Which loan is best for first time home buyers in 2022? First-time homebuyers often face many challenges when it comes to buying a home. Because they don’t have the equity from a previous home sale, their down payments are often lower than people who have already bought and sold a home.
If you are searching for which loan is best for first time home buyers in 2022, you are on the right page, coz here in this guide we will be walking you through which loan is best for first time home buyers in 2022, tips on comparing lenders for first-time homebuyers, and also give the list of lenders that excel in various areas such as; offering low-down payment mortgages or special loans for first-time buyers.
Loan products like FHA, VA, and USDA loans can be a great option if you are searching for which loan is best for first time home buyers in 2022. Because they require lower down payments and minimum loan values.
Table of Contents
Which Loan Is Best For First Time Home Buyers In 2022?
Here are the lists of lenders that excel in offering low-down payment mortgages or special loans for first-time buyers.
1. Better
Better offers comfort in many ways. It is fully digital so you can apply and promote it from anywhere in the world. The pre-approval time is fairly short: Applicants can expect a quote and pre-approval in about 20 minutes. The lender has also developed technology to automatically check for discounts that customers may qualify for without any additional effort or cost to the borrower.
Better does not charge commission or lender fees, including application, acceptance, and setup fees. According to Better, the commission-free business model saves about 1% of the loan amount. This equates to an average savings of $19,000 over the life of a loan.
Available in most states
Better is available throughout the US with the exception of Hawaii, Massachusetts, Minnesota, Nevada, New Hampshire, Vermont, and Virginia.
How do I apply for better mortgage loan?
The application process is 100% online, in fact, better funded its first loan in 2016 without a single phone call. For people who love automation, this is where Better excels.
With no personal locations, clients must rely on email and phone correspondence with credit experts. Customer service hours, including email, phone, and online chat, are 9:00 a.m. to 9:00 p.m. Monday through Friday and Saturday and Sunday from 10 a.m. to 6 p.m. ET.
What time does it take to approve better mortgage?
When looking at which loan is best for first time home buyers in 2022, you also have to look at the time it takes for them to approve your mortgage. This is where Better Mortgage comes in, because Pre-approving a better mortgage takes less than 20 minutes for borrowers who don’t need to provide additional information. If you need to show proof of income from self-employment, gifts of money, or additional assets, pre-approval may take longer. The lender’s average close time is 32 days, which is 10 days faster than the industry average.
What is the credit requirement for better mortgage?
Better requires a minimum credit score of 620.
Types of loans offered By Better
Better offers conventional and jumbo mortgages (ARMs), FHA loans, and bridging loans with fixed and variable interest rates. It does not offer VA or USDA loans.
Pros
- The time to pre-approve a loan is only 20 minutes
- Alternative credit data such as utilities and rent payments are checked
- There are no commissions or lenders
- Better offers a bridge loan program to tap into equity when buying a new home
Cons
- The lender does not offer VA or USDA loans
- There are no physical locations
- Better do not offer land or eviction loans
2. Guaranteed Loan
Mortgage borrowers can count on average fees and competitive interest rates that are just below the national average. Borrowers can also receive a pre-approval letter within 24-48 hours and be pre-qualified online within 15 minutes.
The minimum credit score for VA and FHA loans is below average and requires only 600 FICO. This can be useful for inexperienced borrowers who may not have an established credit history.
If you’re a VA borrower (or refinance a VA mortgage), searching for which loan is best for first time home buyers in 2022? Then Guaranteed Loan is an option. Coz the guaranteed interest rate waives all borrowing costs. For new borrowers or borrowers with less than perfect credit, the minimum requirements are lower than average. For example, the FICO minimum requirement for a compliant mortgage and USDA loan is 620, and only 600 for FHA and VA mortgages.
Available in all 50 states
The Guaranteed Rate is available online throughout the US and has over 300 locations nationwide.
How do I apply for Guaranteed Mortgage?
Guaranteed Rate offers both physical and online access to borrowers looking to apply for a mortgage. Their paperless application process allows borrowers to submit paperwork electronically and request and track the application process online.
