Affordable Mortgages for First-Time Homebuyers: A Guide to Homeownership in 2025

The following is a sponsored partnership with PSECU.

Buying your first home is one of life’s biggest milestones. However, the price tag can many times feel out of reach, especially with rising prices and high interest rates.

Fortunately, many lenders now have affordable mortgage options to lower upfront costs and make your first house more accessible. So, if you are wanting to buy a house right now, I recommend looking into the most affordable mortgage options for first-time homebuyers, ranked for cost and quality of service.

1. PSECU

PSECU makes home buying affordable and accessible, especially for first-time buyers with their affordable mortgage options.

This digital-first credit union has competitive rates and a special First-Time Homebuyer Program, allowing you to finance up to 100% of your property’s purchase price with no minimum down payment requirements. As a credit union, PSECU is completely member-owned and not-for-profit, meaning fewer fees for more benefits, which helps you achieve more and make the most out of your money.

Key Offerings

• Special programs for first-time homebuyers, allowing up to 100% financing with no private mortgage insurance required
• 24/7 customer service via chat, digital banking message or phone call
• No application fees, origination fees or hidden charges

2. Bank of America

As one of the leading banks in the country, Bank of America’s mortgage offerings are a no-nonsense entry point into real estate. It offers a wide variety of mortgage loans with lower interest rates relative to the rest of the market.

It’s a solid option for existing Bank of America customers, with their Preferred Rewards program offering discounts on origination fees or interest rates. These perks could significantly reduce one’s mortgage.

Key Offerings

• The Affordable Loan Solution mortgage program only requires a 3% down payment
• Offers up to $17,500 in homebuying assistance to qualified applicants
• Existing customers get special perks and discounts

3. SoFi

SoFi stands out by offering a one-stop shop for potential homeowners.

Aside from mortgage loans, the company also has a partnership with a real estate agent platform and provides a quick tool for homeowners insurance quote comparisons. This non-bank lender is known for its competitive rates, user-friendly digital platform and customizable loan terms, which allow new home buyers to access the finances they need conveniently.

Key Offerings

• Down payments can be as low as 3% to 5%
• $10,000 on-time close guarantee if closing exceeds the contract date, with the lender at fault
• Simple all-online application

4. Alliant Credit Union

Similar to PSECU, Alliant Credit Union is a member-owned and not-for-profit financial institution, allowing it to provide favorable loan terms and minimal fees. First-time home buyers could especially benefit from its low and no-down-payment options.

You can see a wide range of custom mortgage rates without providing any personal information. Borrowers also don’t need to be a credit union member until closing, allowing you to consider your options thoroughly.

Key Offerings

• Sample rates are available upfront for better transparency
• No application fees and low to no down payment required
• Good selection of loan types with flexible terms

5. Rocket Mortgage

Rocket Mortgage is one of the most popular mortgage lenders in the U.S., primarily due to its affordability and other favorable terms. Its standout offer is its One+ loan, where eligible borrowers can contribute as little as a 1% down payment, while Rocket contributes 2% of the home’s total cost for a 3% total.

It’s also incredibly easy to get a Rocket Mortgage loan. You can go through the entire application and approval process with the robust mobile app.

Key Offerings

• Down payments can go as low as 1% of the home’s value
• Offers closing cost assistance for former renters
• Convenient application process via mobile app

Tips to Qualify for an Affordable Mortgage

Qualifying for an affordable mortgage can take some work, depending on your current financial situation. These tips can help you get one with perfect terms for your first home.

Check Your Credit Score

Your credit score is an important factor in determining your eligibility for a mortgage and the terms you get. Higher credit scores often come with lower interest rates and more favorable terms.

Most conventional lenders require a score of at least 620.

Check your credit report and dispute potential errors. If you need to raise your score, pay down any outstanding debt and make sure you pay your bills on time.

Look at Your Debt-to-Income Ratio

Lenders look at your debt-to-income (DTI) ratio to assess whether you can afford your monthly payments. A lower DTI signals less risk and increases your chances of approval and better terms.

To calculate your DTI, add your monthly debt payments and divide them by your monthly income. Lowering your DTI ratio often entails paying down debt or increasing your income.

Save for a Down Payment

You don’t need to make a 20% down payment. Many lenders offer low rates, usually ranging from 3% to 5%. However, a larger initial payment often means lower monthly ones.

Start saving for your home early. High-yield savings accounts can help you reach your goals faster. If possible, explore payment assistance programs in your state or city.

Consider Multiple Lenders

Approval criteria, rates and fees can vary widely between lenders. Take the time to compare your options and find the most affordable mortgage options for first-time homebuyers and favorable loans. Think about closing costs, customer service quality and special offers that can further improve your terms.

How to Choose the Best Lender

The right mortgage lender depends on your financial situation and long-term goals. Think these factors when comparing lenders.

Interest Rates

Differences in interest rates can add up to thousands of dollars over your entire loan term. Compare lenders side by side to see which one offers the best rates for your credit score and loan type. Some lenders have helpful interactive tools to calculate rate estimates without requiring an application.

Customer Service

Mortgage loan terms usually span decades (30 years!), so it’s important to work with a lender who can make the home buying experience less stressful. You may want to read online forums or review sites to see previous borrowers’ experiences, or ask your friends or real estate agent to recommend affordable mortgage options. You can also test their responsiveness by calling or emailing them with application-related questions.

Special Offers

Some lenders have special offers or perks for first-time home buyers, like down payment assistance or educational resources. These programs can really lower your upfront costs, making the purchase more accessible.

Your First Home Awaits

Homeownership in 2025 is within reach, especially with affordable mortgage options for first-time homebuyers. Many lenders have low down payment options and even financial assistance programs – creative solutions to help new buyers like you get your own place sooner.

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