Buying a House - FHA, PMI, or Wait?

[PittMan]

My wife and I have been married for about a year now.  Currently we rent a townhouse.  We want to buy a house, but I'm not sure what makes the most sense for us right now.  

We'd like to buy a house in our area.  Average price for homes in our area that we'd be interested in buying is around $250,000.  Currently, we only have about enough in savings to cover a 5% down payment ($11,000 - $13,000).  Should we look into an FHA loan?  Would it be possible to qualify for a conventional mortgage with PMI?  Would we be better off waiting until next summer when we'll have 10-15% available for a down payment?  

I have a solid employment history with the same company for 6.5 years.  My wife has about 1.5 years split between two employers.  Prior to that, she was a full time college student.  

I'll be glad to provide more information.  I'm just looking for some general advice on what makes sense for someone in our position.  We want to get into a house and start a family as soon as we can.  We also don't want to miss out on lower rates, as they seem to be going up.  I just want to get opinions on whether or not it's smart to look sooner, or save up more for a down payment and risk higher rates.  

[canusa11]

Im no expert but I would do it now. You could end up paying thousands if the rates go up.

[tooleman694]

I would buy right now, with Conventional 5 percent down.

[PittMan]

That's kind of what I was leaning towards doing.  

[webhopper]

I agree, you should do conventional with 5% down.
PMI goes away at 78% LTV automatically.
If you want, you can throw extra money at principle. You can also look at options such as 15 yr or 20 yr conventional to see if they make sense to save you some real long term money.

Good luck! Ya I wouldn't wait I would try to do something now vs next year