If you qualify the VA loan is usually much better than any other loan product. However, occasionally there are circumstances where an FHA makes more sense.

Let’s compare the two:

VA                                                                          FHA

$0 Down Payment                                            3.25% Down Payment

No Mortgage Insurance                                 .5% Mortgage insurance

* VA funding fee 2.15%                                   None

Low credit score approval                             Low credit score approval is possible

Lower interest rates                                        -

*the funding fee can be paid by the seller, third party, or finance with the loan. If you have service connected disabilities, the funding fee may be waived.

Va rates are usually ¼ - ½ better.

An FHA loan may be a better option in one of these circumstances:

- Your VA entitlement is used for an existing home you plan to keep.

- You’re a subsequent user of the VA so your fee is 3.3% of the loan. If cash is available apply the 3% towards the FHA down payment and closing costs.

Home values are low, interest rates are low, these are two of the three most important facts to consider buying a home. Its #3 that is often over looked, How Long will you remain in the home? If you are retiring or already retired, BUY BUY BUY! However if your expecting reassignment in a couple of years, use extreme caution! It could take a few years before the housing market turns back around. As a military family you don;t need a home that you can’t sell because you owe more than its worth.

Renting sounds good, but the fact is, there are so many homes available it will be hard ot find a renter, double hard to find a renter that wont destroy your home.

But if you plan to remain in the area for a while, buying a home now could reward you nicely in 3-5 years.