In order to evaluate which direction is best for you, it is best to review your financing possibitilities with a good local mortgage lender. With today's historically low mortgage rates, you may have more buying power than you think (depending on location, property taxes, maintenance fees, etc.). Just call them and they will ask you some questions about your credit rating, income and debts, and give you the information you need about monthly payments, how much cash is needed (at least 3.5 to 5%), etc.
Coldwell Banker Home Mortgage
Wells Fargo Home Loans
Then contact me and let me know if I can help you find something!
Coldwell Banker Residential RE