortgage Solutions is a full-service mortgage lender offering traditional and portfolio Non-QM mortgage loans. Angel Oak is licensed in 45 states and offers competitive rates and quick closing times. 

• Available for purchase, cash-out or rate-term refinance
• Primary, second home, or investment properties
• Single-family, townhomes, or condos
• Loan amounts up to $3.5 million
• No tax return options for self-employed borrowers and real estate investors
• 1099 income options available
• Government loan products available (FHA, USDA, VA)
• Competitive rates on conventional purchase and refinance
• Flexible down payment options
• Non-warrantable condos allowed

4. Best for Comparing Rates: Credible

Credible’s user-friendly, online interface allows you to compare personalized loan offers from multiple trusted lenders. This includes mortgages and refinancing, but you can also compare private student loans, student loan refinancing, personal loans and even credit cards. 

Credible’s mortgage marketplace integrates lenders and credit bureaus, so you can compare actual prequalified mortgage rates — not estimates — and terms from multiple lenders in just 3 minutes.

Credible’s licensed loan officers provide concierge service to borrowers all the way to closing — a great perk if you're a first-time homebuyer.

What to Look for in a Mortgage Lender

Lenders must meet all licensing requirements to operate in your state before issuing you a loan. The NMLS Resource Center is a gateway to the Nationwide Multistate Licensing System and Registry (NMLS), which offers information on licensing requirements for each state.

From here, you can also find a link to your state’s website, where you can look up licenses for authorized lenders. Here are some things to look for in a mortgage lender:

• Virtual lender versus brick-and-mortar location. This is simply a matter of preference. Would you rather do everything online or do you like the idea of talking to someone one-on-one every step of the way?
• Credit union versus other lenders. A credit union is a nonprofit institution with the goal of providing loans and banking services to members. This setup you may sometimes get better rates than with another type of institution.
• Existing memberships. Take a look at your current memberships. Your bank may offer a special deal to account holders. If you qualify for a credit union membership through your employer, check into their rates, as well, and compare them to what other lenders are offering.
• Personalized service. A proper mortgage lender should offer personalized service, giving you a loan officer who sees you through the whole process.

It’s also important to try to save on interest rates and fees. Here are a few tips to help save you money as you’re shopping for a loan.

• Mortgage interest rates are calculated as an annual percentage rate or APR. An APR includes the fees the lender charges, while the interest rate is simply the percentage of the principal the lender plans to charge you for the loan, without those extra fees added. Even the smallest percentage you can save upfront can add up over the years you’re paying on the loan.
• Before you start shopping, research interest rates so that you’ll know where an offer stands in comparison to the average. The Consumer Financial Protection Bureau provides a tool that lets you see averages for your state, loan type and credit score level.
• When you close on your house, you’ll see a list of fees, called closing costs. Closing costs are the fees charged by the lender and closing team to process your purchase. Check with each lender to ask what those fees will be, but they often include origination fees, property taxes, primary mortgage insurance, homeowners insurance, title fees, etc.

There are also numerous programs that can help save you money, especially as a first-time homebuyer. For instance, with conventional loans, credit scores will affect the interest rate you get. With this initial purchase, you’ll have access to programs that can help with closing costs and more affordable rates. Look for a lender that works with these programs.

The government can also help you, not only with your 1st purchase but with subsequent purchases. The Federal Housing Authority backs loans to consumers to help keep the economy strong. Shop for a lender that offers FHA loans and price their rates in comparison to what you’d pay for a conventional loan.

If you’re a veteran, you may also qualify for a VA loan, which can offer numerous benefits not available to non-veterans. Since not all lenders offer these options, though, you may have to broaden your search or speak to your mortgage broker.

Here are a few other things to consider as you shop for a loan.

• If you’re working on a short timeline, you’ll want to factor this into your decision. Many lenders will say to allow at least 30 days, but if you’re moving to a new city or the seller wants to finalize things quickly, it could be to your advantage to work with a lender who can speed that process up.
• Some lenders offer instant pre-approval online, while others require a more involved process. Although instant approval can be convenient, there are benefits to being able to drop documents off in person, including the ability to work with someone to answer the question, how much house can you afford?
• One of the best ways to get a feel for a lender’s customer service is to read reviews from existing customers. In addition to being available to borrowers, a lender should also have a reputation for delivering documents on a timely basis and communicating important information.

7 Tips for Finding the Best Mortgage Lenders

You can save money by tracking down the right lender, but it will require a little shopping around. Here are 5 fast tips to help you find the best lenders.

1. Before beginning your search, pull your credit report and know your own credit score. You can obtain 1 free credit report each year from each of the 3 credit bureaus. If your score is below 580, you’ll need a 10% down payment to qualify for an FHA loan.
2. You can choose between a large, corporate lender or a small, local bank. There are also credit unions and online lenders. If you want a more personalized lending experience, go for a credit union or local lender, but make sure you compare their rates to those being offered by larger institutions. Or, if you want to find the best online mortgage lenders, you can do everything remotely.
3. Work with a lender that can assist you in raising your credit score or overcoming certain credit issues. Lenders can use simulators that demonstrate how your credit score will rise if you pay off certain debts or remove those debts from your report. Moreover, the simulator can tell the lender and borrower around how long it will take to reach the target score.
4. In addition to expert recommendations, make sure you check in with local friends and relatives. They’ll be able to help you narrow down the list of lenders in your area.
5. Check the credit rating of any lender you’re considering. Read consumer reviews or even call the customer service line to determine if the company handles its customers well.
6. This is the time to get the best deal on lots of things, including insurance. Research several lenders and narrow it down to the best offer or look at Money.com's Best Home Insurance.
7. The U.S. Department of Housing and Urban Development (USDA) lists mortgage assistance programs by state, which can help you narrow your lender search to those who participate.

Choose the Best Mortgage Lender for You

How to choose a mortgage lender is a serious question, and hopefully, this article has given you some answers. Even a small interest rate savings on the front end can make a difference in the amount you’ll pay over the course of your loan. It’s important to think about the money you’ll save over the course of your time in the house as you shop around.

Compare each lender to make sure you lock in the best terms. As a first-time homebuyer, you’ll qualify for savings that previous borrowers can’t access, so try to take advantage of these programs where you can.

When it comes to borrowing money for a large purchase, you know better than anyone what you can afford and where your credit score and income stand. Pulling your credit report and knowing your creditworthiness will help you find a lender for your situation.

Start with our recommended mortgage lenders for first-time buyers to find a loan for your 1st home today.

Frequently Asked Questions