Don’t be bound by loyalty to your current financial institution when seeking a pre-approval or searching for a mortgage: Shop around, even if you only qualify for one type of loan

Make sure to take advantage of all the available options for finding homes on the market, including using your real estate agent, searching for listings online, and driving around the neighborhoods that interest you in search of for-sale signs. Put out some feelers with your friends, family, and business contacts. You never know where a good reference or lead on a home might come from.

Once you’re seriously shopping for a home, don’t walk into an open house without having an agent (or at least being prepared to throw out the name of someone with whom you’re supposedly working). You can see how it might not work in your best interest to start dealing with a seller’s agent before contacting one of your own.

If you’re on a budget, look for homes whose full potential has yet to be realized. Even if you can’t afford to replace the hideous wallpaper in the bathroom now, you may be willing to live with it for a while in exchange for getting into a place that you can afford. If the home meets your needs in terms of the big things that are difficult to change, such as location and size, then don’t let physical imperfections turn you away. First-time homebuyers should look for a house that they can add value to, as this ensures a bump in equity to help them up the property ladder.

First-time homebuyers have a wide variety of options to help them get into a home-both those available to any purchaser, including Federal Housing Authority (FHA)-backed mortgages, and those geared especially to s offer minimum down payments as low as 3% to 5% (vs. the standard 20%), and a few require no down payment at all. Be sure to look into or consider:

• HUD’s resource list. Although the government agency itself does not make grants directly to individuals, it does grant funds earmarked for first-time homebuyers to organizations with Internal Revenue Service (IRS) tax-exempt status. The HUD website has details. The FHA (and its loan program) is part of HUD.
• Your IRA. Every first-time homebuyer can withdraw up to $10,000 out of their traditional individual retirement account (IRA) or Roth IRA without paying the 10% penalty for early withdrawal (but you’ll still pay taxes if you use a traditional IRA). That means a couple could withdraw a maximum of $20,000 ($10,000 from each account) to use toward a first-home purchase. Just know that if you don’t repay the money within 120 days-and you’re under age 59?-then it becomes subject to the 10% penalty. Also, you will owe income taxes on the withdrawal(s).
• Your state’s programs. Many states, including Illinois, Ohio, and Washington, offer financial assistance with down payments and closing costs, as well as with expenses to rehab or improve title loans in Arizona a property, for first-time homebuyers who qualify. Typically, eligibility in these programs is based on income and, often, on the size of a property’s purchase price.
• Native American options. Native American homebuyers can apply for a Section 184 loan. This loan requires a 1.5% loan up-front guarantee fee and a 2.25% down payment on loans over $50,000 (for loans below that amount, it’s 1.25%). Section 184 loans can be used only for single-family homes (one to four units) and primary residences.

An FHA loan, for example, may have different fees depending on whether you’re applying for the loan through a local bank, credit union, mortgage banker, large bank, or mortgage broker

Fees can be surprisingly varied. Mortgage interest rates-which, of course, have a major impact on the total price that you pay for your home-can also vary.