Misconceptions

• Many believe that these special programs are only available to those who have never before owned real estate or had a mortgage. While you should always learn the "rules" of any mortgage program, these loans and terms are also often available to those who have not owned property for the past three to five years.
  
  

Considerations

• First-time home buyer loans are not giveaway programs. You'll still need some cash, but instead of the typical 10% to 25% down payment, you might only need 3% to 5%. You may sometimes be allowed to borrow funds or use gift money, which is often not allowed with other mortgages. You should also budget for closing costs, which are difficult to avoid in a purchase of real estate. These expenses, however, might be lowered in first-time home buyer programs.
  
  

Types

• You will typically not have access to the full menu of mortgage loans available in the market. First-time home buyer programs are often limited to a smaller variety of loan types. However, you'll be pleased to learn that you won't have to become an expert in some of the more exotic mortgage products nor will you typically risk making a mistake by choosing one of the dangerous ARM (adjustable rate mortgage) loans that can cause financial problems in the future. You should still have a good choice of loans with a first-time mortgage program.
  
  

Features

• The primary focus of first-time home buyer programs is to lessen the financial burden of buying a house or condominium so new buyers can get into the market. The most common barrier to first-time buyers is their lack of sufficient cash to make the required down payment and still have enough money left over for closing costs. First-time home buyer programs address this roadblock and include terms that are "friendly" to those lacking sufficient cash to qualify for other mortgage loans.
  
  

Benefits

• Prospective new homeowners, who may otherwise be unable to purchase their first house, can use a first-time home buyer program to qualify for a mortgage loan they can afford. With reasonable interest rates, low down-payment requirements, affordable closing costs and other considerations, first-time home buyer programs deliver superb benefits to people who might otherwise be unable to purchase homes. They might also help those who have previously owned a home but, for a variety of reasons, have been unable to purchase another in recent years.