Borrowers can apply online or in person at one of their locations. Customer support is available by phone Monday through Friday from 8:30 a.m. to 7:30 p.m. CST and Saturday from 9 am to 2 pm. CST.
What time does it take to approve guaranteed mortgage?
One to two days – Pre-approval times are not as quick as other lenders, with a one to two-days turnaround time for pre-approval letters.
What is the credit requirement for Guarantted mortgage?
The minimum requirements for the credit guarantee differ depending on the mortgage. The lender offers credit options for buyers with a credit score as low as 600. The minimum requirements for each program are:
- FHA: 600
- Conventional: 620
- VA: 600
- USDA: 620
- Large: 700
Types of loans offered by Guaranteed
Guaranteed Rate offers mortgages for both buyers and refinancers. The product line includes fixed and adjustable rate mortgages (ARMs), conventional and jumbo mortgages, FHA, USDA, and VA loans, and interest-free mortgages.
The guaranteed interest rate does not offer equity loans or equity lines of credit.
Pros
In some cases, alternative creditworthiness data such as ancillary costs and rent payments are taken into account
- Low minimum credit requirements
- Works in all 50 states
- Competitive interest rates
- No lender fees for VA borrowers
Cons
- The lender does not offer mortgages
3. PNC
PNC Bank operates in all 50 states and offers a variety of mortgage products, including specialty loans for low- and middle-income borrowers.
When looking for which loan is best for first time home buyers in 2022? PNC is a great pick, coz it offers an innovative online experience called Home Insight, which provides a deep dive into the home buying process, allowing customers to determine the mortgage payment they can afford and search for homes with real-time quotes and loan products. . It also allows customers who have applied for credit to track the approval process and upload receipts. In addition, the client can invite brokers into the process to monitor the progress.
Home Insight combines a home affordability analysis, a monthly payment estimate that takes insurance and taxes into account, and the ability to search for available home listings. It also combines unique budgets, real-time rates, and loan products with home searches to help potential home buyers better understand how much home they can afford.
PNC also offers a fully digital pre-approval application where borrowers can apply online and receive approval in minutes.
Available in all 50 states
PNC has locations for borrowers who are more comfortable with a physical experience in the following states: Alabama, Delaware, District of Columbia, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Missouri, and New Jersey, New York. North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Wisconsin, and West Virginia
How do I apply for PNC Mortgage Loan?
Borrowers can apply online or in person at a bank office. Telephone customer service is available Monday through Thursday from 8:00 a.m. to 9:00 p.m. ET, Fridays from 8am to 5pm ET and Saturdays from 9am to 2pm ET.
What time does it take to approve PNC mortgage?
Pre-approval takes between 20 and 30 minutes. The average closing time is 45 days, which is about the industry average. In some cases, the shutdown may last as little as 30 days.
What is the credit requirement for PNC mortgage?
Borrowers must have a minimum credit rating of 620. For jumbo loans, the minimum credit rating is 700.
Pros
- Low minimum credit requirements
- Pre-approval time is fast
- Online and in person service available
- Various discount programs are available
- Extensive digital support for existing customers
Cons
- USDA loans are not available
4. Ally
For basic loan options (you won’t find VA, FHA, or USDA loans here), Ally offers competitive rates and standard lenders that range from 2% to 5% of the loan. New buyers can take advantage of Fannie Mae’s HomeReady Loan, which requires a 3% discount.
Talking of which loan is best for first time home buyers in 2022? Ally is also a great option coz qualified borrowers will receive a fast pre-approval letter within three minutes, which is beneficial in a crowded market. Borrowers can also set their interest rate within 10 minutes of pre-approval.
Ally customers can track their progress online, e-sign documents, and upload files anytime, anywhere. As long as you have an internet connection, you can do most of the work remotely.
Available in most states
Ally is available throughout the US excluding Hawaii, Maryland, Massachusetts, Minnesota, Nevada, New Hampshire, New York, Vermont, Virginia, and Wyoming.
How do I apply for Ally Mortgage?
