Mortgage Amortization is basically using the accounting technique for periodically lowering the book value of the loan. More simpler description may be like this: first we need to understand that our monthly payments have 2 parts: interest part cost of the loan, principle the main part. These are calculated monthly with the interest rate defined, also we should take in to account that every month our debt is decreasing as we pay. Therefore continuing the calculations for every month and writing them down a table of payments, we end up with the amortization schedule.
For more detailed and technical details you can check Investopedia article about amortization
First of all check the rates you can apply. Also you should check the down payment requirements, FHA loans can be as low as 3.5% down payment. If it says 20% down payment, this means you need to have at least 20% of the loan you are applying. You can check our Down Payment Calculator for more detailed down payment scenarios.
On the other hand please be aware of the terms in the name of risk management. Mortgage loans have very high loan terms, this means you are committing to pay the amount calculated for lets say 20 years. Imagine your self 4 years later, 10 years later, 15, 20... Are you expected to work in these years? Do you have other incomes or any savings that at least save you for couple of months. Also another thing is the rental value of the property, if you will rent the property out what is the expected rent price and what percentage it is covering your mortgage payments.
As you can imagine increasing the loan amount is just adding more risk in the long term. But if you don't have any savings and just applying for a loan increasing it as 1-2 months of payment might be a good idea. You can keep them in a saving account as insurance. Again need to mention these are totally depending on your conditions, earnings, savings, credits score etc. so any advice given here are totally personal and need to think twice before apply them.
Another thing is be careful with your due dates and make sure you are at least paying the minimum. If you struggling with it or interest rates are too high, you can consider negotiating this with your bank or even some banks offers loans with lower rates and transfers your debt to theirs if you can convince them that you are on good track.