Sidney Keith
Written by Sidney Keith
Last updated: Mar.08,2022

Buying your first home is special but it is also expensive, hence it is a financial decision that should be taken after thorough research. A first home buyer should analyze all the good options that you have, so you don' t feel overwhelmed by the entire process that goes into buying your first house. The goal is to opt for a mortgage lender that aims to aid you in the entire process and makes things easier for you.

Some want to buy their first home for the family; some want it to rent it out for passive income, while some just want home equity in their investment portfolio. In all these cases having equity in a home gives your portfolio a steady structure as it is considered a safe investment. One of the reason why you' ll see the most from silicon valley investing in home equity and making it a major share of their portfolio.

We have picked and listed out some of the best lending programs in the US for you. Some of these are specifically designed for first home buyers which consist of the elements of down payment assistance and custom mortgage programs.

Best Lenders for First Equity Mortgage

  1. 1. Zillow Home Loans Review

In affiliation with Zillow Group, Zillow home loans is a direct mortgage lender offering some of the best mortgage programs for first-time homebuyers. Zillow Home Loans are almost entirely digital, which is a plus point in the context of the current world where minimum physical contact is being endorsed. Zillow Group has invested time and resources for making the process of applying for the home loan as easy as possible through their digital portal. One can simply apply for the loan or refinance by visiting the digital portal and filling out the form with the required details. After analyzing Zillow home loan reviews given by their customers, one thing can be said with certainty that the Zillow group is investing highly in customer care and putting in resources to improve the overall experience for the customer buying their first homes.

The loan options being offered by Zillow Home Loans are limited (FHA and VA loans) compared to the wide range of loans offered by the lenders in competition, but the interest rates that Zillow offers are very competitive which is an essential factor when financing your first home. Zillow home loans focus on making the process easier for the customer and have dedicated loan officers that assist you through the process and make the journey to your first home seamless.

Pros:

  • A process made easier with the help of a loan officer constantly guiding you.
  • Digital portal with access to everything online.
  • Competitive interest rates.

Cons:

  • No business from the physical branch so you cannot apply in person.
  • The rates are not visible on their online portal.
  • No jumbo loans or USDA loans.
  1. 2. Bank of America Review

Bank of America offers some of the best programs available for first home buyers all across the US in over 50 states. The bank has over 36 branches hence making it much more accessible in comparison to the competition. The program will favor you the most if you are already on the "Preferred Reward Client" list of the Bank of America, as you can get a discount of over 600$ on your loan origination fee, although the bank requires a pretty high credit score and conducts a very thorough credit inquiry before you can be considered qualified for the mortgage.

Pros:

  • Offers a wide range of mortgages, including HELOCs.
  • Offers additional loans, grants, specifically catering to first-time home buyers.
  • Offers closing cost assistance programs.
  • Has a rating of an A+ rating from the BBB.

Cons:

  • No USDA loans, home equity loans, reverse mortgages, or construction loans.
  • Strict policy for the requirement of credit rating as no other form of credit is accepted.
  1. 3. Guild Mortgage

Guild Mortgage is another very good option for people looking to finance their first homes. The highlight of this option is that Guild mortgage may give you a loan or grant for a down payment. Offering mortgage programs in over 32 states across the US makes it one of the most accessible options. What sets Guild mortgage apart from our earlier option is the acceptance of alternative forms of credit data, such as utility bills, in case your credit score does not match the required criteria.

Pros:

  • Offers a wide range of mortgages, including HELOCs.
  • Assistance with the payment of Down payment aiding the customers with low income.
  • Allows and accepts alternative forms of credit.
  • Availability of online application.
  • A- rating from the BBB.

Cons:

  • The loan options are limited, as there are no home equity loans, HELOCs, or construction loans.
  • People in New Jersey or New York cannot access these programs.
  1. 4. NKBC Mortgage

A very strong candidate on the list of lenders for new home buyers is New American Funding Mortgages. It has some of the most popular loan choices by the name of buydown loan and I CAN loan, which give the consumer the liberty to customize the mortgage according to his own needs.  New American Funding Mortgages provides the services in over 50 states and is among the most popular choices for people deciding to apply for home loans. There is a possibility of a discount on the interest rates being offered by NKBC if you are an Executive Costco member.

Pros:

  • The customer can speak directly to an expert through the chat box available on the online portal. The expert this there to answer any questions that the buyer might have about the mortgages or the process in general.
  • Discounts for Executive Costco members.
  • A+ rating from the BBB.

Cons:

  • The loan options are limited, as there are no homes equity loans, HELOCs, construction loans, or reverse mortgages.
  • There are no options for alternative forms of credit.
  • There are other lenders in the market such as "SunTrust" and "Caliber Home Loans", with some of the best home loan programs, but our list is based specifically on the banks that offer programs catering to first-time home buyers.
Here is the minimum credit score and down payment about above three mortgage loans.

What Type of Loan is Best for a First-time Homebuyer?

For first-time buyers, an FHA mortgage in most cases is the best choice because this option is pretty flexible for someone whose credit score is on the lower side and higher debt-to-income ratio than with other home loans. These are the reason why FHA is the best option for middle-class families which don' t have their finances figured out.

Although the best option for you can vary with the kind of needs that you have paired with your financial position. If your credit rating is good enough and the debt-to-income ratio is on the lower side, there is a good chance that you might qualify for competitive terms on a conventional mortgage, this includes both conforming and jumbo mortgages for borrowing larger amounts. If you are an active military member or veteran, you can buy a home with no down payment with a VA mortgage. A USDA mortgage is also good for buyers who live in rural areas and earn a low-to-moderate income.

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