How Does Pre-Qualifying for a Mortgage Work?

Mortgage pre-qualification is a preliminary way of seeing whether you’re likely to qualify for a mortgage, how much you might qualify for, and what interest rate you might qualify for. Depending on the lender, pre-qualification may or may not require a hard inquiry on your credit report. However, it generally requires less detailed information than pre-approval . For example, you won’t have to provide proof of income or assets. So while the process may be quicker, it isn’t necessarily as accurate.

How Long Does It Take to Buy a House?

The amount of time it takes to buy a house depends on your local housing market, your financial situation, and your lender. The average time to buy a home is around 45 days, but it could vary significantly. For example, many lenders advertise fast closing times. However, if the lender has a difficult time underwriting your loan or there are problems with the home, it could take much longer.

Do You Have to Have a Down Payment to Qualify for a Mortgage?

Depending on the type of mortgage you get, you may or may not need a down payment . Conventional loans require a down payment of at least 3%. There are other loan types—including a USDA loan or VA loan—that don’t require a down payment. And on the other end of the spectrum, depending on your credit score, an FHA loan may require a down payment as high as 10%.

How Does Your Credit Score Affect Home Buying?

Your credit score can affect your home-buying experience in a couple of different ways. First, your credit score determines whether you can get a mortgage at all. Most loan types have a minimum credit score that borrowers need to qualify. Additionally, your credit score will impact the interest rate you’re eligible for. The best interest rates are generally only available to borrowers with good or excellent credit . Meanwhile, borrowers with fair credit, even if they do qualify for a loan, may pay a higher interest rate.

Best Mortgage Lenders for First-Time Homebuyers

Get a little help with your first mortgage

Erin Gobler

Updated May 27, 2023

Reviewed by

Cierra Murry

Fact checked by

Lars Peterson

We independently evaluate all recommended products and services. If you click on links we provide, we may receive compensation. Learn more.

When you’re buying a home for the first time, it’s important to choose the right mortgage lender. You need a mortgage lender that offers the type of loan you need at a monthly payment, interest rate, and down payment that works for your budget. Additionally, the right lender can help the entire home-buying process go more smoothly.

We know it can be challenging to know which lender is right for you, so we’ve rounded up a list of the best mortgage lenders for first-time homebuyers.

Best Mortgage Lenders for First-Time Homebuyers

Best for a Wide Range of Borrowers: Movement Mortgage
Best for Lower-Income Buyers: PrimeLending
Best Big Bank Lender: Bank of America
Best for Customer Service: Cherry Creek Mortgage
Best for a Quick Closing: CrossCountry Mortgage
Best for Veterans: Veterans United

Best for a Wide Range of Borrowers : Movement Mortgage

Movement Mortgage

Online Application: Yes
Max Debt-to-Income: 50%
Loan Types: Conventional, FHA, USDA, VA, jumbo, Fannie Mae HomeReady, new construction, renovation

Get a Quote

Pros & Cons

Pros

Many loan types to choose from
Highly rated customer service
Does business in all 50 states

Cons

Interest rates not listed on website
No mortgage pre-qualification
No home equity loans

Why We Chose It

Movement Mortgage has plenty of features that make it a great lender for first-time borrowers. First, this lender offers a wider variety of loan types than many others, including conventional loans, government loans, jumbo loans, and construction loans.

Movement Mortgage also has a streamlined mortgage process. You can easily complete your application online, and the company uses a “6-7-1” process: You can get pre-approved within six days, have your loan processed within seven days, and close on your loan within one day.

While Movement Mortgage tries to stick to its 6-7-1 schedule whenever possible, there may be situations outside the company’s control that make it impossible to do so.

