Wait or Buy House in Denver area?

[Royce Haynes]

My wife and I would like to mortgage a house in Denver. However, the house we like is $360k and we dont have 30% to make as down payment. It would take us at least 4 years to save that much and we'd rather wait than buy now.

The option of putting 3.5% down with a government loan is attractive, but our monthly payments would be high and we would have interest on 96.5% of the money loaned. Expensive.

We also thought about buying a condo/townhome, but feel that would be a segway away from saving for "the house."

I'm curious if it'd be beneficial to wait until we can put a 1/3 down on a house or take advantage of low interest rates, and put down 3.5% and get the house we want?

Note: I'm assuming that interest rates will be higher 4 years from now.

Suggestions/opinions welcomed...