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First-time home buyers need an edge. Buying a house in 2025 takes a series of savvy financial moves, and you'll need a mortgage lender who can be a true partner in the process. Not a knock-it-out, "Who's next?" provider, but a lender with deep resources and loan options that can make your homeownership dream come true.
Yahoo Finance has analyzed leading mortgage lenders, considering important aspects of the loan process, such as average mortgage rates and total costs, and used this data to create the ultimate "best of" list — without conflicts of interest or compromise.
In this article:
Best first-time buyer lender overall
Truist mortgage
The Yahoo view: Truist distinguishes itself with down payment assistance and lender credits, among other first-time home buyer advantages. However, it has a below-average score for customer satisfaction.
Read our full Truist mortgage review
Key benefits
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A Community Homeownership Incentive Program offers low or no down payments, lender credits, and no mortgage insurance to eligible borrowers in qualifying areas.
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Medical professionals may qualify for lower down payments, waived mortgage insurance, and the exclusion of student loans from debt-to-income requirements with Truist mortgages.
Need to know
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Published mortgage rates default to one discount point to show a more favorable interest rate but can be adjusted to zero points.
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Scores below the average for customer satisfaction, according to the latest J.D. Power Mortgage Origination Satisfaction Study.
Best lender for military-connected borrowers
Navy Federal Credit Union
The Yahoo view: NFCU offers several distinctive benefits, including interest rate protection on VA-backed mortgages for active and former military members. Although it has our highest star rating, it is specifically best for military-affiliated first-time home buyers.
Read our full Navy Federal Credit Union mortgage review
Key benefits
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The Special Freedom Lock allows an interest rate reduction of up to 0.50% if mortgage rates move lower before your loan closing — just one reason why NFCU is on Yahoo Finance's list of the best VA lenders.
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The No-Refi Rate Drop allows you to tap a lower interest rate six months or later after closing — for a $250 fee but without changing your loan terms or taking on additional closing costs as you would with a refinance.
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A rate guarantee states that Navy Federal will match a better mortgage rate offered by a competing lender or pay you $1,000.
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Military Choice loans allow benefits similar to VA mortgages to current and former service members without further entitlements.
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Buy your home through a Navy Federal real estate agent partner and receive $400 or more cash back.
Need to know
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Navy Federal Credit Union home loans are available to members only. Eligibility includes active duty or former members of the armed forces, Department of Defense or National Guard and family or household members.
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Ranks above the average of all the lenders considered in the latest J.D. Power Mortgage Origination Satisfaction Study.
Best lender for many loan options
TD Bank mortgage
The Yahoo view: TD Bank excels in home loan selection with the broad selection of products typical of a depository institution. However, its services are only available in just over a dozen states.
Read our full TD Bank mortgage review
Key benefits
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TD Bank mortgage punches above its weight. Only a short list of mortgage loans is unavailable.
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Offers a comprehensive selection of educational resources for borrowers, including calculators.
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Fee discounts are available to existing TD customers.
Need to know
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Individualized rates are available by filling out a simple online form.
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Serves 15 states (CT, DE, FL, MA, MD, ME, NC, NH, NJ, NY, PA, RI, SC, VA, VT) plus Washington, D.C.
Dig deeper: How to choose a mortgage lender
Best mortgage lender for online resources
Chase
The Yahoo view: Chase Bank offers a wide assortment of home-buying tools, including nearly a dozen calculators, plus videos, checklists, FAQs, and more.
Read our full Chase mortgage review
Key benefits
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Chase has an abundance of online learning resources, which are perfect for guiding a first-time home buyer through a complicated process.
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Chase offers a $5,000 guarantee to close a home loan as quickly as in three weeks under specific guidelines.
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VA loans may be eligible for a credit of up to $2,000, which you can apply to closing costs.
Need to know
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Chase has an above-average rating for customer satisfaction, according to the 2024 J.D. Power study.
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The conventional loan interest rates on the Chase website are enhanced with strict credit standards, including 20% to 25% down payments, one discount point, and borrowers with "excellent" credit. In other words, the rate you earn could be much different.
Best lender for quick loan approval
Better Mortgage
The Yahoo view: Better offers several home-buying services, including rapid loan approval, insurance, real estate attorneys, settlement services, and more, as part of a consolidated digital experience — making it our top online mortgage lender.
Read our full Better Mortgage review
Key benefits
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A "One Day Mortgage" offer promises a loan commitment within 24 hours of submitting paperwork and a rate lock.
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Better Mortgage claims to close loans "17 days faster than the industry average."
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A full-service digital experience includes loans, insurance, real estate attorneys, and settlement services.
Need to know
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Published interest rates are shown for borrowers with a 20% down payment, who pay closing costs with cash, have a DTI below 35%, and a credit score of 760 or higher.
