More than four out of ten first-time home buyers opted for no-money-down loans last year. Does this spell disaster in a cooling market?

According to a report put out by the National Association of Realtors 43 percent of first-time buyers put no money down last year.The median new buyer only put 2 percent down on a $150,000 home in 2005, the report said. Half of all new buyers put down more than the median and half less.

The possibility of a cooling housing market coupled with rising rates on adjustable-rate loans could leave many of the new home owners owing more than their homes are worth. PMI Mortgage Insurance said that there is a 50 percent chance that home prices, particularly on the coasts, will decline in the next two years.

While the 30-year fixed rate mortgage still remains the most popular option with home buyers, the Mortgage Bankers Association told the paper that roughly one-third of homeowners take out these higher risk loans, which include no money down, interest only or minimum payment mortgages.

Before you jump on the bandwagon look at how long you plan to be in the home.  Also ask yourself if you were to sell your home in the next few years and find yourself upside down in the mortgage can you handle payingto put yourself upright.