The application process is 100% online. Borrowers meet in person to sign the closing documents.
Since Ally does not have physical locations, customers must rely on telephone correspondence for customer support. The only customer support option is by phone Monday through Friday, 9am to 9pm. ET and Saturdays from 10:00 a.m. to 6:00 p.m. ET.
What time does it take to approve PNC mortgage?
Ally’s mortgage pre-approval is extremely quick and takes about three minutes. Required documents include tax returns, credit reports, identification (driver’s license or passport), monthly bank statements, and money gift letters (if applicable). For borrowers who are asked for additional information, e.g. E.g. proof of income for self-employed borrowers, cash donations, or additional assets, the pre-approval time may be longer. The average lender close time is 36 days.
Pre-approval takes between 20 and 30 minutes. The average closing time is 45 days, which is about the industry average. In some cases, the shutdown may last as little as 30 days.
What is the credit requirement for PNC mortgage?
Ally requires a minimum credit score of 620.
The lender considers alternative credit data such as rent and utilities when evaluating mortgage applications. Alternative credit data takes into account payments you’ve made that aren’t traditionally included in credit reports. This can help borrowers who may not have long credit histories or have had a previous bankruptcy have a good track record of making on-time payments in areas not typically counted on traditional loan records.
Types of loans offered
Ally offers conventional and jumbo fixed-rate and adjustable-rate mortgages, as well as HomeReady loans. It does not offer FHA, VA, or USDA loans.
Pros
- Loan pre-approval takes just three minutes
- In some cases, alternative creditworthiness data such as ancillary costs and rent payments are taken into account
- Borrowers can set their interest rate in minutes
- The HomeReady loan option is available to new home buyers
Cons
- The lender does not offer FHA, VA, or USDA loans
- There are no physical locations
- Ally does not offer land loans
5. LoanDepot
Which loan is best for first time home buyers in 2022? LoanDepot is one of the largest non-bank mortgage lenders in the US with more than 150 branches nationwide and a robust online presence. Lending products include conventional mortgages, government-backed loans, and refinancing.
Customers using the lender’s Mello Smartloan online technology can cut their closing time by 17 days by reducing paperwork and digitally connecting and verifying assets, income, and debt. Additionally, Mello Smartloan can perform title approval digitally, which is often one of the more time-consuming steps of the acceptance process. Another advantage of this technology is that it also determines whether some borrowers can waive the rating requirement, which can save time and a few hundred dollars on the cost of your mortgage.
Available in all 50 states
Borrowers can apply online or at more than 150 locations across the United States. LoanDepot currently has origination centers in Arizona, Tennessee, and two in California and is currently licensed in 50 states.
How do I apply for loan depot Mortgage?
LoanDepot customers can apply for a mortgage online. Once they submit their application, a loan officer will call them to discuss the next steps, including filing income documents and ID cards.
Customer service hours are fairly flexible on weekdays, from 8 am to 10 pm. ET Monday through Friday and Saturday from 11:00 a.m. to 3:00 p.m. ET.
What time does it take to approve guaranteed mortgage?
For borrowers who do not need to provide additional information, LoanDepot’s pre-approval time is approximately 20 minutes.
Borrowers using their Mello Smart loan technology, which is reportedly reducing the number of paperwork applicants must submit and in some cases even eliminating the need for a home appraisal, can shave as much as 17 days off the closing process.
What is the credit requirement for LoanDepot mortgage?
LoanDepot requires a minimum credit rating of 620 for conventional and VA home loans, which is the average requirement for most lenders. For FHA mortgages, the credit requirement is less stringent, reaching a minimum of 580. Finally, jumbo borrowers must have a minimum credit score of 700.
Types of loans offered By LoanDepot
LoanDepot offers Fixed Rate Mortgages, Adjustable Rate Mortgages (ARMs), FHA Loans, Jumbo Loans, VA Loans, and 203(k) Loans. LoanDepot does not offer USDA loans.
