Top Mortgage Lenders in Sacramento for First-Time Buyers

For many first-time homebuyers in Sacramento, navigating the mortgage process can feel overwhelming. With so many lenders and loan options available, it’s crucial to find a reputable mortgage provider that offers competitive rates, excellent customer service, and programs tailored to first-time buyers. This comprehensive guide will explore the top mortgage lenders in Sacramento for those embarking on their homeownership journey.

Best Overall: Rocket Mortgage

Rocket Mortgage, formerly known as Quicken Loans, stands out as the best overall option for first-time homebuyers in Sacramento. As the largest FHA lender in the nation, Rocket Mortgage has extensive experience working with first-time buyers using government-backed loans.

Key advantages of Rocket Mortgage include:

• Fully online mortgage process with document and asset retrieval capabilities
• Option to work with loan officers by phone if desired
• Consistently high customer satisfaction ratings
• Streamlined preapproval process that allows editing of preapproval letters

Rocket Mortgage offers competitive rates, with recent data showing a 30-year fixed APR of 6.906% for well-qualified borrowers in Sacramento. While their origination fees tend to be on the higher side, the convenience and customer service often outweigh this drawback for many first-time buyers.

One potential downside is that getting a customized interest rate requires a credit check, which can affect your credit score. However, for those comfortable with an online process and seeking a lender with a strong reputation, Rocket Mortgage is an excellent choice.

Best for Low Down Payment Options: Guild Mortgage

Guild Mortgage received the highest rating for customer satisfaction in J.D. Power’s latest U.S. Primary Mortgage Origination Satisfaction Study, making it an attractive option for first-time buyers who value personalized service. What really sets Guild apart, though, is its array of low down payment and down payment assistance programs.

Key features of Guild Mortgage include:

• Partnerships with over 500 down payment assistance programs nationwide
• Offers a zero-down program combining FHA loans with down payment assistance
• Low credit score requirements (minimum 540 for some programs)
• High customer satisfaction ratings for both origination and servicing

Guild Mortgage’s commitment to making homeownership accessible is evident in its loan offerings. They provide conventional loans with as little as 3% down and work with numerous local and state housing finance agencies to provide grants and low-interest second mortgages to cover down payments and closing costs.

For Sacramento buyers struggling to save for a large down payment, Guild Mortgage’s innovative programs could be the key to homeownership.

Best Online Experience: Better Mortgage

In today’s digital age, many first-time buyers appreciate a streamlined online mortgage process. Better Mortgage excels in this area, offering a 100% online application and origination experience.

Standout features of Better Mortgage include:

• Pre-approval in as little as 3 minutes
• No lender fees (including application, origination, and underwriting fees)
• Claims to help borrowers close in as little as 32 days
• Loan officers don’t earn commission, reducing pressure on borrowers

Better Mortgage’s approach to lending focuses on transparency and efficiency. Their online platform allows borrowers to easily compare loan options and see exactly what they qualify for without pressure from commissioned loan officers.

While Better doesn’t offer some specialized loan types like VA or USDA loans, they do provide conventional and FHA loans that are popular among first-time buyers. Their lack of lender fees can result in significant savings for borrowers.

Best for Military Service Members: Veterans United

For first-time buyers with a military background, Veterans United is the top choice in Sacramento. Specializing exclusively in VA loans, Veterans United has developed unparalleled expertise in this niche.

Key advantages of Veterans United include:

• Consistently high customer satisfaction ratings
• Fully online mortgage process
• Ample resources for first-time VA homebuyers
• Excellent customer reviews on third-party sites

While Veterans United’s focus on VA loans means they’re not an option for all first-time buyers, eligible veterans and active-duty service members will find their specialized knowledge invaluable. VA loans offer significant benefits, including no down payment requirements and no private mortgage insurance, making them an excellent option for qualified first-time buyers.

Best Traditional Bank Option: Bank of America

For buyers who prefer the stability and in-person service of a large bank, Bank of America stands out as the best option in Sacramento. With over 4,300 branches nationwide, including multiple locations in the Sacramento area, Bank of America offers the convenience of face-to-face interactions combined with robust online tools.

Notable features of Bank of America’s mortgage offerings include:

• Down payment and closing cost assistance programs
• Preferred Rewards program offering rate discounts for existing customers
• Wide variety of mortgage options, including all major government-backed loans
• Special programs for medical professionals

Bank of America’s “America’s Home Grant” program provides eligible buyers up to $7,500 in closing cost assistance, while their “Down Payment Grant” program offers up to 3% of the purchase price (up to $10,000) to be used toward a down payment. These programs can be particularly beneficial for first-time buyers in Sacramento’s competitive market.

