A couple talking to a loan officer

How to find the best lender for first-time homebuyers

Buying a home is a big decision, especially if it’s your first time. Working with a lender you can trust can help you feel more comfortable with the homebuying process. By considering these tips, you’ll be better prepared to find the best lender for first-time homebuyers that fits your specific needs.

5 things to look for to find the best lender for first-time homebuyers

Consider these five options.

  • In-person and online mortgage services

    Whether you prefer to meet with a loan officer face-to-face or do everything online, it’s nice to have the option of both brick-and-mortar branches and digital mortgage services.

  • Credit score flexibility

    Could your credit score use improvement? You may want to choose a lender that offers affordable lending programs.

  • Down payment assistance

    Down payment assistance can potentially save you thousands of dollars by reducing the amount you need to save for a down payment. If you’d like to become a homeowner sooner rather than later, look for a lender that offers assistance with down payment programs.

  • Different mortgage options

    The best lenders offer different types of loans for a wide array of borrower situations and tailor their mortgage services and home loans to you.

  • A focus on you

    A lender is there to guide you through the most significant transactions of your life. The best lenders for first-time homebuyers strive to understand your needs, unique circumstances, and goals through a personal connection, serving you long after your loan closes. Learn more about what you can expect when you choose Guild Mortgage.

Helpful information for first-time homebuyers

Lenders consider more than just your debt and income level. They will also check your credit score, look at your employment history and take your assets and liabilities into account. Be prepared to share information from the following documents* when it comes time to apply for a mortgage:

  • Proof of income such as pay stubs or W-2s
  • Bank statements and investment assets
  • Tax returns for the past two years
  • Alimony or child support documents

*The items listed above will not inhibit you from starting the loan process.

10 questions first-time homebuyers should ask potential lenders

Whether you’re buying your first home or refinancing, you’ll want to interview your potential mortgage lender before committing to a loan. Asking your loan officer these ten questions can assist you in finding the best lender for first-time homebuyers.

  • 1. Should I get pre-qualified or pre-approved?

    It’s helpful to understand the differences between pre-qualification and pre-approval. Pre-qualification is an informal way to get a ballpark figure of how much you can afford to spend on a home. Pre-approval is a conditional written commitment with the maximum loan amount you’re pre-approved to borrow. If you’re ready to start home shopping and are seriously considering buying, a loan officer can advise you if it’s time to get pre-approved.

  • 2. Which loan is right for me?

    Are you in the military, living in a rural area or want to live in a customized manufactured home? You may qualify for a specialized loan program. The best home lenders for first-time homebuyers offer a wide range of loan types and will tailor a borrowing strategy that fits your needs.

  • 3. How much down payment is required?

    The amount of your down payment will vary depending on your home’s appraisal price, the type of loan and your credit history. You may even qualify for a loan with little or no money down. If you need the flexibility of a low down payment, ask if your lender offers affordable lending programs.

  • 4. Can you match me with down payment assistance programs?

    Working with a local lender who knows which regional down payment assistance grants are available is essential.

  • 5. Is a rate-lock available?

    If you’re house-hunting in a competitive market and worried about increasing rates, you may want to lock in your interest rate while you shop. Programs like the Guild Mortgage Lock and Shop Program* offer rate protection for a specific time period and a one-time rate float-down option if rates go down.

  • 6. Can I get a loan if I have student debt?

    Your debt-to-income ratio (DTI) is the percentage of your gross monthly income that goes towards your monthly debt payments. Your DTI is important because it reflects your ability to manage monthly mortgage payments and repay debts. You may qualify for a mortgage with existing debt if you have a manageable debt load and money to pay your monthly mortgage payments.

  • 7. Will I have to pay mortgage insurance?

    If you buy a house with less than 20% down payment or equity, some lenders will require private mortgage insurance (PMI).

  • 8. How much will my monthly mortgage payment be?

    Use our mortgage payment calculator to understand all costs in your monthly payment, then confirm the amount with your lender, so you know what to expect.

  • 9. What credit score do I need?

    It’s up to the lender to determine the type of mortgage you’re eligible for depending on your credit score and other factors such as debts and savings. While it is true that the higher your credit score, the more likely you’ll be approved, you may still qualify for an affordable lending program with a low credit score.

  • 10. How long will it take to close?

    According to Freddie Mac, the average time to close a purchase loan is 43 days. So you can prepare, ask your lender how long they will need and if they guarantee on-time closings. For example, for buyers in a hurry, Guild Mortgage offers a Homebuyer Express with 17 Day Closing Guarantee.** Guild Mortgage will pay qualifying customers $500 toward closing costs if delays solely by the company prevent the loan from closing on time, in 17 days or more.

Armed with the answers to these ten questions from your mortgage lender, you’ll be better informed to begin your homebuying process.

Guild Mortgage best home lender awards and rankings

Guild Mortgage is proud to be an award-winning lender that has been in business since 1960, making it one of the longest operating mortgage companies in the nation. Take a look at just a few of the lists of best home lenders for first-time homebuyers.

Forbes writes that they picked Guild Mortgage because we’re “a great option for borrowers with lower credit scores. Applying for a home loan through Guild Mortgage is also relatively easy and fast, making it an excellent choice for people who can’t afford to wait.”

Money includes four pros for first-time homebuyers: one of the nation’s top five lenders of FHA loans, home improvement and manufactured home mortgage loans available, specific programs for low-income borrowers available and matching customers with down payment assistance.

The bottom line, states Business Insider, “Guild Mortgage is a good option for first-time homebuyers, because it may give you a loan or grant for a down payment.”

**Upfront lock-in fee required at the time of lock. For full terms and conditions, visit www.guildmortgage.com/cap-hbe-terms/. The above information is for educational purposes only. All information, loan programs and interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.

By |Published On: June 13th, 2022|Categories: Guild Blog, Mortgage 101|Tags: , , , |

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About the Author: Guild Mortgage

Founded in 1960 when the modern U.S. mortgage industry was just forming, Guild Mortgage Company is a nationally recognized independent mortgage lender providing residential mortgage products and local in-house origination and servicing. Guild’s collaborative culture and commitment to diversity and inclusion enable it to deliver a personalized experience for each customer. With more than 4,000 employees and over 250 retail branches, Guild has relationships with credit unions, community banks, and other financial institutions and services loans in 49 states and the District of Columbia. Guild’s highly trained loan professionals are experienced in government-sponsored programs such as FHA, VA, USDA, down payment assistance programs and other specialized loan programs. Guild Mortgage Company is a wholly owned subsidiary of Guild Holdings Company, whose shares of Class A common stock trade on the New York Stock Exchange under the symbol GHLD.