BIRMINGHAM, Ala. -- Low interest rates and competing home loan offers have sparked a real estate frenzy, but many first time homebuyers don't know how to begin financing a home.

For Mark Pynes, a first-time homebuyer, shopping for real estate started long before he began touring homes. It started with a crash course in financing options. Until then, he knew little about home loans.

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"Absolutely nothing ... I knew you got a loan to buy a house, that's about it," Pynes said.

Pynes did a lot of research online, but said the overload of information was confusing. That's the reaction most first-time buyers have, according to Chris Hughes, a mortgage lender for Southern Eagle Mortgage in Birmingham. His insider tip is to start with a phone call and find answers to your questions.

"A lot of first-time homebuyers think they have to have a sizable down payment when that's not necessarily the case because the 100 percent product, and even the ones where closing costs are absorbed, are really prevalent nowadays," Hughes said.

The process begins with a credit check, just like opening a charge card. Real estate agent Cerita Tucker-Smith said even problem credit often doesn't stop buyers from being approved for a home loan.

"There are a lot of credit counseling agencies that can assist the first-time homebuyer with their credit, if there are some issues they need to take care of," Tucker-Smith said.

The loan approval process is usually fast and includes dozens of options. The most popular option now is the zero-down deal.

"There are loans where you can finance 100 percent and even closing costs along with it," Hughes said.

But Hughes admits putting some money down is often what he recommends. He also helps buyers decide what kind of mortgage is best based on several simple questions.

"We can look at an adjustable rate mortgage if they're going to be in a home a shorter length of time, whether it be three to five years," Hughes said. "The advantage is you can get a lower interest rate."

Going through that process before starting a house hunt gives buyers more leverage when making an offer.

"If you're going to negotiate and a seller sees you have an approval letter from a mortgage company that says you're good to go and you can close within a two- to three-week period, that makes it easier to negotiate terms in your favor," Tucker-Smith said.

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