[Fizgig]

Many people don't put 20% down these days. I'll admit it - I didn't. I only put down 5%. That could be a bad decision most of the time, but I got my house for way under market value and at the historically lowest interest rates ever. I can easily afford it, but at 27 when I bought the house, I simply hadn't had enough time to save up $30,000. However, I did/do have very little debt - about $3000 in student loans and $3000 on a car (now paid off). If I had a lot of CC/other debt I would have been far less comfortable buying a house.

Do NOT overcommit yourself on a house. The 45% debt to income ratio is what the lenders use, but anything over 30-35% will put a strain on you. There is a tax advantage that will help you out - My monthly payment is about $1100 including taxes and insurance, but because of it I get $200/mo extra takehome with the tax advantage.

I personally don't think that someone has to be debt free and have 20% down to buy a house. It can still be a good decision if you buy something affordable and get a low interest fixed rate, and still have plenty of room in your budget for everything else AND savings. Make sure you price out taxes and insurance in considering what you can afford. Also, chances are your utilities will be much higher, and budget in $100-200/mo to throw in a savings account for home repairs. If the fridge breaks or the roof starts falling down, that's all on you.