Best for Self-Employed Buyers: Caliber Home Loans

Self-employed individuals often face unique challenges when applying for a mortgage. Caliber Home Loans stands out for its dedication to serving this demographic through its innovative SmartSelf program.

Key features of Caliber Home Loans include:

• SmartSelf program allows qualifying based on bank statements rather than tax returns
• Self-employed borrowers may qualify for loans up to $3 million
• Offers a wide variety of conventional and government-backed loans
• Fully online application process available

Caliber’s SmartSelf program calculates income by averaging deposits made to the borrower’s bank account, providing an alternative for self-employed individuals whose tax returns may not accurately reflect their earning potential. This approach can be particularly beneficial for first-time buyers in Sacramento’s gig economy or startup scene.

Best for Buyers with Credit Challenges: New American Funding

For first-time buyers in Sacramento who may have less-than-perfect credit, New American Funding offers flexible underwriting and a variety of loan programs designed to help more people achieve homeownership.

Standout features of New American Funding include:

• Manual underwriting process allows for consideration of unique financial situations
• Offers FHA loans with credit scores as low as 580
• Provides educational resources for improving credit and preparing for homeownership
• High marks for customer satisfaction from J.D. Power and Zillow

New American Funding’s “I CAN” mortgage program allows for down payments as low as 5% without mortgage insurance, which can be a significant advantage for buyers struggling to save for a large down payment. Their manual underwriting process means they can often find solutions for buyers who might be turned down by lenders relying solely on automated systems.

Best Local Option: Golden 1 Credit Union

While not included in the provided materials, it’s worth mentioning Golden 1 Credit Union as a strong local option for Sacramento first-time homebuyers. As one of the largest credit unions in California, Golden 1 offers competitive rates and personalized service with a deep understanding of the local market.

Key advantages of Golden 1 Credit Union include:

• Low down payment options, including 97% financing on conventional loans
• First-time homebuyer education programs
• Local decision-making and fast approvals
• No private mortgage insurance options available

Credit unions often offer more flexible terms and lower fees than traditional banks, and Golden 1 is no exception. Their commitment to the Sacramento community and understanding of local real estate trends can be invaluable for first-time buyers navigating the market.

READ ALSO: Best Mortgage Lenders for First-Time Homebuyers in Indianapolis: A Comprehensive Guide 2024

Comparing Lender Options

When evaluating these top mortgage lenders in Sacramento, first-time buyers should consider several factors:

1. Interest Rates and APR: While rates change frequently, recent data shows 30-year fixed rates in Sacramento ranging from 6.906% APR (Rocket Mortgage) to 7.664% APR (Bethpage Federal Credit Union). Remember that the lowest rate isn’t always the best deal when factoring in fees and other terms.
2. Down Payment Requirements: Options range from 0% down (VA loans through Veterans United) to the standard 20% down. Many lenders offer low down payment options, with 3-3.5% down being common for conventional and FHA loans.
3. Credit Score Requirements: Minimum credit scores vary widely, from as low as 540 for some Guild Mortgage programs to 620 or higher for conventional loans.
4. Fees: Pay attention to origination fees, application fees, and other closing costs. Better Mortgage stands out for charging no lender fees.
5. Customer Service: Consider both professional ratings (like J.D. Power surveys) and customer reviews on sites like Zillow and Trustpilot.
6. Specialized Programs: Look for lenders offering programs tailored to your situation, whether that’s down payment assistance, options for self-employed borrowers, or flexible underwriting for credit challenges.

Tips for First-Time Homebuyers in Sacramento

1. Get Pre-Approved: Before starting your home search, get pre-approved for a mortgage. This will give you a clear idea of your budget and make your offers more competitive in Sacramento’s hot market.
2. Explore Down Payment Assistance: Many lenders, including Guild Mortgage and Bank of America, offer down payment assistance programs. Additionally, check out local options like the Sacramento Housing and Redevelopment Agency’s First-Time Homebuyer Program.
3. Improve Your Credit: A higher credit score can qualify you for better rates. Work on paying down debt and correcting any errors on your credit report before applying for a mortgage.
4. Consider All Loan Types: While conventional loans are popular, don’t overlook FHA, VA, or other government-backed options that might offer more favorable terms for first-time buyers.
5. Factor in All Costs: Remember to budget for property taxes, homeowners insurance, possible HOA fees, and maintenance costs in addition to your mortgage payment.
6. Take Advantage of Educational Resources: Many lenders, including New American Funding and Golden 1 Credit Union, offer free homebuyer education courses. These can provide valuable insights into the home buying process.
7. Work with a Local Real Estate Agent: An experienced agent can provide invaluable guidance on Sacramento’s neighborhoods and help you navigate the competitive local market.