Qualifications

Minimum credit score/range: 580+ for government-backed, 620+ for conventional
Minimum income: Not disclosed
Maximum DTI ratio: 50%
Cash reserve requirements: Not disclosed
Membership required?: No
States available: All 50 states

Best for Lower-Income Buyers : PrimeLending

PrimeLending

Online Application: Yes
Max Debt-to-Income: 50%
Loan Types: Conventional, FHA, USDA, VA, jumbo, Fannie Mae HomeReady, Freddie Mac Home Possible, new construction, renovation

Get a Quote

Pros & Cons

Pros

Float-down interest rate lock-in
Many loan types to choose from
Several down payment assistance programs

Cons

Interest rates not listed on website
No home equity loans or lines of credit
Not licensed in most states

Why We Chose It

PrimeLending is a great option for lower-income buyers thanks to a variety of loan programs with down payment and closing cost assistance. It offers several government loan programs that don’t require down payments as well as other options not listed on its website.

PrimeLending also offers one of the most attractive interest rate offers of any lender. Like most lenders, PrimeLending allows you to lock in your interest rate. But thanks to its float-down option, if interest rates drop significantly after you’ve locked in your rate, you’ll be able to request to have your rate reduced.

Qualifications

Minimum credit score: Not disclosed
Minimum income: Not disclosed
Maximum DTI: 50%
Cash reserve requirement: Not disclosed
Membership required?: No
States available: Alabama, Arizona, Arkansas, California, the District of Columbia, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Oregon, Rhode Island, Texas, Vermont, Washington, West Virginia

Best Big Bank Lender : Bank of America

Online Application: Yes
Max Debt-to-Income: 43%
Loan Types: Conventional, FHA, VA, jumbo, Affordable Loan Solution, doctor loans

Get a Quote

Pros & Cons

Pros

Above-average customer service, per J.D. Power
Loan pre-qualification available
Down payment and closing cost grants

Cons

No USDA loans or renovation loans
Little transparency on lender fees
Branches not available in all states

Why We Chose It

Bank of America is one of the largest national banks, which makes it an excellent choice for first-time borrowers all over the country. The company shares its interest rates on its website, making it easy to shop around. Additionally, the company has an above-average customer satisfaction ranking from J.D. Power.

Bank of America also shows a commitment to helping low-income borrowers buy homes. The company can help match buyers with grants of up to $7,500 for closing costs and $10,000 for down payments. Additionally, Bank of America’s First-Time Homebuyer Online Edu-Series offers education for first-time buyers.

Qualifications

Minimum credit score: Not disclosed
Minimum income: Not disclosed
Maximum DTI: 43%
Cash reserve requirement:
Membership required?: No
States available: All 50 states

Best for Customer Service : Cherry Creek Mortgage

Online Application: Yes
Max Debt-to-Income: Not disclosed
Loan Types: Conventional, FHA, USDA, VA, jumbo, Fannie Mae HomeReady, new construction, renovation

Get a Quote

Pros & Cons

Pros

Many loan types to choose from
Highly rated customer service
Physical branches available in some states

Cons

Interest rates not listed on website
Loans not available in all states
No home equity loans or lines of credit

Why We Chose It

Cherry Creek Mortgage makes our list of the best lenders for first-time buyers partially because of its excellent customer service. In fact, it had the best customer satisfaction of any other company in our survey. There are several ways to get in touch with the company, including phone, email, and your personal loan officer.

Another perk of Cherry Creek Mortgage is the variety of loans available. Whether you’re looking for a traditional home loan, a government-backed loan, or one that doesn’t require a down payment, there’s a good chance you can find what you’re looking for with Cherry Creek Mortgage.

Qualifications

Minimum credit score: 580 government backed; 620 conventional
Minimum income: Not disclosed
Maximum DTI: Not disclosed
Cash reserve requirement: Not disclosed
Membership required?: No
States available: Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Washington, West Virginia, Wisconsin, Wyoming

Best for a Quick Closing : CrossCountry Mortgage

CrossCountry Mortgage

Online Application: Yes
Max Debt-to-Income: 45.9%
Loan Types: Conventional, FHA, USDA, VA, jumbo

Get a Quote

Pros & Cons

Pros

Closings in as few as 21 days
Loans available in all states
Physical branches with personal loan officers

Cons

Fewer loan options than most competitors
Interest rates not listed on website
Below average customer satisfaction, per J.D. Power

Why We Chose It

If you want the fastest possible closing for your home purchase, CrossCountry Mortgage might be the right choice for you. The company offers a closing process where, as long as you submit your proof of income, assets, and credit on the required timeline, you can close on your loan in as little as 21 days.

