Best mortgage lenders for first-time buyers in July 2024

Ally offers a simple, 100% online application process that takes as little as 15 minutes to complete. It also states that its mortgages typically close up to 10 days faster than the industry average, though this will depend on your unique situation.

Unlike some lenders, Ally charges no lender fees, including no application, origination, underwriting or processing fees. This can help keep your closing costs as low as possible. Additionally, eligible borrowers purchasing homes in the Charlotte, North Carolina; Detroit; or Philadelphia metro areas could qualify for the Ally Home Grant. This provides $5,000 to put toward your down payment or closing costs — or both. To qualify, your annual household income must be less than or equal to the 100% area median income (AMI).

Keep in mind that Ally only offers conventional fixed- and adjustable-rate mortgages (ARMs), including conforming loans as well as nonconforming jumbo loans. If you’re interested in a government-backed loan, you’ll have to consider other lenders. This lender’s interest rates can also be higher compared to some lenders if you don’t opt to buy discount points.

• Interest rates: Below national average.
• Max DTI ratio: Up to 50% (depending on loan program).
• Perks: Quick online application process, no lender fees and Ally Home Grant.
• Preapproval: As little as 3 minutes.
• Time to close: A few weeks to a few months (depending on your situation).

In addition to offering a convenient online mortgage process, Better can provide a loan commitment letter and a locked interest rate within 24 hours. You could also get up to $2,000 in lender credits to save money on closing costs if you’re matched by Better with a participating real estate agent. To be eligible, you must purchase a home in one of the following states:

• AZ
• CA
• CO
• DC
• FL
• GA
• IL
• MD
• MI
• NC
• NY
• PA
• SC
• TX
• VA
• WA

Plus, you could get another $100 through the Better Price Guarantee if you have a valid competitor loan estimate and send it to Better for a price match within one business day. Better will either do better than the competitor’s offer by $100 or send the $100 to you directly.

Keep in mind that Better offers a variety of mortgage options, including conventional loans as well as mortgages backed by the Federal Housing Administration (FHA) and Department of Veterans Affairs (VA). However, it doesn’t provide loans backed by the U.S. Department of Agriculture (USDA).

Additionally, while Better allows you to break your rate lock with no fees, you won’t be able to lock another rate with this lender on the same property for 30 days. This means there’s no float-down option, which is the ability to lower your rate after you’ve locked it if mortgage rates were to fall.

• Rates: Below national average.
• Max DTI ratio: 50%.
• Perks: Rate lock within 24 hours, no lender fees, lender credits for closing costs and Better Price Guarantee.
• Preapproval: As little as 3 minutes.
• Time to close: Typically 3 to 6 weeks after locking your rate.

If you have a modest income and are looking to buy your first home, Bank of America could be a good choice for a mortgage. It offers two mortgage grant programs to help low-income borrowers become homeowners, neither of which require repayment.

First is the America’s Home Grant, which provides a lender credit of up to $7,500 to help you either permanently buy down your rate or cover non-recurring closing costs like recording fees and insurance. Second is the Down Payment Grant, which offers up to 3% of the home purchase price (up to $10,000) to use for a down payment in qualifying areas.

Bank of America offers a variety of mortgage options, including an Affordable Loan Solution mortgage that only requires 3% down as well as FHA and VA loans. However, it doesn’t provide USDA mortgages, and it doesn’t disclose its preapproval or closing timelines.

• Interest rates: Below national average.
• Max DTI ratio: No maximum for some loan types (55% for FHA loans).
• Perks: America’s Home Grant, Down Payment Grant and potential interest rate or origination fee reductions for Preferred Rewards members.
• Preapproval: Does not disclose.
• Time to close: Does not disclose.

Chase promises to close your loan on time if you meet certain conditions, which includes responding to all requests from your loan officer within two business days. If you close late, and it’s Chase’s fault — so not your fault or a third party’s — Chase will give you $5,000. This could make this lender a good choice if you need to avoid delays, such as if you have to move out of your old residence by a certain date.

Additionally, eligible borrowers could qualify for the Chase Homebuyer Grant to help them save $2,500; $5,000 or $7,500 on their closing costs. To qualify, you must apply for a DreaMaker, Standard Agency, FHA or VA home loan that will be used to purchase a primary residence in select areas of the U.S. Income limits and other requirements might also apply.

You could also get a 0.125% to 0.50% interest rate reduction through the Relationship Pricing Program. To qualify, you must either open or already have a Chase deposit or investment account. Note that the amount of the discount depends on whether your deposit or investment account is new, the balance in the account and your mortgage loan amount.

Also keep in mind that Chase doesn’t disclose its borrower requirements online, so you’ll have to contact the lender if you have questions regarding eligibility for a mortgage.