The Sacramento Housing Market

Understanding the local housing market is crucial for first-time buyers. As of 2023, Sacramento’s market remains competitive, with median home prices around $460,000. While this is lower than many other California metros, it still presents challenges for first-time buyers.

Key market trends include:

• Rising interest rates have cooled the market slightly, but demand remains strong
• Many homes receive multiple offers, often going above asking price
• Popular neighborhoods like East Sacramento, Land Park, and Midtown see homes sell fastest
• Suburbs like Elk Grove, Roseville, and Folsom offer more affordable options with good schools

First-time buyers in Sacramento should be prepared to act quickly when they find a home they love, as the market moves fast. Working with a lender that offers quick pre-approvals and closings, like Better Mortgage or Rocket Mortgage, can be advantageous in this environment.

Conclusion

Buying your first home in Sacramento is an exciting journey, and choosing the right mortgage lender is a crucial step in the process. While this guide highlights some of the top options, the best lender for you will depend on your unique financial situation, preferences, and homeownership goals.

Rocket Mortgage stands out for its combination of online convenience and high customer satisfaction, making it an excellent all-around choice for many first-time buyers. Guild Mortgage’s array of down payment assistance programs can be a game-changer for those struggling to save. Online-savvy buyers may appreciate Better Mortgage’s streamlined, fee-free process, while military members should definitely explore Veterans United’s specialized VA loan offerings.

For those who prefer in-person service, Bank of America’s extensive branch network and special programs make it a strong contender. Self-employed buyers and those with credit challenges might find Caliber Home Loans and New American Funding, respectively, to be their best options. And don’t overlook local options like Golden 1 Credit Union, which can offer personalized service and deep local market knowledge.

Remember, getting quotes from multiple lenders can help you find the best rates and terms. Many lenders can provide quotes with only a soft credit pull, so you can shop around without impacting your credit score.

As you embark on your homebuying journey in Sacramento, take advantage of the educational resources offered by these lenders and local housing agencies. With the right preparation and a trusted lender by your side, you’ll be well-equipped to navigate Sacramento’s competitive housing market and find your perfect first home.

FAQs

What credit score do I need to buy a house in Sacramento?

Credit score requirements vary by lender and loan type. For conventional loans, most lenders require a minimum score of 620. FHA loans may accept scores as low as 580, or even 540 with some lenders like Guild Mortgage. However, a higher credit score will generally qualify you for better interest rates.

How much do I need for a down payment in Sacramento?

Down payment requirements depend on the loan type and lender. Conventional loans typically require 3-20% down, while FHA loans require 3.5%. VA loans offer 0% down options for eligible borrowers. Many lenders and local programs offer down payment assistance, so you may be able to buy with less saved than you think.

What’s the difference between a mortgage broker and a direct lender?

A mortgage broker acts as an intermediary, shopping your application to multiple lenders to find the best deal. Direct lenders, like banks and many of the options listed above, provide loans directly. Brokers can sometimes find better deals, especially for borrowers with unique situations, but direct lenders often offer streamlined processes and may have special programs for their banking customers.

How long does it take to get approved for a mortgage in Sacramento?

The time to approval varies by lender and your individual situation. Some online lenders like Better Mortgage offer pre-approval in minutes, while traditional banks may take a few days. Full approval and closing typically take 30-45 days, though some lenders advertise faster closings.

Can I buy a house in Sacramento with bad credit?

While it’s more challenging, it’s possible to buy a house in Sacramento with less-than-perfect credit. FHA loans are often a good option for buyers with lower credit scores. Some lenders, like New American Funding, specialize in working with borrowers with credit challenges. However, you’ll likely face higher interest rates and may need a larger down payment.

Are there special programs for first-time homebuyers in Sacramento?

Yes, several programs are available. The California Housing Finance Agency (CalHFA) offers several loan programs with competitive rates and down payment assistance. Locally, the Sacramento Housing and Redevelopment Agency provides down payment assistance loans. Many lenders also offer their own first-time buyer programs with low down payment options or closing cost assistance.

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