First time buyers of homes need not worry. There are mortgage options that can help first time home buyers obtain a first time home without hassles, even if you feel like you don’t know much about how to go about obtaining a first time mortgage.

As a first time buyer you have most likely been renting a home or an apartment, but now want to invest in a mortgage for your future. A mortgage can help you build equity. Especially if you are a first time buyer, you may not have much credit built up in many areas of your credit report. Purchasing a first time home mortgage can help add to your credit ratings.

One of the most important things to do before looking for your first home is to research the current interest rates. Find out what current mortgage interest rates are available and also how much money you will be offered by the mortgage company to purchase your first home. What is your current salary or your current combined salary with your spouse or significant other? Also, do you have the money to pay some money as a down payment on your first time home? Many first time buyers go look for a home without considering that they most likely need a down payment in order to obtain a first time home mortgage. Luckily, there are first time mortgage programs that offer less than a 10 or 20 percent down payment on a first home, so even if you don’t have a great deal in savings, you will still have a good chance of becoming a first time buyer.

Recently with more young, first time buyers in the market to purchase a first home, many mortgage companies offer a special first time home buyer mortgage. These first time mortgages offer a special down payment starting around 3 percent. Remember that even though it seems the mortgage company is helping you out as a first time homeowner, there may be a disadvantage to only putting down 3 percent, so be sure to ask questions. One of the main disadvantages you may find with putting down less than 20 percent on a home, is that the mortgage company will most likely require you to have private mortgage insurance (PMI). The reason for a down payment is to reassure the financial institution that you are putting a serious investment into this first time home. If you don’t have the money to invest, they will want to have PMI, since they are investing more money into the home. This insurance covers the lender in case you default on the mortgage in the future.

There are also other options for first time buyers through the government, with buyer programs like Housing and Urban Development homes (HUD). Depending on where you live and how much income you make, you may become a buyer through one of these homes. There are also FHA mortgages, which only require the borrower to put approximately 5 percent down. With the option of an FHA mortgage or a first time mortgage remember that the mortgage company will take into consideration the borrower’s income and the amount they want to spend on a home. If you are looking to purchase a $500,000 home, then most likely a mortgage company will not offer you a first time mortgage as a buyer and will want more than 5 percent down from the first time home buyer.

FHA, HUD and first time mortgages are for buyers of modest means who want to get started on a first time home of their own. Because of this there may be limitations set by the financial institution you want to work with on how much you can purchase and what the interest rates will be for a borrower looking into a low down payment, first time mortgage.

Don’t be afraid to ask questions if you are a first time home buyer. Again, do your research before you even get started looking for homes so you know what is in your price range in your area. Call for mortgage quotes ahead of time and be aware of the property values and the homeowner’s insurance needs in your area. Be prepared with research and questions on any part of the mortgage process you don’t understand.