I would like to start the process of buying my first home...

[Teufelhund]

I agree with the others that you don't need a 250K plus home right now. Find a nice foreclosure in a good neighborhood and start to fix it up. Hopefully the housing market will turn around and you will have a nice chunk of equity to play with then.

+1 You don't want to be "house poor," as in stretching the limits of your income to make your mortgage. When we bought our first house, the bank kept trying to push us into a $350k+ house because of our credit scores and income. We opted for something under $230k and it has worked out well. Our mortgage payment is very low and we're able to pay extra toward principal every month. Since your interest on your mortgage is based on the amount you owe, the faster you pay down the principal amount, the less interest you pay over the life of the loan. (I'm just learning about all this too, this being my first house. Someone please correct me if I've got this mixed up in my head. I don't want to give any misinformation).