Buying a home may seem scary, especially if it is your first home. New, unfamiliar terms are being thrown around, and it involves more money than you've ever spent. It seems so permanent! But with good research, you will gain a better understanding of the homebuying process, and you will also be able to approach it realistically and without feeling overwhelmed.

Overcome your fears by knowing what to expect. Some people who are quite eligible to buy their own home have deep-seated fears that are keeping them from taking that important step. This is understandable. Whether you have been renting for several years and are a first-time buyer or you already own a home and want to understand the process better before making another purchase, you are entitled to be a little nervous about the whole homebuying process.

A home is, after all, likely to be the largest single purchase you ever make. Paying for it will take the better part of the rest of your life. So approaching the process with respect — even a little fear — is only natural. But don't let that fear get the better of you and keep you from experiencing the joys of homeownership.

The following sections describe the most common fears about homebuying and homeownership. By taking them apart one at a time, you'll see that buying a home is just another stage of life that you will get through. You may even enjoy the process.

Fear #1: I'm Worried about the Economy

What if you buy a home and then the economy collapses? Media and anti-administration (regardless of which administration is in power) critics continually forecast total economic collapse, but that has not happened yet — no matter how bad times have been, no matter how the stock market rumbles, and no matter how high unemployment rates get.

Also, homes are not subject to the high sensitivity that short-term investments such as stocks are. They do react to the overall economic climate — sales prices rise and fall — but not as quickly or radically as stocks.

By all means, keep an eye on the economy; bad times often present excellent opportunities to buy. But don't let periodic downturns alarm you into thinking it's all going to tumble down, taking you and your home with it. If you buy wisely — and reading this book demonstrates your seriousness in learning about the real-estate market — your investment will be safe from the natural ebbs and flows of the economy.

Fear #2: I'm Afraid of Being Denied a Loan

Lon Cohen was working with a young couple who really wanted to get out of their rental situation and into a new home. The senior loan officer for M&T Bank got to work helping the young, first-time homebuyers, who both had poor credit from the past. They weren't eligible for any normal first-time homebuyer programs, but were willing to work hard to get into a home. For six months, he helped them track down collections that had traded hands multiple times — credit cards, other loans, and medical bills — getting them paid or dismissed.

In the end, they were able to buy a home with an FHA loan. No matter how heartbreaking your situation may appear, and how painful it may be to face, know that with guidance from a lender — a good lender you trust — can turn your situation around.

Lending institutions are in the business of lending money, and unless the country is sailing through some very troubled economic waters, making mortgage money available is their job.

If you have had credit problems in the past and you're worried that they will work against you in trying to buy a home, you may well be wrong. Even if you have filed for bankruptcy, homeownership can still be within your grasp. Of course, it is wise not to go house hunting until you are back on solid financial footing.

If you cannot get a loan now, ask your lender what you can do to improve your situation to be able to get a loan. With a stable financial situation, no matter what your past, homeownership is still within your reach.

Fear #3: I Don't Have Enough Money for a Down Payment

Traditionally, you have always heard the recommendation of putting 20 percent down. But today, this is practically impossible for many first-time homebuyers. In the last few years, new programs have emerged allowing buyers to put down as little as 0–3 percent.

According to Realtor.com, there are also programs available that not only cover down payments, but also closing costs. Some opt not to do this because the less money you put down the higher your monthly payments will be. And if you are able to put 20 percent down, you immediately have equity in your home and don't have to pay private mortgage insurance.

What if you need help with closing costs? Inspection fees, attorney's fees, loan fees, appraisal costs, cost of a title search, and so forth tend to fall under closing costs. Many times, buyers have trouble paying for these costs. One common trend is to ask the sellers to pay toward your closing costs.

For round numbers, say the seller is selling the house for $100,000. Say under your loan terms, the lender allows the sellers to contribute up to 6 percent toward your closing costs (this varies — ask your lender). There are caps on how much the seller can contribute toward your closing costs. Generally, it's up to 6 percent on a 90 percent or less LTV on a conventional loan, up to 3 percent on a conventional loan above 90 percent, and generally up to 6 percent on FHA loans and 4 percent on VA, says Teesie Howell, senior loan officer for National City Mortgage, a division of National City Bank. Ask your lender.

The key is having great credit and doing your research to find a reputable lender that can help you meet your needs. Always be upfront with your lender and real-estate agent about your financial situation.

Fear #4: I'm Confused About What to Buy

The diversity and the wide range of prices are bringing homeowning opportunities to many more Americans. Your decision whether to buy a house, a condo, a co-op, or any other style of home depends on your own situation. Several factors go into selecting the right home for you. These factors include the price you can afford, the size of your family, your commuting time to work, and what the realty market around you has to offer.

Here are a few important points to remember:

• Go with your instincts. If you want a loft and it fits in with other areas of your life, then buy a loft.

• Keep an open mind. Consider all home styles and neighborhoods, even those that may not initially seem ideal. You may find that one of them is just right for your lifestyle and interests.

• Think about what type of neighborhood you'd like to live in. You say you would not be caught dead living in the city? Think the suburbs are too sedate for you? You may be surprised to find stable neighborhoods with vibrant communities in unexpected places.

• Visit a variety of places for sale in your area, such as new condominiums and new single-family home developments. Take in all that your area real-estate market has to offer. You will learn a lot about neighborhoods and house styles, and the confusion will eventually disappear.

• Consider which homes you feel drawn to. After conducting various investigations, you should find yourself drifting back to one or two favorites.

Fear #5: I Don't Know Anything About Home Maintenance and Repair

There are three general types of homeowners: those who do all the work around a house themselves, those who do some and farm out the rest, and those who call in repair people for everything. You may think you belong to the last group, but when you buy, you will probably surprise yourself with your abilities — and your interest. When you are in your own home, puttering around can be enjoyable. After all, you are putting time and money into your own place.

Generally, buyers find they grow into becoming responsible homeowners in the same way one grows into other roles requiring responsible action and decision-making. You do not have to learn everything at once, and you will be pleasantly surprised at how much help is out there — including help from relatives and friends, your new neighbors, the folks at the lumberyard, and the salespeople at the home center. They will gladly pass along tips on where to find craftspeople, how to repair widgets, and how to manage all the other complexities you will run into in your home.

And, of course, there are websites and dozens of books on the market about every aspect of home repair.

Just learn enough about your home to recognize a problem when it occurs and to know whether you can fix it yourself or must call in expert help.

You don't need to know the intricacies of what makes a heating or plumbing system work, you only need to know when a job requires outside help.

If you are still concerned about maintenance, consider buying a condo or a co-op. Or how about sharing a two-family house with a relative or friend so that you can share concerns about a leaky roof?

Fear #6: I'm Afraid I'll Discover Too Late That I Can't Afford the Home I Buy

That is not likely to happen. Unlike a landlord, who generally does not care how much of your income you have to spend to pay the rent, a mortgage lender has a vested interest in ensuring you can make your monthly payments; after all, it's their money. They will ensure that the house you buy stays below a certain percentage of your income so you don't get in over your head financially.

In addition, reputable real-estate agents will not show you homes out of your price range. Before you see even one home, your lender and realestate agent will have determined the price range you can afford. So as you search, there are two people keeping you from getting carried away by a home you cannot afford.

Finally, if you have the home inspected by a professional before you buy it, you can avoid unexpected expenses. An inspector should give you a clear idea of what is in good shape and what needs replacing immediately. Then, you can negotiate repairs with the seller to get it fixed before you move in.

In sum, the homebuying process includes a number of checks to help ensure the house you purchase is one you will be able to afford.