No face punches! This is a theoretical question only ;)
There's a thread in the Welcome forum that's talking about paying down a mortgage vs. investing and a question occurred to me, but I think it will push things too far off topic, so I'm gonna ask it here xD
VA home loans are available to veterans with 0% down payments, with no PMI. Normally there is a funding fee if you put less than 5% down, but disabled veterans are exempt from the funding fee. As I say frequently (too frequently? hmm) on this board, DH is a 100% disabled veteran. For this theoretical exercise, assume we could get a market rate on the full loan vs. an 80% loan (which I think is possible/allowed).
Is there any downside, in this semi-unique situation, to buying with the 0% loan and investing what would be a down payment vs. putting down the traditional 20%?
The only thing I can see is that the monthly payment will be higher, causing potential cash flow issues (but obviously that's a fairly easy problem to work around).