So you are a first time home buyer and you have no idea how to decide which mortgage is the right one for you?!

I can help guide you a little with this article but bear in mind that no one can give you perfect answers unless they know your whole scenario.

I am going to detail this in Question and Answer form to make it easier for you, the consumer, to find the answer you are looking for.

1. Do you have any down payment money saved up?
The answer to this question determines how much Loan to Value (LTV) you will need to borrow. Simply stated, LTV is the percentage of the appraised value OR asking price you will need to borrow. For instance : If you have a 20% down payment on a $200,000 purchase price/appraisal, your down payment would be $40,000. Your LTV would then be 80% since you need to borrow 80% of the price/value.

If you don't have any down payment money saved up (and most consumers these days don't), you may have access to a Down Payment Assistance Program (DPA) in your area. There are several of these available locally and nationally (Genesis, Nehemiah, AmeriDream) and you will need to either ask your loan officer about them or do your homework. Generally, the national DPA programs offer 3% down payment and your seller typically contributes another 3% toward your closing costs.
This leads us into discussion of loan programs.

2. Do you qualify for an FHA loan?
If you do qualify (your loan officer can determine this), you can then take advantage of the 97% purchase loan and combine it with the 3% DPA and 3% seller paid closing costs. This leaves the first time home buyer with minimal out of pocket expense. Also ask your title company for a first time home buyer discount. This could save you hundreds of dollars additionally.
If you can not use a DPA program and you do qualify for an FHA loan, you may also qualify for a MyCommunity loan. These are offered nationwide as well and they are 100% financing. No down payment needed. The credit parameters are similar to FHA loans and they are qualified using the same computer grading system as FHA loans. Ask your loan officer about MyCommunity loans and if he/she doesn't know what these are, do some Internet research on your own and find a lender who offers them.

3. Does interest rate or monthly payment matter most to you?
If you are rate conscious then you won't care if your monthly payment is Interest only or a 30-50 year amortization. But if you are like 75% of the rest of us consumers,

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