I have just a couple comments on the previous advice:
*Conventiobal vs FHA: Conventiobal requires 20% downpayment (some programs can require less with PMI) BUT the interest rate is typically higher for the life of the loan. You need to price out which option makes more sense financially. Give 20% of your reserves AND have a higher interest rate (for example, the prime market on FHA I think is like 3.8 right now and a "good" rate for conventional is like 5%). OR pay 3.5% down, have a much lower rate, and pay PMI. The nice thing about paying that 20% down is you have immediate equity in the house if something were to happen and you needed to sell it or borrow against it. And that's equity you didn't have to pay interest on. However, you should know that you usually have to have excellent credit to qualify and with your wife making the higher income, you will want to use her income and thus her credit so you likely have some work to do on her mortgage scores.
VA vs FHA: the poster who said not to go VA was absolutely wrong. VA is 100% financing, no PMI, no downpayment required. The credit requirements are really very low compared to other loans. The added advantage of VA is that if you don't immediately qualify for the lowest interest rate, you only have to make 6 on time payments and then you can do a streamlined refi, which means if you're only refi-Ing for a lower rate and NOT taking equity out, you don't even need a new appraisal. That's what we are planning to do. There are very very very few options out there that are better than this one. I've seen a few posters here who have somehow gotten a good deal with a credit union (usually one I've never heard of) that go conventional, 3-5% downpayment and somehow also don't have to pay PMI but I'm assuming those people have excellent credit in the 720+ range.
Are you a member with NFCU? They have been raved about for credit cards and low interest rates on auto loans. I know they have mortgage options too. In 6 months of payments for the house we are closing on next week, we will probably use them to refi as my credit profile will be vastly improved by then.
Either way you go, you can always use your VA benefit to purchase down the road when you're eligible but I don't know if you can use it to refi a current house you're living in to remove the PMI, but check into that as well so at the very least if you're stuck paying higher than market interest (conventional) or PMI (FHA) it won't have to be forever.