Financing for first-time buyers
More loan options exist than most first-time buyers realize.
Low-down-payment programs, mortgage insurance, gift funds, and assistance programs — the tradeoffs, without assuming you already know the terminology.
Direct answer: the right first-time-buyer loan depends on your down payment, credit, and whether you qualify for military or assistance-program benefits — not a single default program that fits everyone. Each factor below changes which loan is actually the better deal for your situation.
What actually differs between loan programs
Low-down-payment conventional loans
Some conventional programs allow a down payment well below 20%, usually with mortgage insurance until enough equity builds up.
FHA financing
More flexible credit and down-payment requirements, but mortgage insurance often lasts for the life of the loan rather than cancelling at a set equity threshold.
VA financing
For eligible veterans and service members — often no down payment required and no monthly mortgage insurance, though a funding fee typically applies.
Mortgage insurance cost and cancellation
Whether and when mortgage insurance can be cancelled varies meaningfully by loan program — worth understanding before choosing one.
Gift funds from family
Family gift funds can often be used toward a down payment, but lenders require specific documentation showing the funds aren't a loan you have to repay.
Down-payment assistance programs
Various state and local programs may reduce the cash needed to close — eligibility, terms, and availability vary and change, so confirm current details directly with a lender.
The lowest rate isn't always the cheapest loan
Mortgage insurance and program terms can matter more than the rate.
A slightly lower rate on one program can still cost more over time than a slightly higher rate on another, once mortgage insurance, funding fees, and how long each type lasts are factored in. Compare the full cost, not just the headline rate.
Run the loan program comparison →
Downside cases
What to watch for in first-time financing.
- FHA mortgage insurance often lasts for the life of the loan rather than cancelling once you build equity — a real long-term cost difference versus some conventional options.
- A very low down payment usually means a higher monthly payment between principal, interest, and mortgage insurance combined — model the full payment, not just the purchase price you qualify for.
- Accepting the first rate quote without comparing another lender means you may never know whether it was actually competitive.
National considerations
FHA, VA, and conventional loan-program guidelines are set nationally and shift with monetary policy and lending conditions.
Utah considerations
Down-payment assistance programs and eligibility vary by Utah county and change over time — a lender can confirm exactly what’s currently available where you’re buying.
Compare your options directly
Loan Program Comparison
01Compare conventional, FHA, and VA financing side by side. About 5 minutes.
Mortgage Affordability
02See the maximum price your income and debts support. About 5 minutes.
Points vs. Lender Credits
03Find your break-even point on paying for a lower rate. About 3 minutes.
Frequently asked questions
What's the minimum down payment for a first home?
Do I have to use FHA financing if I only have a small down payment?
What is mortgage insurance, and when does it go away?
Should I get quotes from more than one lender?
Are down-payment assistance programs worth using?
Author: Todd McClean, Realtor® | Real Estate Investment Strategist, Mountainland Realty, Inc.. Reviewed July 20, 2026. This page provides general real estate and financing information and is not legal, tax, accounting, lending, securities, commodities, or financial-planning advice.
Next step
Compare financing for your first purchase.
Tell us your down payment, credit range, and timeline.