If you are a first-time homebuyer, applying for a mortgage can

be a very stressful situation. It is common for first-timers to

become overwhelmed with all of the technical jargon and the

variety of choices available to them. However, if you are tired

of renting and you have a steady income and a good credit

rating, you are already on the road to purchasing your own

home. With a little help from special first-time buyer

programs, you can purchase a home for less per month than you

have been paying to rent.

As a general rule, a household can purchase a home that is

worth up to two to three times its yearly income. However, if

you are a low-income family, there are special programs that

can help you obtain an affordable mortgage that will allow you

to purchase a higher-value home. When you first apply for your

mortgage, you will need to gather all of your financial

information. You will need to know your salary, employment

history, personal assets, bank balances and debts. You will

then need to decide which type of mortgage you would like to

apply for.

There are two different types of mortgages, fixed rate and

adjustable rate. With a fixed rate mortgage, you will pay the

exact same interest rate throughout time, whereas an adjustable

rate can fluctuate over the years. Deciding on the type of

mortgage you need depends on several different factors. These

include your current finances, expected changes to your income

and how long you expect to stay in the house you are

purchasing. With a fixed rate mortgage, you may save money in

the long run, but you will end up paying higher monthly

payments. On the other hand, you can pay less per month with an

adjustable rate mortgage, but you could end up paying much more

overall if interests rates skyrocket.

Obtaining your first mortgage can be made easier with a little

help from special programs. The FHA, or Federal Housing

Administration, issues government-insured loans for first-time

buyers. These loans typically have lower down payments and are

more flexible in their qualification requirements. The Rural

Housing and Community Development Service is another program

that helps low down payment loans. This agency provides loans

to farmers or people in rural areas who cannot obtain mortgages

elsewhere. State and local governments typically provide these

loans to first-time buyers that qualify.

HUD homes are a good option for those who have limited funds

available for home buying. HUD homes are sold as is, at or

below market value, making them more affordable for first-time

mortgage seekers. HUD homes are houses that have been

repossessed by the government after owners defaulted on their

government insured mortgages. These homes can be a good

investment, especially if you plan to fix them up and increase

their market values, or if they are locating in up and coming

areas of town. If you are a first-time buyer, you may be able

to bid on a HUD home and secure a low interest mortgage more

easily, especially if you arrange financing through government

agencies.

No matter what route you choose, there are many different ways

to secure a mortgage that works for you. If you have little

money for a down payment, you can obtain a low or no down

payment loan that may have a slightly higher interest rate and

higher monthly payments, but it will enable you to stop renting

and to start investing in your future. If you do enough

research, you will be able to find and qualify for a first-time

homebuyer loan that is affordable and fair.