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Mortgage rates are also lowered with two or more discount points.
Best lender for customer satisfaction
Bank of America
The Yahoo view: Best-in-class for customer satisfaction, Bank of America also offers a full suite of loan products.
Read our full Bank of America mortgage review
Key benefits
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Bank of America is near the top of customer satisfaction rankings in the latest J.D. Power survey.
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Offers grants up to $7,500 in closing costs and down payment assistance up to $10,000 for qualified buyers in many, but not all, states.
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Existing customers may qualify for an origination fee or interest rate deduction. You'll likely have to sign up to draft your mortgage payments from an account to qualify.
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A home buyer program for medical professionals allows borrowers to make lower down payments and exclude student loans from debt limits. Residents and fellows can also close on a loan 90 days before starting a new position.
Need to know
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Bank of America's Real Estate Center features home listings, including existing and new construction properties — as well as bank-owned houses.
Best lender for FHA loan borrowers
Pennymac
The Yahoo view: Pennymac is a major lender for loans insured by the FHA (Federal Housing Administration) and is well-equipped to guide first-time homebuyers through the government loan process.
Read our full Pennymac mortgage review
Key benefits
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Pennymac is the second-largest FHA lender by loan volume in the nation — and is rated by Yahoo Finance as the best overall FHA lender.
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Offers a rate buydown that lowers your interest rate by 1% for one year.
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Show sellers you are a serious and qualified buyer with Pennymac's BuyerReady Certification. You will also receive a $1,000 credit to apply to your closing costs.
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Use a real estate agent endorsed by Pennymac and get from $350 to $9,500 cash after closing.
Need to know
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Pennymac has a well-below-average rating for customer satisfaction, according to the 2024 J.D. Power Mortgage Origination Satisfaction Study.
Best lender for first-time home buyer grants and assistance
Citibank mortgage
The Yahoo view: Citibank is a legacy mortgage loan lender with grants up to $7,500 to apply to closing costs.
Read our full Citibank mortgage review
Key benefits
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Citi offers a 3% down payment program with no private mortgage insurance (PMI) requirement to borrowers in specified U.S. cities.
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Citi’s Lender Paid Assistance Program can cover up to $7,500 in closing costs to qualified buyers.
Need to know
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Advertised mortgage rates include substantial discount points and undisclosed credit score requirements.
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A Yahoo Finance analysis of HMDA data revealed that Citi charged well-below-median mortgage interest rates in 2023 with average loan costs.
Best lender for online and face-to-face service
Rate
The Yahoo view: An early-mover in digital mortgages, Rate (previously Guaranteed Rate) offers face-to-face service in many markets but is rated well below J.D. Power’s average in customer satisfaction.
Read our full Rate (Guaranteed Rate) mortgage review
Key benefits
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For a personal service option, Rate has hundreds of branch locations across the nation.
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A "Same Day Mortgage" promises loan approval — but not loan funding — within 24 hours of locking an interest rate and submitting financial documents.
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Offers non-qualified mortgages for self-employed borrowers or those who want to qualify using alternative credit standards.
Need to know
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Advertised rates factor in more than one discount point, are based on a 20% down payment, and a FICO score well above the national average.
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Rate scores well below average in customer satisfaction, according to the latest J.D. Power Mortgage Origination Satisfaction Study.
Read more: How to get a mortgage when you're self-employed
Best lender for underserved borrowers
U.S. Bank mortgage
The Yahoo view: Has made a commitment to offer down payment assistance and closing costs credits to advance homeownership for minorities.
Read our full U.S. Bank mortgage review
Key benefits
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Has committed $100 million over five years to offer up to $12,500 in down payment assistance and up to an additional $5,000 in a lender fee credit to advance homeownership for minority families.
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Existing U.S. Bank customers may be eligible for a credit against closing costs up to $1,000.
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A prequalification process is free, "takes five minutes," and does not impact on your credit.
Need to know
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A loan application can be made in a loan officer's office, by phone or online.
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U.S. Bank's mortgage rates, as published on its website, look appealing. However, the conventional loan rates shown require a down payment of 25% and a FICO score of 740 or better. That's well above the national average credit score of 715.
Best types of mortgages for first-time home buyers
Fannie Mae HomeReady loans
Many mortgage lenders offer conventional loans backed by Fannie Mae. With the HomeReady program, you only need a 3% down payment and 620 credit score. You also might qualify with a debt-to-income ratio as high as 50%.
You must finish a home-buyer education course to qualify for this program, which is often useful for first-time buyers.
Freddie Mac Home Possible loans
Conventional loans backed by Freddie Mac also require a 3% down payment and an online home-buyer education course. The main differences from the HomeReady program are that Home Possible loans require a 660 credit score and a 45% DTI ratio for buying a house.