Pros
- The time to pre-approve a loan is only 15 minutes
- Customers using Mello Smart loans reduce their closing time by up to 17 days
- Credit requirements are moderate
- LoanDepot’s refinancing fee does not apply to existing customers
Cons
- Advertised mortgage rates are above the national average
- The formation fee is higher than most
- Borrowing can take longer than 30 days
Tips on Comparing Lenders For First-Time Homebuyers
After you must have read through which loan is best for first time home buyers in 2022, no look at tips to compare lenders for first time homebuyers
First-time homebuyers often face two major obstacles to getting a mortgage: their credit rating and lack of cash to make a large down payment. If that sounds like you, you should look for a lender with low minimum credit requirements and low down payment options.
Before you apply, find out your credit score and get an estimate of your down payment based on how much you’re willing to spend on a home. These are two important factors that lenders will consider when making their decision:
- Whether you qualify for a mortgage
- If you qualify, what will your interest rate be?
Most mortgage lenders look for a credit score of around 620, so if yours is lower, you’ll have to do some digging. While some loans, such as For example, where VA loans do not have minimum credit ratings, lenders apply what is known as a credit overlay to create a minimum credit rating that makes sense for their risk tolerance.
Aside from popular first-time mortgage products like FHA loans, many lenders have special loans for first-time buyers. When looking for lenders, start with your own financial institution. Ask them if they have loans that suit your needs. You can even offer customer discounts.
If you are not immediately approved for a loan, loan officers will often work with you to put you on the right track to qualify. It could be as simple as boosting your credit score, paying off a debt, or longing for something more for a down payment.
FAQ – Which Loan Is Best For First Time Home Buyers In 2022
1. Why is my credit score important?
Not only is your credit history important to qualify for a mortgage, it is also the key to a lower interest rate. The better your credit rating, the lower your interest rate, which can save you quite a bit of money.
Consider that a borrower with a $300,000 mortgage with a 30-year term and a 3% interest rate will pay $29,635.90 less over the life of the loan than a borrower with a 3.5% interest rate. On a monthly basis (excluding taxes, insurance, and other homeownership costs), that’s a savings of $82.
2. What house I can afford?
The first step in buying a home is creating a budget. First, consider how much you bring in each month and how much you spend (on debt, savings, retirement plans, tuition, etc.). Most experts recommend that you spend no more than 30% of your gross monthly income on your mortgage, including taxes, insurance, and applicable HOA fees. The Forbes Advisor Payment Calculator helps you take the guesswork out of how much to spend on a home.
3. How do I get pre-approval for a mortgage?
Pre-approval of a mortgage represents a lender’s offer to lend money to the buyer based on certain financial terms and specific terms. Begin by gathering any documents your lender will require, including a copy of your social security card and recent W-2 forms, payslips, bank statements, and tax returns. Your selected lender will then walk you through the pre-approval process.
4. What is mortgage insurance?
Personal Mortgage Insurance (PMI) protects the lender in the event you default on your mortgage. When you pay a down payment of less than 20% of the purchase price of your home, you typically pay PMI. How much you pay for this insurance depends on factors such as the amount of your down payment and your credit rating.
5. How much money do I need for a deposit?
The higher the down payment you can afford, the less financing you will have to pay when buying a home. With a classic mortgage, you avoid paying at least 20% down for private mortgage insurance. The minimum down payment required depends on the type of mortgage you are taking out. In 2019, the median deposit for starters was 6%.
Conclusion – Which Loan Is Best For First Time Home Buyers In 2022?
Which loan is best for first time home buyers in 2022; the lenders we review represent some of the largest mortgage lenders by volume, including banks, credit unions, and online lenders.
The best lenders for first-time buyers excel in areas that are historically important to this group, including low-to-medium credit requirements, low down payment options, and the availability of promotional programs.
The following is the weight assigned to each category:
- Credit cost: 30%
- Speed: 20%
- Credit Requirements: 20%
- Type of loans offered: 20%
- Access and availability: 10%
Specific characteristics considered in each category include APR, average interest rate, issuance fees, minimum credit requirements, rebates, and customer service availability.