Late to the party on this thread, so apologies if I repeat anything already said above.
To find a mortgage:
Shop around for mortgages that fit your needs. I would recommend talking to a lot of loan officers at different banks or credit unions. In other words, don't pay a mortgage broker, be your own. In my case, we went with a conventional portfolio loan, a "0 down" loan from KeyBank called Key Community. This program allows us to offer less than 3.5% down and use our capital (about 22k for us) towards repairs, inspections, closing costs. It's not the only program out there like it, but you have to go into the lenders and see what products they offer. Don't apply for anything you're not sold on - apply for pre-qualification only after you're confident with the loan product you've chosen.
How you handle the price tag of your new house is up to you. My husband and I went for a larger, nicer house, but also plan on renting out the bedrooms to supplement the cost of the mortgage, which allows us to have more house/bigger "forced savings account"/more appreciation, and allows us to save a lot more of our monthly income.
Remember that the cost of your home purchase is more than the down payment. Our house purchase (Closing on 8/1, woohoo!) has turned up the following math
Starting Amt $22,000.00
Closing Costs $10,000.00 (Bank fees, insurance, taxes, etc - on ~$280k mortgage in HCOL area)
Earnest Money $2,500.00
Cash At Closing $2,500.00 (Down payment is earnest + cash at closing)
Auto Insurance $900.64 (Decided to buy a full year of auto ins in addition to our ho's ins purchase, represented in closing costs)
Lawyer Retainer $750.00 (Payment to draft lease for renting out spare rooms)
Electrical Panel $3,000.00 (Unsafe panel requires replacing, buying house knowing it needs this repair.)
Homebuying Class $75.00 (required by our lender)
Inspection $665.00
Wiggle Room $1,109.36 (Leftovers for painting, new appliance, etc)
When it comes to credit stuff, I found our loan officer at KeyBank to be very supportive. We first contacted KeyBank in Feb 2014 looking to qualify, and the loan officer in our area did a great job of helping us shore up our credit, understand the costs we could expect, and getting us on the right track to qualify for their low down program. It was mostly advice I already knew (thanks, Mustachians!) but helpful to have it reinforced by the loan officer. I guess you could say that's how I knew he was "good". :)
Good luck with your house hunt!
Kayla
EDIT REASON: realized my math was lazy and wanted to fix it. :0