To be honest, I'm not happy reading any of the answers given so far. The reputation of the Banker or Broker you will be dealing with is of paramount importance. I can't stress enough that if you have not heard of them before, beware. Many "unknowns" offer ads that say they are lower in rate than many of the major Lenders you know of & heard of before. The old saying goes "if it walks like a duck & quacks like a duck, there's a good chance you have a duck on your hands". Mortgage Brokers are not capable of giving loans, only matching you with a Lender that is licensed to provide the mortgage. Much of the access Mortgage Brokers had to programs in the past has been taken away. Be careful. Ask lots of questions. And as stated earlier, if the Banker or Broker you are speaking to won't provide you, IN WRITING, with a GFE (Good Faith Estimate of Settlement Costs), run. No one should need you to give them $$ to provide this either.
Next, as Luke stated, credit scores are important. Borrowers with low scores can find that they become limited in what loan programs are available. More important in today's market is "verifiable income". The days of no-income loans is as extinct as the dinosaurs. (there are still a few programs left, but you will required to make bigger down payments & be subject to higher rates than those that can verify income). Down payment is the 3rd of the major factors. Larger down payments can allow you, in certain markets, to apply for a Conventional mortgage. Many markets have been classified as needing 10% or more as a down payment to allow for conventional applications. Those buyers that are working with less than 10% Down can utilize programs such as FHA. This is where I find a little fault with Luke's reply. FHA is not just for borrowers with weak credit. Having terrific credit, but limited funds should not keep you from buying.
Many states also offer special "State Bond Programs" meant for 1st-time homebuyers. In NY, the program is called SONYMA and details can be found at http://www.nyhomes.org. The FHA program requires only 3.5% down payment (as of 1/1/09). SONYMA still allows as little as 3%. Those buyers that are qualified Veteran's can also utilize the VA loan program. This is the only legitimate program available that allows purchasers to finance 100%.
Today's market, while depicted as "doom & gloom" by the media, is actually one of the best Buyers markets that has existed in years. Prices on homes have been reduced to affordable levels for many. Rates are at near historic lows. There are incentives for 1st-time homebuyers such as the Tax Credit made available by the Housing & Economic Recovery Act of 2008. If you are able, you should be out there looking to buy!
Please feel free to contact me personally for more information.

Rich Murphy
Wells Fargo Home Mortgage
631-382-2261

Hi Beth-

The type of mortgage you get depends on how much you put down, credit score, etc. Pretty much everything these days boils down between FHA and Conventional. Bottom line way to think about it - the more you want to put down or the better your credit, the more you would consider Conventional. The worse your credit or the less you want to put down, the more you consider FHA.

Every mortgage is custom suited to fit your needs so the more descriptive about what you are wanting to do, the better I or anyone else can assist you in obtaining the correct mortgage product,

I know I am outside of your area but I originate loans in New York often and I would welcome the opportunity to answer any of your questions and assist you any way possible.

Call me if I can help
Luke Allison
Flagstar Bank
828-777-8828

Beth,

Lynn's response is accurate. I would add that you find a broker/banker in person vs. on the web. When all is said and done, rates among all shouldn't vary by more than 1/4 point. Pay special attention to origination fees that can vary greatly. Credit is tight now and higher down payments are required.

Good luck!

Usually banks are more expensive. Approach both request for all they state provide you a GFE (good faith estimate) place all info. on an excel spread sheet compare each in detail. There can be deals that appear better till you look at the overall bottom line. GREAT QUESTION.

http://www.lynn911.com http://www.homes-for-sale-dallas.com