7 Options for Your First Home Mortgage

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What's behind door #3? Maybe door #7! So many choices...

When it comes to your first mortgage loan, you have quite a few options. Some are not so great, some are great in certain situations. So how do you know where to start? When it comes down to it, talking to a mortgage consultant is the best way, so they can look at your situation and help narrow it down. However, getting started on your own is smart. So here's a list of some options we gathered. 

1. Win the lottery and pay cash. Obviously this would be great, but it's a long shot to say the least.
2. Go the traditional FHA mortgage route. Many first time home buyers find that FHA mortgage interest rates and down payment requirements are within their reach, so it's a great way to go.
3. Use the FHA 203k to make home improvements or repairs. FHA-eligible borrowers sometimes find a great house that needs some work. In fact, in order to qualify for an FHA mortgage, the home needs to meet certain requirements. Many of these repairs can be financed through the FHA 203k mortgage loan. In fact, the 203k covers many desired home improvements as well.
4. Rural Development Mortgage. How does a first home with some land sound? Pretty nice? RD mortgage loans cover homes outside city limits in designated areas. The great thing about rural development is that it doesn't require a down payment. This means you can get your first home 100% financed!
5. HomePath Financing. Fannie Mae-owned homes (foreclosed houses) are eligible for the Fannie Mae financing program called the HomePath mortgage. Low down payment requirements and generally low prices could put you in a house well within your budget as a first time home buyer.
6. Conventional mortgage loan. If you have enough of a down payment, or have a family member gifting you a nice chunk of change, then conventional may be a good choice for you. This would open up pretty much any location or home you want, depending on your mortgage pre-approval amount.
7. Keep renting and throwing away your money. That's right, we said it: rent is a waste of money. You're simply filling a lanlord's pocket with money instead of building equity of your own. But that's okay. Stay in your Renters Nightmare instead of owning your own home.

One key to getting that first home mortgage is understanding credit. Many mortgage programs come with minimum credit score qualifications. Getting your credit score up involves simple steps like paying your bills on time, keeping judgments to a minimum (because you pay your bills) and keeping your balances below 30-percent of the maximum on your credit cards. You can download the free eBook "The Road to Mortgage-Ready Credit" for a more in-depth look at getting your credit on track for a mortgage loan.

(many doors photo: Flickr user Fuzzy Gerdes)