The government has ways to help you out. There are a few wrinkles that you should keep in mind.
The U.S. government wants home ownership. To help people out, they do two things:
- Offer a clearinghouse for mortgages, making it easier for first-time buyers to get a loan. Fannie Mae and Freddie Mac are government clearinghouses which are effectively a supermarket for loans. Cleanup in aisle three.
- Make interest on mortgages and many of the costs associated with closing a loan tax-deductible. In other words, the government (and tax payers) subsidize mortgages. Mortgage interest (up to a loan of $1.1 MM) as well as property taxes are deducted from your adjusted gross income before calculating how much you owe. Needless to say, the higher your tax bracket, the more deductions matter to you.