FHA loans
FHA loans can be great for first-time home buyers because you can qualify with a 580 credit score and 3.5% down payment. (You can even get an FHA loan with a score as low as 500, but you'll need 10% down in this case.)
VA loans
VA loans are for eligible active military personnel, veterans, and their families. They're great mortgages for getting your foot in the door of homeownership because you don't need a down payment. The U.S. Department of Veterans Affairs also doesn't set a minimum credit score, so you can shop for lenders that accept low scores if that's an issue.
USDA loans
You also don't need a down payment for USDA loans. These mortgages are for low-to-moderate-income borrowers buying in rural and suburban areas. As with VA loans, the U.S. Department of Agriculture doesn't set a minimum credit score, so the credit score needed will depend on the lender.
Lenders that did not make our best first-time home buyer lender list
We seriously considered the following mortgage lenders with first-time home buyer loans for our best-of list, but they weren’t quite as strong as our top picks:
First-time home buyer mortgage lenders: FAQs
What loan option is strongly recommended for first-time home buyers?
An FHA loan is often the best type of loan for first-time home buyers because you only need a 580 credit score and a 3.5% down payment (or a 500 credit score with 10% down). It also allows borrowers with more debt to buy a home than many other types of mortgages. These features are great for first-time buyers who may not have much money saved or haven't had time to build up their credit yet. However, a conventional loan could be good if you're a first-time buyer with a strong credit score and lower debt levels, because many lenders only require 3% down.
What is the best option for first-time home buyers?
First-time home buyers should look into three government-backed home loans: FHA, VA, and USDA loans. FHA loans are geared toward people with higher debt levels and lower credit scores. VA loans are for military-affiliated buyers who don't have any money for a down payment. USDA loans are for lower-income homeowners buying in rural areas and also don't have any money for a down payment. But conventional loans are still great mortgage options for first-time buyers with 620 credit scores and 3% down.
What bank is best for a first-time home buyer?
The best bank (or mortgage lender) will depend on your situation, but we chose Truist Bank as the best lender for first-time home buyers overall. It offers benefits for first-time buyers such as down payment assistance and lender credits.
How much do most first-time home buyers put down?
You can put down as little as 0% as a first-time buyer getting a VA loan or USDA loan. You can also put down 3.5% for an FHA loan. Depending on the lender and how strong your finances are, you may be able to put down as little as 3% with conventional mortgages.
What mortgage term is best for first-time buyers?
A 30-year mortgage term is usually best for first-time buyers. All common types of mortgage loans offer a 30-year option, and it has lower monthly payments than, say, a 15-year mortgage.
What is the ideal credit score for a first-time home buyer?
As a first-time home buyer, a 620 credit score is preferable. You can qualify for a conventional mortgage with most lenders with a 620 score. However, FHA loans are often good deals for first-time buyers who might not have had time to build strong credit yet — FHA loans only require a 580 score.
What is the easiest type of mortgage to get approved for?
An FHA mortgage is usually the easiest type of loan to get approved for because it has relatively lenient credit score requirements. But if you're affiliated with the military and are eligible for a VA loan, you'll likely be approved because the VA doesn't set a minimum credit score — the requirement varies by mortgage lender.
Methodology:
Yahoo Finance reviews and scores mortgage lenders with quintile scoring in five primary categories: 1) Interest rates. Using 2023 Home Mortgage Disclosure Act data comprised of 10 million home loan applications, we score mortgage lenders on issued mortgage rates below or above the annual median of reporting lenders. 2) Affordability. A measure of loan product availability and the willingness of a lender to offer government-backed loans, low down payments, down payment assistance, and consideration of nontraditional credit. 3) Loan costs. HMDA data is again analyzed, and lenders are rated based on total loan costs compared to the annual median. 4) Rate transparency. The ability of a website user to obtain a mortgage interest rate estimate. We score lenders based on whether rates are enhanced with discount points or high credit score requirements, disclaimers revealing rate assumptions, sample advertised rates, and whether adjustable or no discount point rate estimates are available. 5) Online features. An analysis of the educational material, calculators, and additional resources available to users.
Review of Nationwide Multistate Licensing System (NMLS) data on regulatory actions can trigger a penalty to the score of any lender with a consumer mortgage-related administrative or enforcement action within the past five years.
Advertisers or sponsorships do not influence ratings.
Editorial disclosure for mortgages:
The information in this article has not been reviewed or approved by any advertiser. The details on financial products, including interest rates and fees, are accurate as of the publish date. All products or services are presented without warranty. Check the lender's website for the most current information. This site doesn't include all currently available offers.
This article was edited by Laura Grace Tarpley.
