Any brehs in the military use they VA loan wanna speak on their experience buying a house and how much they approve you for?
Also this is a question for everyone how much % do you put down when you buy a house me and my wife once we clear our debt are trying to purchase a new house
You can put down as little as 3.5% of the purchase price if you do an FHA loan (usually more lenient with these with regards to credit score, debt to income ratio, etc in comparison to conventional loans). It has to be your primary residence though, and there's a little bit more paperwork and hoops to jump through.
Conventional loan allows you to put as little as 5% down. They are a little more strict as far as qualifying but the property doesn't have to be your primary residence.
The main difference between the two comes down to PMI.
So PMI is a type of insurance your lender makes you get if you don't put down 20%. The PMI insurance covers whatever that gap is between the amount you actually put down and what 20% of the purchase price would actually be. So say you're buying a house for $200k. At 20%, you'd be required to put down $40k. But say you only put down 5%, or $10k. The PMI would cover the $30k gap between what the 20% would be ($40k) and what you actually put down ($10k). The reason for this is, say the bank actually let you only put 5% down with no PMI so they let you borrow $190k. You never make a single payment and right before they foreclose on you, you take all the appliances and basically gut the house and disappear. Now they're stuck with a property that they're $190k in the hole on, that's been gutted and not taken care of, and it's going to be sent to auction and they DEFINITELY won't get all of their $190k back. So essentially they make you get insurance that says they're covered up to that 20%.
Now the reason that's important is because with FHA, you're basically stuck paying that PMI forever, EVEN ONCE YOU'RE UNDER THE 80% THRESHOLD. The only way to get rid of it is to refinance the property, but then you have to pay closing costs all over again. With a conventional loan, you have the (obvious) option of discontinuing the PMI insurance once you owe less than 80% of the purchase price without having to refinance. And even if you forget, it falls off automatically at 78%.
If you can afford to do conventional and you qualify, I certainly recommend doing so for the reasons stated above. But if you're only going to have the property for 3-5 years or something and then flip it, then maybe FHA makes more sense since you'll never get below that 80% threshold anyway. When you're ready, I suggest you consult a mortgage broker prior to starting your search and get pre-approved so you can house shop accordingly and you already know what the best option for you will be.
