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- 1). Check out the U.S. Department of Housing and Urban Development (HUD). HUD homes can be a good way to get a decent deal on a home because HUD sells homes as quickly as possible at market value, according to HUD.gov. HUD does not make the loans directly. HUD requires that you use a HUD-approved lender, which you can find through HUD.gov.
- 2). Contact a HUD-funded housing counseling agency. This agency lets you know if you qualify for a federal mortgage program through the Federal Housing Administration (FHA). This is a program for home buyers who may not have much money for a down payment or may have bad credit. First-time home buyers may qualify for a down payment of only 3.5 percent of the purchase price of the home.
- 3). Look to see if you qualify for a program sponsored through your state or local government. For example, Georgia offers housing programs through the Georgia Department of Community Affairs that offers low-interest rate mortgage loans. Your mayor's office or your local housing and community development office can provide you with more information.
- 4). Save money for a down payment. The bigger the down payment, the more likely you will be approved for a loan and the lower your monthly mortgage payments will be. In addition, if you put down 20 percent or more, you do not have to pay private mortgage insurance (PMI), according to LendingTree.com.
- 5). Find lenders through banks, credit unions, private mortgage companies or government lenders. Look for lenders that offer you the lowest interest rate. A real estate agent can help guide you to a lender that can offer you the most favorable deal. You can opt for a fixed-rate mortgage, where your interest rate stays the same or an adjustable rate mortgage (ARM), where your interest rate goes up or down, based on a financial index.
- 6). Look in your newspaper's real estate section to see the interest rates local lenders are offering. Visit lenders that offer the lowest interest rates. Ask the lender if the rates it quotes are the lowest for the day. Choose the lender that offers the lowest interest rate.
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