Your monthly payment is determined by how much loan you can obtain. And the amount of house you can afford is determined by the combination of that loan amount plus how much you can put down as a down payment. For example, if you had a $800 a month payment at 3.5% fixed for 30 years, that would allow you to borrow $178,156. If you had $20,000 to put towards a house, then that would mean you could afford to purchase something in the $200,000 range or lower. Are there homes you can purchase for this price? Yes, but it depends on what location you are talking about. Some of these homes may require some repairs, so you would have to budget for that as well.
I work for an REO brokerage, so we deal with homes that have been foreclosed on. You can sometimes find deals there, although the market has changed, and homes priced under $200,000 are in high demand. Give me a call, and I will be glad to help.
Long Beach, CA