Another advantage of CrossCountry Mortgage is its wide availability. The company offers home loans in all 50 states and Washington D.C. And depending on where you live, you may have access to a physical branch where you can meet with a loan officer in person.

Qualifications

Minimum credit score/range: 620
Minimum income: Not disclosed
Maximum DTI ratio: 45.9%
Cash reserve requirements: Not disclosed
Membership required?: No
States available: All 50 states

Best for Veterans : Veterans United

Online Application: Yes
Max Debt-to-Income: 50%
Loan Types: Conventional, FHA, USDA, VA

Get a Quote

Pros & Cons

Pros

VA home loan experts
Free credit counseling services
Above-average customer service, per J.D. Power

Cons

Limited loan types available
Only serves veteran and military families
No adjustable-rate loans

Why We Chose It

Veterans United is an excellent choice for first-time buyers who are current or former military members. The company specializes in offering VA loans, making them experts on the topic. These loans come with perks such as no down payments, no private mortgage insurance, flexible credit, and more.

And because Veterans United specializes in helping military families, they also offer other services. For example, if you want to apply for a VA loan but don’t have the credit history to do so, Veterans United will give you free credit counseling services to help get you in financial shape to buy a home.

Qualifications

Minimum credit score/range: 620
Minimum income: Not disclosed
Maximum DTI ratio: 50%
Cash reserve requirements: Not disclosed
Membership required?: No
States available: All 50 states

Final Verdict

There’s not necessarily one right mortgage lender for everyone, but there are some that really stand out as among the best. Each of the lenders on our list is a great choice for a different type of first-time home buyer. Whether you’re looking for excellent customer service or a fast closing, you can find a lender on this list that works for you.

And when it comes to a lender that we think will work for most customers, Movement Mortgage is one of the best. The company offers many loan types for customers nationwide, highly rated customer service, and fast closing times.

Compare the Best Mortgage Lenders for First-Time Homebuyers

Name	Online Application	Max. Debt-to-Income	Loan Types
Movement Mortgage	Yes	50%	Conventional, FHA, USDA, VA, jumbo, Fannie Mae HomeReady, new construction, renovation
PrimeLending	Yes	50%	Conventional, FHA, USDA, VA, Fannie Mae HomeReady, Freddie Mac Home Possible, new construction, renovation
Bank of America	Yes	50%	Conventional, FHA, VA, jumbo, Affordable Loan Solution, doctor loans
Cherry Creek Mortgage	Yes	Not disclosed	Conventional, FHA, USDA, VA, jumbo, Fannie Mae HomeReady, new construction, renovation
CrossCountry Mortgage	Yes	45.9%	Conventional, FHA, USDA, VA, jumbo
Veterans United	Yes	50%	Conventional, FHA, USDA, VA

Guide to Choosing a Mortgage Lender for First-Time Homebuyers

How to Compare Mortgage Lenders

Choosing the right mortgage lender can feel overwhelming when there are so many options. Here are a few things you can look for to help you choose the best one for you:

Loan types: It’s important to find a lender that offers the type of loan you want. While just about any lender will offer conventional mortgages, you may need to be more selective if you want a government-backed loan or specialty loan like the Fannie Mae HomeReady.
Interest rates: Your interest rate determines how much you’ll pay for your interest in the long run. Shopping around with several lenders and getting rate quotes can help you find the best deal
Loan terms: Most mortgages are 30-year fixed-rate loans. And while that works for many people, you can also choose a shorter loan term or an adjustable-rate loan. Make sure the lender you’re considering offers a loan term that works with your plans.
Customer service: If customer service is important to you, be sure to pay attention to what other customers have to say. Choosing a company with highly rated customer service ensures you’ll be able to reach the company when you need to.
In-person vs. online: Many mortgage lenders have at least some online processes. However, you can also find lenders with local branches and loan officers. Choose a lender that matches the type of service you want.
Lender fees: Like your interest rate, fees help determine the overall cost of your mortgage. Ask potential lenders what types of fees they charge, and be wary of those that charge prepayment penalties if you pay your mortgage off early.

