First time homeowner loans are available from a number of sources, from government backed lending agencies like the FHA or VA to standard lenders. Of course, if you do not have a down payment to put down on your house, you may be more limited in who you borrow from or your loan may cost you more money. As such, it is important to do your research to understand what loan options are available to you, especially if you don't have cash to put down.
Most lenders require a 20 percent down payment to purchase a home. The purpose of the down payment is to protect the lender. The home you are buying is supposed to be collateral that guarantees the loan, which means that if you don't pay, the bank should be able to take the house and sell it to get their money back. If you put nothing down and the bank finances 100 percent of the house, it is risky for the bank because if the home falls in value, you may owe more than it is worth and the mortgage will be undercollateralized.
This doesn't mean it is impossible, however, to buy with less than 20 percent down. You have a few options available to you, especially as a first time home buyer. You can, for example:
As a first time home buyer, the process of getting a home and mortgage can be very confusing. It is a good idea to get help from a real estate lawyer and/or mortgage professional to make sure both the agreement to buy the house and the agreement for financing are fair and reasonable.