First-time homebuyers are a significant segment of the real estate market, making up 34% of all homebuyers last year. As the market heats up and eyes turn to homeownership, lenders and agents have an opportunity to position themselves as trusted advisors for this segment. Helping to make the dream of homeownership a reality for first-time homebuyers (FTHB) requires understanding of what motivates them, what unique challenges they face, and the resources available to ease the process.

While the benefits of homeownership are well understood – a predictable monthly payment with a fixed mortgage, potential tax benefits, wealth and equity accumulation and security, to name a few – often the main reason that first-time homebuyers give for pursuing this major purchase is simply the desire to own a home of their own.

For most FTHB, buying a home is the most expensive purchase of their lives and they rely on family and friends, and the experts they meet, to coach them through the process.

So, what are some of the challenges facing FTHB? According to the National Association of Realtors (NAR), 41% of FTHB carry student debt with a typical balance of $29,000. For many people who are considering homeownership, this debt drags them down both financially and emotionally, and prevents them from saving for a substantial downpayment.

This leads to the other major concern – having enough money for a downpayment. Saving for a downpayment can be one of the most difficult steps in the home-buying process. FTHB have to balance maintaining their current debt while also setting aside the proper funds. However, saving may be easier than they realize. There is still the myth that a 20% downpayment is required to buy a home.

In fact, there are many sustainable options that require significantly less money upfront. One such option is mortgage insurance (MI), which is a tool that creates a path to homeownership by allowing buyers to purchase sooner with less money down. With private mortgage insurance an eligible buyer can secure a conventional mortgage with as little as a 3% down.

Even when a FTHB has heard of MI, the second misconception is that it is expensive and lasts the life of the loan. In reality, once the borrower has built up at least 20% equity in the home, MI payments may be eliminated. The ability to drop the MI payment is not available with FHA loans, which require mortgage insurance payments for the life of the loan. Ultimately, an FHA loan may cost the borrower significantly more money over time.

The third misconception is that many borrowers think that you need a perfect credit score to be approved for a home loan. The truth is that the minimum FICO credit score required for a conventional loan is 620. However, a higher credit score can help borrowers qualify with a better price.

Finally, many FTHB are so focused on saving for a downpayment that they forget about the closing costs, which can range anywhere from 1%-6% of the purchase price of a home. Most FTHB know that they can shop around for different mortgage rates, but don’t realize they can shop for their title company, mortgage insurance company and some other services. Comparing options for these services can help the FTHB save money and make homeownership less of a financial challenge.

Knowing and understanding a buyer’s concerns and positioning yourself as a resource with information, is an excellent way to build trust and future referrals with a FTHB.