Being a home buyer is overwhelming, but being a first-time military home buyer adds a whole new twist. Not only are you going through the emotional process of choosing the right home for your family and your finances, but you’re also thinking through the layers of other circumstances that may impact your purchase.
What if you buy and have to move again in two years? What if you pick the wrong neighborhood? How are you supposed to choose a neighborhood in a place you’ve never been to? How do you get a VA Loan? Is a VA Loan a good idea? There are so many questions and considerations to take into account when buying a home that it can stop you in your tracks.
Buying a home while in the military is complicated. But that doesn’t mean it’s a bad idea. In fact, it can be a great way to invest in your future. But it’s important to understand the process and the potential expenses involved with buying a home.
Step 1: Are You Ready to Buy?
Assessing your readiness to buy involves checking your financial situation against the budget you’ll need to buy the kind of home you want. It also means checking your PCS timeline to make sure you have enough time to get through the purchase process, or at least have appropriate temporary lodging lined up while you wait.
Step 2: Learn Who the Players Are
Your real estate agent and mortgage lender are your two most important guides through the transaction. A real estate agent doesn’t cost a buyer anything* to use, and you’ll definitely want someone who knows all the steps, has all the vendor resources, and represents your interests in the transaction.
Step 3: Get Preapproved for a Loan
The preapproval process sets your budget so you can go shopping. It doesn’t mean you have to spend all the money you’re approved for, and depending on how much cash you have saved, you probably shouldn’t. You’ll need cash to pay for unexpected maintenance and other expenses later on and for a few items during the transaction, like a home inspection and an appraisal.
A mortgage lender not only should be your ticket to low interest rates and fees, but also should offer a detailed, honest assessment of your ability to secure a loan from the start. The lender performs best when you are honest about your finances from the start. Any omissions can lead to slowdowns and roadblocks later on.
The lender should be able to educate you fully about the VA Loan program and how it compares to conventional loans. And the lender should be able to verify your eligibility for the program online, though you may be asked to provide supporting documents.
Step 4: Learn About the Location
Your real estate agent is your insider’s guide to the neighborhoods around your duty station. Communicate your wishes completely and keep talking about them. The more feedback you give, the better your agent can tailor the showings to your preferences.
Check out online resources for community centers, crime statistics, school scores, and shops and restaurants you like while you’re getting acclimated to the area. The more landmarks you learn about, the faster the community will feel like home.
Step 5: Choose the Right Type of House
For most active-duty buyers, the right type of house will be one that’s marketable when you need to move out. Whether you decide to rent it out or sell it when you leave, understand you’re buying the house with the end in mind because service members typically move faster than most properties appreciate in value.
Step 6: Tally Up the Other Expenses
Not only do you need to pay for the home, but you’ll also need to pay for property taxes, homeowners insurance, utility expenses, general maintenance, repairs, potential HOA fees, and perhaps lawn care and snow removal. Make sure you’re comfortable with that number before you commit!
The military lifestyle creates a lot of change for us and our families, but with good counsel and a plan that includes factoring in your eventual PCS, buying a home at your latest duty station often makes sense.
*in most markets and situations