Although no loan is better than any other, most first-time homebuyers buy with a Federal Housing Administration (FHA) mortgage. The reason this loan is the most popular is that it was designed for the first-time buyer.

The FHA loan requires a lesser down payment than most mortgages and has easier qualifying criteria than most conventional and veteran loans. The standard FHA loan requires a down payment of around 3 percent. This will vary depending on the price of the house you select and whether you pay your own closing costs.