Buying a house is a serious commitment of not only your time and energy but also your money. For each person considering buying a home, there are different pros and cons. When you’re in the military, there is an extra degree of difficulty: you don’t always have a lot of time to make that choice. Oftentimes, service members decide to buy a house in a rush and forget to consider some important factors that should go into such a large purchase.
Here are five things to think over before you commit to buy a house at your next duty station.
1. Time on Station
Consider how long you could potentially be at your duty station. Is it going to be less than two years? Buying a home is a long-term commitment, and you’ll want to be able to keep the house for at least as long as it will take you to recoup your investment before you try to sell it again. If you know you’ll be at your duty station for only a year, this may not be the time to buy a house unless you know you’ll be back.
2. PCS Orders
It’s probably just a matter of time before you get orders again. Before you buy a home, you should have a plan for what happens to the house when you receive new orders. Will you sell it or rent it out? Know what your goals are for buying and selling the house before you make the commitment to purchase one.
Some people like to live close to base so they can go home after physical training or to avoid traffic. Others want to live far away from base to get away from work. Visit the house you’re interested in purchasing when your family and neighbors would be at home and at the times you’ll be commuting to work. During those times, you’ll have a more realistic picture of what day-to-day living will be like if you get the house. Don’t forget your family’s commutes as well. Civilians may not be able to find a job in the local area and therefore may have a long commute, and if there’s not a school in the area nearby, your children’s commute will be affected as well. Choosing a location that works for your whole family is an important part of your home-buying decision.
4. VA Loans
There are two things you’ll want to take into consideration when it comes to your VA loan. First, each time you use your VA home loan benefit, the funding fee goes up. The fee is in place to help compensate taxpayers for the benefit you receive to avoid down payments and mortgage insurance. Many service members and veterans are not aware that the funding fee increases with use and are surprised by higher mortgage payments when they buy again. Second, even if you decide against using your VA loan benefit, remember that most potential buyers in the area will be military affiliated and using a VA loan themselves. Because of that, you’ll want to make sure your house meets the VA’s minimum property requirements. If not, you’ll end up spending more in repairs when it comes time to sell.
Deployments are a reality of military life. What will you do with your house during deployments? Will your partner move back home for the time? Will roommates be in charge of your house while you’re gone? How long will your deployments be? And most importantly, do you want to be on the hook for a mortgage payment and maintain the home during a deployment? Think about these factors before you buy a house.
Being in the military doesn’t have to mean the end of your home-buying dreams. Visit our Mortgage Learning Center for more information on the ins and outs of purchasing your first home.