With the cooling of the housing market, first-time buyers need to be assertive in elbowing their way up front of the home-buying line -- now. The cooling, or normalizing, doesn't mean the market is tanking. It means just what it says -- it's going to be more normal. Housing will continue to appreciate, sellers will continue to sell and buyers will continue to buy. The question is whether buyers will take advantage of this leveling off and get a good deal while the sellers are forced to give up a few things.

One of the items that was sidelined during the searing market the past few years, was the very commonsense financing offered through various government and private agencies to help first-time and cash-poor buyers get into the home market.

The National Association of Realtors released its annual Buyer Survey a couple weeks ago, revealing several interesting points. Namely, 40 percent of all buyers are first-timers, of those, 43 percent used no-money down financing. In addition, the use of the internet for all buyers has crept up to 77 percent and there's no reason that trend will falter. Interestingly, an old fashioned tool for agents, the open house, was the second largest used tool by buyers to look at houses, standing at 71 percent of all buyers.

Search "first-time homebuyer" on the internet and you'll have a mere 12.4 million web pages pop up. Let me narrow it down for you so you can find the financing of choice for home buying in today's market.

• The U.S. Department of Housing and Urban Development is a great first stop. The HUD programs are a lot more forgiving of credit issues than most of the conventional programs on the market. In addition, the site is loaded with plenty of information on how to get access to the financing the organization insures. Keep in mind, a HUD loan only means a mortgage program is "insured" by HUD, not funded by HUD.

• Both Fannie Mae and Freddie Mac are fabulous resources for first-time buyers. These two companies provide the largest source of funding for all mortgages across the country. I refer you to them, rather than an individual mortgage broker site, because they provide the most non-biased information about the programs they offer. Nevertheless, don't overlook mortgage company sites who take the Fannie Mae and Freddie Mac programs and may create hybrid loans out of these programs to make them even more favorable to the first-timer.

• The National Council of State Housing Agencies (NCSHA) is a nonprofit organization founded more than 30 years ago by the country's state housing agencies to "coordinate and leverage their federal advocacy efforts for affordable housing," according to the group's site. The benefit to buyers on this site is its' directory of state housing agencies across the country, including every state, the District of Columbia, Puerto Rico, and the Virgin Islands. The agencies monitor, lobby for and administer the disbursement of monies from federal programs that provide lower interest rates for consumers, along with several other benefits to first-time and low-income buyers. With a leveling off on the market, buyers should reacquaint themselves with these very stable programs.

Finally, here are some tips for the first-time buyer as you look to find financing for your home.

• While all the above websites can be very helpful in educating yourself, find a mortgage professional you can meet face to face. When you step into the process, it's best to have an experienced professional who you can call and meet with at any time. Get a referral from friends, family, co-workers or your agent as they all probably know someone who can get you through the process.

• Act sooner than later on applying for your loan. As of today, the interest rates are lingering around 6 percent. All the mortgage rate watchers (i.e., economists) are predicting a rise in the mortgage rate upwards to 6.75 or 7 percent by the end of this year. Delay much longer and you may lose buying power just by waiting. Your monthly payment will stay the same, but your house price may drop because of an increase in the interest rate.

• Look at hybrid loans to help keep your monthly costs down. A hybrid is a program that combines two or more programs to eliminate mortgage insurance premiums -- which can be very expensive each month and cut into your buying power. Ask your mortgage professional about this product.

• Look around for help with the down payment. Some agencies have down payment mortgage. You could get help from family. Don't forget you could even sell some items in your house that could give you more money for the down payment. Could you sell the car (the one with the payment) and buy one with cash? That debt relief alone could get you into your home a lot easier than any other move.

• Finally, research, research, research, but don't get frozen into inaction. At some point you need to dive in and see if the home-buying water is fine for your. Best of luck.

Published: January 27, 2006

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