The first time home buyer – what an exciting time! But it’s also a frightening and challenging time. Unless you’ve done everything leading up to this moment right, you’re probably going to be faced with some issues such as finding good financing sources. Here are some tips to get you on the right road early, and to correct some of the potential problems.

Start saving early. Especially if you have limited credit history on your credit report, the first time home buyer should be able to offer a sizable down payment. Lenders are naturally wary of first time home buyers, and lowering the amount you need to borrow will help you get a first time home buyer loan at a better rate.

If it’s too late to start saving early, start looking carefully at your funding sources. There are some helpful first time home buyer programs offered by lenders. These mortgages sometimes offer better rates and terms and may even assist with the down payment for the first time home buyer. Ask your bank or lender about special first time home buyer mortgage rates.

Some areas offer incentives for the first time home buyer. You may find a first time home buyer program that only applies if you buy a home in a particular area and pledge to live there for a specific period of time. As cities and neighborhoods seek ways to rebuild areas that are falling into decline, these first time home buyer incentives are a way to encourage families to invest in that rebuilding effort.

Patience is a virtue, but never more so than for the first time home buyer. There are lots of hoops to jump through on your way to becoming a home owner. Some lenders require first time home buyers to go through money management classes that will stress the importance of making mortgage payments on time. Go into these with an open mind – you might just learn something important!

Be sure you can make those payments. Whether you go through the classes or not, take time to create a workable budget and realistically consider your financial status. Are you going to be able to make the payments on time, every time? If you have doubts, take a step back and reevaluate the situation. If you, as a first time home buyer, find you can’t make payments, it’s going to impact many years into your future. Not only are you going to have trouble keeping your house – your first house – you’re probably going to find it impossible to purchase your second house if you’re faced with foreclosure on your first.

Be prepared to settle for less than terrific rates as a first time home buyer. As a first time home buyer and a young consumer, you may not qualify for those great rates and terms advertised by lenders. But if you can make the payments on time, every time, for a couple of years, you’ll likely be able to renegotiate better rates. Meanwhile, keep your credit dealings completely perfect. If you use credit cards, limit the use so that you know you can make each payment, and make it early! There’s nothing worse than being credited with a late payment because a letter was tied up in the mail for longer than you expected.

A first time home buyer does have some hurdles ahead, but the ultimate goal is certainly worth the effort.

Buy when times are hard. Buy when blood is running in the streets. Buy after a flood, blizzard, riot. During such times, insurance firms and banks have properties they don't want. Owners are also desperate, as they suffer the anxieties of having to feed a white elephant.

Winter and summer are real estate's dead seasons.  Check the units in the spring or fall. At the start of winter or summer, bid on what is left.  In the summer, sellers who don't have their houses sold by June start worrying if they'll be out in time for their children to change schools.  In the northern states, November and December are panic times for sellers, especially if the house is vacant.  Thoughts of heating bills and water problems loom large.  Any buyer looks good at that time of the year.  During the winter, sellers tend to price their properties more realistically because there are fewer buyers.  Because there will be less demand for mortgage money during this time, affordable mortgages may be easier to get.

Try to find a motivated seller, someone who wants to sell for such compelling reasons as divorce, death, a job change, or old age.  Brokers generally aren't too candid about the seller's motivations.  And, as agent to the seller, the broker doesn't have to reveal these motivations if that is what the seller wants.  However, you should get a sense of the seller's desperation by his reaction to your first offer.

In some states, in the eyes of the law, the broker represents the seller until a purchase agreement has been signed.  At that time, the broker is also obligated to act as the buyer's agent. Even though the law is changing in this regard, question whether your broker can truly serve two masters, since he has a financial interest in representing the seller's position.  That is UNLESS you have hired your own Buyer Broker to represent YOUR best interest in the transaction.