While you can often find a lender’s interest rates on its website, these may not be helpful for comparing your loan options. You’ll get the most accurate rates by applying for pre-approval to ensure the rate quote is personalized to you.

What to Consider Before Getting Your First Mortgage

Buying your first home is an exciting milestone, but it’s also a major financial decision. It’s important to find a mortgage that will offer monthly payments that will fit within your personal budget.

Depending on your credit score, you may need to spend some time building your credit before applying for a mortgage. You can borrow a conventional loan with a credit score as low as 620, and the requirement may be even lower for other loan types.

Your monthly payment isn’t just the money that goes toward your loan principal. It also includes your interest payments, as well as any private mortgage insurance (PMI) you have on your loan. Finally, your loan payment may include escrow payments that will pay for your homeowners insurance and property taxes.

In addition to considering the amount you’ll borrow, you must also carefully choose the type of loan you want. While many people borrow a 30-year fixed-rate conventional loan, that doesn’t work for everyone. Your credit score or financial situation might limit your ability to qualify for certain types of loans, meaning you’ll have to research more flexible loan types.

Finally, consider whether it’s actually a good time for you to get a mortgage. Most loan types require a down payment, so you’ll have to have some money set aside when you close on your loan. And that will be in addition to any money you’ve saved for moving expenses, furnishing your new home, and other emergency savings.

Frequently Asked Questions

How Does Pre-Qualifying for a Mortgage Work?

Mortgage pre-qualification is a preliminary way of seeing whether you’re likely to qualify for a mortgage, how much you might qualify for, and what interest rate you might qualify for.
Depending on the lender, pre-qualification may or may not require a hard inquiry on your credit report. However, it generally requires less detailed information than pre-approval. For example, you won’t have to provide proof of income or assets. So while the process may be quicker, it isn’t necessarily as accurate.
How Long Does It Take to Buy a House?

The amount of time it takes to buy a house depends on your local housing market, your financial situation, and your lender. The average time to buy a home is around 45 days, but it could vary significantly. For example, many lenders advertise fast closing times. However, if the lender has a difficult time underwriting your loan or there are problems with the home, it could take much longer.
Do You Have to Have a Down Payment to Qualify for a Mortgage?

Depending on the type of mortgage you get, you may or may not need a down payment. Conventional loans require a down payment of at least 3%.
There are other loan types—including a USDA loan or VA loan—that don’t require a down payment. And on the other end of the spectrum, depending on your credit score, an FHA loan may require a down payment as high as 10%.
How Does Your Credit Score Affect Home Buying?

Your credit score can affect your home-buying experience in a couple of different ways. First, your credit score determines whether you can get a mortgage at all. Most loan types have a minimum credit score that borrowers need to qualify.
Additionally, your credit score will impact the interest rate you’re eligible for. The best interest rates are generally only available to borrowers with good or excellent credit. Meanwhile, borrowers with fair credit, even if they do qualify for a loan, may pay a higher interest rate.

Methodology

Investopedia is dedicated to providing its readers with unbiased, comprehensive reviews and comparisons. To rate online mortgage lenders, we collected hundreds of data points across 16 of the largest mortgage lenders, and ranked them according to first-time homebuyer resources, customer service, underwriting requirements, and other factors.

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Article Sources

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

FannieMae. “Eligibility Matrix.”
ICE Mortgage Technology. “Days to Close.”
Federal Deposit Insurance Corporation. "203(b) Mortgage Insurance Program.”