Your fist step is to ge pre-approved for a loan. Contact a local lender professinal to get that done. This will establish your price range of properties that your agent can use to find homes that match your criteria. Yes you can look at town homes that are listed at a lower price than what your leder has approved you for. Then go out with your agent and learn about the market by viewing some of the homes. This will help you refine your search and identifiy a great deal when you see one. I wish you all the best.
Need 20% down, very few exceptions.
Your monthly payment cannot exceed 50% of your gross income. Monthly payment is broken down as the mortgage itself, property tax (prorated monthly), home insurance, HOA fees (townhouse), any loans you currently have, and the minimum payment on your credit card balance.
If you meet the above requirements, your credit score will determine the tier of risk you're in, and therefore you interest rate.
Hope this helps, it's not that bad once you have a professional with a computer to do all the math for you.
Best of luck.
Korene L. Clopine-Seaman
Senior Mortgage Originator / Team Leader / Mortgage Lender
AZ License # LO-0916745
Direct Phone: 623-340-0934