1. Get a 2 bedroom apartment at our complex.
2. Buy a trailer. My mom's friend is selling a mobile home less than a mile from where we are now. For all intents and purposes we would be getting the mobile home for free. We would only have to pay lot rent.
3. Buy a condo.
1) If you can't find a suitable home to purchase in your price range, and the living conditions at the apartment are acceptable both physically and financially, do it.
2) The situation you lists is about the ONLY way I would ever suggest a trailer. Trailers are consumables. They are like a battery, you buy them to use them up. They depreciate just like a vehicle does. Plus, they are a PITA to get financing for, and if you do it will he hellaciously expensive.
3) NO! NO! NO! NO! NO! NO! NO! The only time I recommend a condo is for people who can buy them outright. Aside from condo's being hard to finance (changes in mortgage regs made sure of that) they tend to be hard to market in some areas. Plus, your condo association fees are often as much as the payment. You are also beholden to condo rules and regs, and don't be surprised when they hit you with an assessment for some emergency repair.
The first thing you need to to is set a budget for your total house payment (principal, interest, taxes, insurance - PITI). Then meet with a lender and see if your budget number and your ability to be approved are compatible. Then investigate the market in your area and see if there is a property that meets your budget and geographic requirements.
Also, don't fall into the "Big Down Payment" trap. In most areas the principal and interest part of the payment runs roughly 60% of the total payment. If you put 10% down you aren't knocking 10% off the payment. You are knocking 10% off of 60% of the payment.
Also, count on interest rates going up. We've become spoiled to fixed interest rates in the 5-6% range. That's low. Very low. The 30 yr average for fixed rates hovers around 8%. Okay, so you saved for two years and have a 10% down payment, but the interest rate is now 7%. Will the downpayment savings offset the increased interest? Are you factoring in market growth/shrink in your area?
Examples:
Typical current 100k FHA guaranteed mortgage
3.5% down
5% ficed rate
Estimate $350/month taxes and insurange
P&I $518.03
PITI $868.03
Same loan, but at 10% down and 7% interest
P&I $483.14
PITI $833.14
You save $418.68 per year on the payment by waiting so that would be the good thing to do, right? Not so fast. There's more to the equation. Let's say your area is experiencing an average market growth of 3% (30 yr average). That's $3000 a year in market appreciation.
But wait, there's more...!!
In some areas the market is still slightly depressed (from 5-20%, depending on market and how the evaluation is calculated). For the $100k above you might be able to find a house that will appreciate faster over time due to market depression rebound. (History says it will happen). Let's be conservative and say that you will realize an extra 2% annual appreciation, an annual total of $5000.
There's lots of stuff to consider other than just the downpayment and interest rate. Do your research before making the leap.
Brad