Some may say that being able to buy and then afford a home in this market is an unreasonable goal. If you meet certain conditions you could be able to get into your first home even in this market.

Before taking this major step there are a few things you need to know. Even in the current real estate market, taking a few simple steps can put you on the path to successfully buying and keeping your first home.

Before you do anything else, you need to know how much you can realistically afford. Talk to a licensed and experienced Realtor in your area, or find an online mortgage calculator. It would be a frustrating waste of time to look at houses that you can’t afford, and it would be less than optimal to look at homes that are smaller than what you need. If you know what your price range is, you’ll start off on the right foot. A good Realtor who is familiar with your local market can help you find the best homes in your price range and help you through the loan application process.

Find out what your credit score is. If there are any errors, this is the time to fix them. If your score is low, start working to clean it up. Your credit score along with your available down payment will play a role in determining what interest rate your will have for your loan. Also the more you have available as a down payment will reduce your loan amount which in turn will reduce your monthly payment.

No and low down payments are available and require little if any cash, from the buyer. Today buyers are able to purchase a home with as little as four percent down. Compare that to the average down payment of twenty percent 20 years ago. Many factors will figure into how much you need to put down. Look for a special loan that allows you to buy with little or no cash down. No down payment loans can be challenging to find in today’s market. Again your circumstances will determine what you qualify for. If you are a veteran you can probably qualify for a VA Loan but low down payments in the form of FHA loans are also available.

The FHA Loan is a low down payment mortgage that requires only a 3.5% down payment. FHA loans used have fairly low maximum amounts, putting them out of reach of buyers in expensive metropolitan areas. Recent increases to more than $700,000 in some geographic areas have made them accessible to almost all first time home buyers. Many first time buyers have not saved up enough to make a 20% down payment, so an FHA loan with only 3.5% down is an ideal solution. Keep in mind though that borrowers who put down less than 20% are usually required to pay PMI (Private Mortgage Insurance) again depending on the loan program so keep in mind your particular circumstances always play a part in this process.

After a few years of making mortgage payments, your equity will have grown. Once you have 20% to 22% equity in your home, you should be able to cancel your private mortgage insurance and save that money each month. Think of it as a cost of getting your foot in the door of homeownership. It’s usually easier than saving up a 20% down payment.

Even if you could come up with a 20% down payment, you may choose to apply for a loan with a lower down payment. Then you could use the extra money for other things, like debt consolidation, your child’s college education, or future mortgage payments.

What does all of this mean to you? Use the resources available and you can be opening the door on your new home, even in this market.

Many homes on the market today are short sales, which take a long time to buy. Another option is to buy new construction, like these new homes in San Diego. Builders often help their buyers in obtaining home loans.