skip to main content



Choosing the Right Mortgage Loan Type for First-Time Home Buyers

April 6, 2022

Couple Looking Up Mortgages for First Time Buyers On Couch

Buying your first home is exciting. But getting a mortgage can be overwhelming — especially if you’re not sure of your options. Read on to discover the best mortgages for first-time buyers and what could be the right choice for you.

Best Lenders for First Time Homebuyers

At Homestead Financial Mortgage, we specialize in helping first-time home buyers. We’re now helping our clients get their kids their first home loan! We’re willing to take the time to educate our clients and help them select the best mortgage for their particular circumstances. Let’s go over the options.

Best Mortgages for First-Time Buyers


Choice #1 ­— VA Home Loans

A VA loan should be your first choice if you’re a veteran, service member, or surviving spouse. They have great rates, and you can get into a home with zero down. Nothing beats a VA mortgage.

Plus, if you’re looking for a larger loan – there’s no maximum loan limit as long as you can qualify financially. And a jumbo loan amount doesn’t raise the interest rate.

And lastly, VA’s credit guidelines are more lenient than conventional loans. As long as you have a 620 score, you’re good

Choice #2 — Conventional Home Loans

If you’re not eligible for a VA loan, a conventional loan is your best choice because that’s where you’ll get the lowest rates. You can get into a conventional loan for as little as 3% to 5% down. But keep in mind if you put down less than 20%, you’ll have private mortgage insurance. Once you have 20% equity, your lender will remove the PMI, saving you one hundred dollars or more monthly. That’s why a conventional loan is one of the best mortgages for first-time buyers.

Although, conventional loans do have stricter credit standards. If you have a score of 650 and above, this could be your best choice. If your score is lower, an FHA loan is your next option.   

Choice #3 — FHA Home Loans

An FHA mortgage is a good choice when you have less than stellar credit. As long as you have a score of 620, you should be fine. If your score is lower, you’ll need to work to bring it up. Many first-time homebuyers can buy a home with FHA’s lenient guidelines.

You can put down as little as 3.50%. But in most cases, you will have mortgage insurance for the life of the loan regardless of your down payment. Since FHA rates are low, your payment can still be affordable.

Choice #4 — USDA Home Loans

If you’re looking to buy a home in a rural area, a USDA loan might be an option. They have great rates, and you can get into a home with zero down.

Just like other government loans, the USDA’s credit guidelines are more lenient than conventional loans. As long as you have a 620 score, you’re good.

Let Homestead Financial Help

Homestead Financial Mortgage Owners

When you’re getting ready to buy your first home, give us a call. We’ve worked with thousands of first-time homebuyers over the years, and we’d like to help you too. You can expect personal attention and a smooth and stress-free transaction.

Homestead Financial Mortgage has the best mortgages for first-time homebuyers, and we’ll hold your hand throughout the process. We service Arkansas, Colorado, Florida, Illinois, Indiana, Kansas, Missouri, Ohio, Tennessee, and Texas. Contact us today to learn more about the home loan products we offer that are right for you.

"By being open and recognizing our strengths and weaknesses, we can see opportunities for growth and ways to help each other."

- CEO, Jayson Hardie on Growth

Get a Free Quote →