All of the answers below are good. I would suggest you check out the mortgage calculators mentioned or try mine on my website noted below. Then your best bet is to talk to an excellent mortgage broker who will help you work the numbers to fit your lifestyle and comfort zone. Try Tim Wood of Mortgage Guaranty at 415-462-2777 or I am happy to email you a list of brokers and/or lenders to call. Prices are not expected to decrease now. Naturally, it depends on what really happens in 2008 to our economy and what the Fed does with Interest rates. If you keep waiting, however, opportunities can pass you by -- especially if the market does appreciate and Interest rates rise. Good luck on your search!
There is a formula to go by, but it really depends on your spending habits, other expenses, family size, etc. Plan on the property costing you around 50k a year. Costing might not be the right word, you will have tax benefits and build equity.
Today Conforming Loan Rates(a loan 417k or less) are about 1% less then Non Conforming Loan Rates(a loan more then 417k). Based on your incomes and todays' loan rates, you should be comfortable with a loan amount under 417k. So be sure to talk to a mortgage broker about the different rates for conforming and non-conforming loans. Regarding whether to wait or not, no one can "time" the market. It depends on your personal situation and motivation to purchase. If you intend on being in this home for more than 3-5 years, I would encourage you to start looking. You have clearly taken the first step with your Savings amount, good luck with your decision.
About 600,000 should be a doable amount to take on, depending on your other debts such as car payments or credit cards. Also remember to take into consideration property taxes, home insurance and home maintenance. And there will be tax advantages to home ownership for you as well.
If your lease is coming up and you're looking to buy, you may want to negotiate a month to month renewal, or a shorter than yearly lease to allow you time to 1) meet with a mortgage professional to help you answer your question in detail and to write you a pre-approval letter; and 2) interview a few Realtors to find a professional that will help you identify a property you want. You can also begin searching for properties at http://www.cleanoffer.com to begin to see the properties on the market. Happy hunting!
We expect 2008 to be a great year for investors and buyers as there are lots of good opportunities for people with the cash, credit and courage to act.
I always counsel my clients to pray about it and then follow their gut instincts.