What is the best type of mortgage loan for the lowest monthly payment?

30 year fixed? 2/1 ARM? I need a loan with no PMI and low points and the lowest possible mortgage payment a month. What Im working with:

Credit score 600
Annual assets (Salary) 34500
Monthly Debt: 70
House loan amount: 106000
Available to put towards closing costs (Including down payment) 12000

Any ideas?

I am 21 and I recently started looking into some real estate listings just for the heck of it. I came across a couple of houses that are at or below $ 25,000, I went to take a look at them and they are in very nice condition as well as being in good neighborhoods, mostly because we are in a serious real estate slump here in Michigan. I feel like it is the right time to buy something especially so I can take advantage of the first time home buyer credit. What would be an ideal situation for me would be to purchase the home with a very low down payment and I do not know much about loans, but with a 10 year fixed APR mortgage, the loan would be extremely affordable. The plan would be that I could pay it off in ten years and either still live in it or sell/rent the property. My question is does this sound at all reasonable for me to be doing and are there even lending companies out there willing to work with low down payment mortgages that are that short of a term?

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