If you are smart you will save as much as possible.
It wasn`t so long ago that the average down payment was 15%.
It`s only recently that a 5% down payment is more common.
Easy lending policies aside you shouldn`t take on more mortgage than you can afford.
If you are old school and save a 20% down payment that means you would still need to borrow $200000.
To be able to afford a $250000 home even with the big down payment divide the home cost by 3.5 to get the salary required to support the home.
In this case you would need a salary of around $71,500 a year.
Borrowing 200000 amortized over 25 years would give you monthly payments of $1,134.92 at an interest rate of 4.75%.
Don`t forget you will have insurance costs,
utilities and property taxes to factor in to your total monthly housing cost on top of the mortgage payment.
if you can save the 20% down payment you can see making $5960 a month in salary will only eat up
21% of your gross income.
Bankers use a 28/36 ratio to decide whether you are a risk or not.
No more than 28% of your gross income should service your housing costs with no more than 36% of your gross income going to total debt payments.
if you can stay in these ranges it looks like $71,500 a year in salary should allow you to afford a $250000 home so long as you make a nice big down payment and get favorable interest rates.