• Interest rates: Below national average.
• Max DTI ratio: Does not disclose.
• Perks: Chase Homebuyer Grant and Relationship Pricing Program.
• Preapproval: Does not disclose.
• Time to close: As soon as 21 or 30 calendar days after the receipt of a complete application package (depending on loan type and if inspection is required).

In addition to VA loans, Navy Federal Credit Union (NFCU) provides 0% down payment options through its Military Choice Home Loan and Homebuyers Choice Loan programs. Military service members, veterans and reservists can qualify for the Military Home Choice Loan while the Homebuyers Choice Loan is geared toward first-time buyers. Conventional fixed-rate loans and ARMs are also available from NFCU, though you’ll have to consider other lenders if you’re interested in an FHA or USDA loan.

On top of a variety of loan alternatives, NFCU offers several other perks to homebuyers, including:

• No PMI: All NFCU mortgages come with no private mortgage insurance (PMI), regardless of loan program and your down payment amount.
• No-refi rate drop: You can reduce your rate within six months of closing without having to refinance and for a fee of only $250.
• Special Freedom Lock: You can re-lock your rate twice within seven calendar days of closing at no extra cost (note that you must request the Special Freedom Lock option during the initial lock request).
• Rate Match Guarantee: If you find a better rate with a competitor, NFCU will either match it or give you $1,000.
• RealtyPlus cash back: You can get $400 to $9,000 cash back if you sign up for NFCU’s Realty Plus program to connect to a real estate agent and close on a home.

Note that you must be an NFCU member to apply for a mortgage. Membership is open to service members in all branches of the U.S. military (including active-duty and retired members as well as veterans), Department of Defense civilians and their families.

• Interest rates: Below national average.
• Max DTI ratio: Does not disclose.
• Perks: Variety of 0% down payment loan programs, Rate Match Guarantee, RealtyPlus program, Special Freedom Lock, no-refi rate drop and no PMI.
• Preapproval: Instantly, in some cases.
• Time to close: Typically 30 days after receiving all required documentation.

Rocket Mortgage was far ahead of its competitors in creating a fully online home loan process. In addition to this convenience, the free Rocket Rewards program offers closing cost discounts for learning about the mortgage process. This program allows you to read articles, use calculators, work on your mortgage application and more to earn points that you can redeem for credit toward your closing costs.

Additionally, Rocket Mortgage offers a step beyond traditional preapproval with its Verified Approval program. To qualify, underwriting must review and confirm your credit, income and assets. Afterward, Rocket Mortgage guarantees that your loan will close due to this review — and if not, you’ll get $1,000. Plus, this lender gives you up to 90 days to shop for a home with a locked interest rate through the RateShield program, which is available on 30-year conventional, FHA and VA loans.

Keep in mind that unlike some competitors, Rocket Mortgage doesn’t offer USDA loans. It also doesn’t provide any down payment or closing cost assistance. However, it will cover 2% of your down payment through its ONE+ program if you meet income, credit and debt requirements and also make a down payment of 1%.

Rocket Mortgage also accepts outside down payment assistance from other institutions on your behalf if you’ve been approved — though only down payment grants and loans are accepted.

• Rates: Below national average.
• Max DTI ratio: Does not disclose.
• Perks: Rocket Rewards program, Verified Approval (with $1,000 closing guarantee), RateShield program and ONE+ program.
• Preapproval: Does not disclose.
• Time to close: Does not disclose.

On top of providing conventional mortgages as well as FHA, USDA and VA loans, PNC Bank also offers the PNC Community Loan and Medical Professionals mortgage. The PNC Community Loan allows eligible buyers to make down payments as low as 3% with no PMI with minimal cash reserve requirements. The Medical Professional mortgage is geared toward interns, residents, fellows and doctors who completed their residency in the last five years, with loan amounts up to $1 million and no PMI.

This lender also offers grants of up to $5,000 to help qualifying borrowers cover their closing costs, and it provides a variety of resources to help you through the homebuying process. This includes the ​​Home Insight Planner — a detailed planning tool to help you figure out how much home you can really afford after factoring in your unique personal expenses, not just the debt and housing expenses that lenders generally look at.

Note that while you can begin the application process online, you’ll need to work with a local mortgage loan officer to proceed. You can also discuss your options with a Home Lending Center representative.

• Interest rates: Below national average.
• Max DTI ratio: Does not disclose.
• Perks: Variety of loan options (including low-down-payment options and Medical Professional mortgage), closing cost grants, Home Insight Planner and other borrower education resources.
• Preapproval: Does not disclose.
• Time to close: Does not disclose.