For many renters, the first step in buying a home is becoming 
educated about the process.  If you’re like many people 
considering a home purchase, you’ve spent nights and weekends 
poring over your local real estate section.  You’ve talked to 
friends and relatives about their experiences.  Maybe you’ve 
even purchased a book or two to help you become more familiar 
with real estate terminology and the various types of mortgages 
commonly used today.

Coming up with a down payment and finding a loan that meets your 
needs are the greatest hurdles faced by first-time homebuyers.  
So, you may even have leafed through stacks of brochures and 
flyers from lenders offering down payments that are far less 
than the 20 percent you’d always thought you’d need to save 
before you could buy.  With so many excellent first-time buyer 
programs to choose from these days, you practically need to be 
an expert to sort through them all.

That’s why if you’re a first-time homebuyer seeking a low down 
payment loan, you’ll save time by selecting a professional real 
estate agent who is experienced in working with people just 
like you in the area where you plan to buy.  An agent who 
frequently assists first-time buyers will know from experience 
which lenders in your area offer a low down payment program 
that will most closely match your needs. 

A professional real estate agent can help you determine whether 
you are likely to qualify for these special programs, since 
participation in some may be limited to buyers under a certain 
income level or for the purchase of homes below a certain 
purchase price.  Your agent also will be able to tell you 
whether there are other requirements you must fulfill in order 
to be considered.  With some programs, for example, you must 
attend an educational seminar before you can be considered for 
one of these low down payment loans. It’s important that your 
agent become familiar with your current financial situation.  
Before you meet with your agent to discuss your financial 
situation and housing needs, you’ll want to collect some basic 
information to make the process easier.  Be prepared to show 
recent paycheck stubs or pay vouchers to certify sources of 
income; a complete list of current credit card, auto and other 
consumer credit payments you make each month; and recent bank 
and savings statements.  These documents will help you and 
your agent determine how much home you can afford.  It’s also 
important that you disclose any prior credit problems or late 
payments.  Your agent may be able to suggest ways to remedy any 
negative remarks on your credit report that could disqualify 
you from a low down payment loan program.

In addition, because most lenders will require that you have 
several months of house payments in the bank as a reserve, your 
agent may be able to suggest ways you can increase your savings 
in the weeks and months leading up to your home purchase.  
Don’t forget that some programs allow you to apply a cash gift 
from a family member to cover the required down payment and 
losing costs.

Your agent also may know a motivated seller who would be happy 
to assist you in accomplishing your home purchase by carrying 
a second mortgage.  A second mortgage is helpful because it 
reduces the amount of the first mortgage you need to obtain.  
In some cases, a second monthly payment and generally is 
required to protect the lender when a down payment is less 
than the standard 20 percent of the loan amount.  Even if your 
seller isn’t willing to take a second mortgage to complete the 
sale, he or she may be willing to pay your closing costs, 
which will reduce the amount of cash you need to have on hand 
up-front. 

With interest rates edging up, innovative mortgage financing 
programs that require a low down payment are even more important 
than ever to first-time buyers.  A professional real estate 
agent can help you sift through the countless programs that are 
available and help find the one that’s mortgage can eliminate 
the need for private mortgage insurance, which is added to your 
right for you.