5 Tips for Military Service Members Purchasing a New Home

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Purchasing a home is complex, and even more so for militaryservice members, where the uniqueness of a military career extends to the homebuying process. As you navigate this experience, here are a few tips to keep inmind.

VA Loans Are Trickier Than You Think

A consistent piece of advice you’ll hear as you begin this process is to familiarize yourself with the Veteran Affairs Home Loans. These loans, available to military service members to help with the expenses of homebuying, are a huge benefit you should definitely consider.

Why are they so helpful? Part of the loan is guaranteed by theU.S. Department of Veteran Affairs, meaning lenders are able to provide morefavorable loans. Purchase Loans, Streamline Refinance Loans, Adapted HousingGrants – these and more are available to military members based on variouseligibility requirements. Length of service and duty status are some of the factorsconsidered.

VA Loans Aren’t the Only Option

Just because VA loans are available to you doesn’t mean youshouldn’t do your research. Service length, ability to make a down payment, howlong you plan to live in the home – all of these can play a factor into yourloan decision. While VA loans are only available to service members, thatdoesn’t mean they’re the only loan available to you. By putting in a bit of legwork,you’re setting you and your family up for success.

VA Loans Don’t Necessarily Cover Everything

One thing you’ll likely learn about in your research is that VA loans can offer 100 percent financing, meaning you’re not required to pay a down payment. Additionally, you often aren’t required to purchase private mortgage insurance, or PMI, which is required for down payments of less than 10 percent.

That being said, this doesn’t mean there aren’t any associated fees. Closing costs are not factored into the loan, and on average are between 2 and 5 percent of the overall purchase price of the home. There is also the VA Funding Fee, a sort of “pay it forward” system to ensure VA home loans will continue to be an option for future service members. This is a set fee, somewhere between 1.5 and 3.3 percent of the loan, paid upfront or rolled into the overall loan.

Temper Your Expectations

Something all homebuyers struggle with regardless of profession isunderstanding that purchasing a home is a multi-year commitment. While familiesdon’t necessarily need to stay in one home for their entire lives, purchasing ahome is typically not a responsibility you can shirk in a few months. Plan forthe long term, and be realistic about your situation.

Are you still active duty, and have a high chance of beingrelocated? This might not be the best time. Are you coming to the end of yourcareer, and plan to retire in the same area you’ve been stationed for the lastfew years? Sounds like you’re in the best possible position to know the localmarket and make an informed decision. No matter your situation, being realisticabout the time and commitment that comes with being a homeowner will makethings easier down the line.

Ask Questions

Finally, don’t hesitate to ask questions throughout the process!Reach out to people who are familiar with how the VA home loans work, includingother service members who have gone through the process. Encourage otherimmediate family members to be involved in the process, as their perspectiveswill help you see any issues with your plans. The home-buying process requiresa lot of attention and energy, but with the help of others and by familiarizingyourself with the unique benefits available for service members, your dreamhome is within reach.

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