Military Families: Should We Buy a Home?
Things for Military Families to Consider when Deciding Whether to Buy a Home
Buying and owning a home is often more complicated for military families than civilians. Between navigating mortgage options, pinning down the best neighborhood for your family, and predicting the next PCS, there are many factors to consider.
While running through the recommended steps for deciding whether or not to buy a home, this list will introduce key factors for military families to consider.
Working with a lender and getting an approval estimate and pre-approval letter is an excellent first step in home-buying. This gives you a price point to use when searching for homes and leveraging power when making an offer on a home.
The Pre-Approval process is also a time to really crunch your numbers. Evaluating your finances will help identify whether or not you are financially ready to buy a home. When budgeting for home buying, consider these factors.
>> Get pre-approved while rates are still at historic lows! You may be eligible for a zero down VA home loan? For a no-obligation, free consultation regarding your VA Loan eligibility, please go here.
Conventional mortgages can require a 20% down payment – that’s $20,000 on a $100,000 home! VA Mortgages do not require a down payment and may offer lower interest rates than conventional mortgages. There are, however, eligibility requirements.
RELATED: Is a VA Loan Right for You?
Earnest money. With any type of mortgage, it’s likely that you will need $1,000-5,000 to secure an offer you’ve made on a home.
Other expenses. Homeowner’s insurance, taxes, utilities, and home repairs are not included in the cost of a monthly mortgage. Do your research to ensure your monthly budget accurately captures all possible expenses.
Budgeting is a critical step of planning ahead in the home buying journey. Considering what will happen to a home in a couple years is an additional critical step for military families.
Resale. Military families are likely to PCS in a few short years. Before you commit to buying a home, think about what will happen to it when you move. Will you rent the property to another family? Will you resell it? Will you be able to resell it without a headache? Will you be able to afford the repairs the next buyer asks for in the sale process?
Location. Location tends to be a huge factor in the resale of a home. Even families without school-age children should consider the school rankings in the area. Homes in higher ranking school districts sell faster and at a 49% higher cost than other homes.
Search Homes for Sale
The fun part is scouting what’s for sale! After getting a good feel for what’s available and what exactly they want, most families work with a realtor. Working with a realtor as a home buyer is less expensive than when you sell a home. Understand the realtor’s fees and factor those into the budget too.
Location. Also consider location for your own needs. What will your commute look like? What are the crime rates in the area?
Picking the right location to meet your needs can be challenging for military families. Fortunately, there are some great resources to help choose a good location. Millie offers a neighborhood comparison toolkit to help find the right neighborhood for you.
Elbow grease. Buying a fixer-upper, putting your own sweat and tears into fixing it up, and making a profit when the home is resold is possible. Before committing to a fixer-upper, consider how much time you are willing to spend, whether or not DIY projects will pass a home inspection upon resale, and the cost of multiple trips to hardware stores.
Home value. Getting upside-down in a mortgage – owing more than the home is worth – can have an extremely negative financial impact. Is the home you are buying appropriately priced?
Deciding whether or not you should buy a home rests heavily on budget. Before searching for homes, make sure your financial ducks are in a row. Create a budget and stick to it!
>> Rates are still at historic lows! You may be eligible for a zero down VA home loan? For a no-obligation, free consultation regarding your VA Loan eligibility, please go here.
- VA Loan Eligibility Expanded for National Guard
- Buying a Home Remotely
- What Do You Need to Know About VA Loans?
- What is VA Streamline Refinancing and How Can It Benefit You?