December 6, 2013
Once you’ve finished your service and are leaving military housing, you are now faced with a new challenge: buying a new home. For many veterans, the home they buy after retiring from the military is the first home they’ve ever bought. If you are in that situation, you need to quickly educate yourself on all aspects of home buying, including seeking home loans, making down payments, and finding a new place to live that is both affordable and fulfills the needs of everyone in your family.
Here are a few tips to help you as you begin the home buying process…
1. Determine what you can afford
The number one determinant of success when buying a home is only buying a home you can afford. When people buy outside of their means, they risk crippling their finances to support their new home — and, in some cases, find themselves facing foreclosure when they can no longer make mortgage payments.
Take some time to sit down with your spouse and discuss your finances. Remember to consider not only your income now, but also your income in the future: Are you planning to get a new job? Is your spouse planning to retire? Do not forget about other financial obligations, such as your children’s college tuition, that will also draw from your available cash.
2. Look for VA loans
Nearly everyone takes out loans when buying a home, so it is in your best interest to find loans specifically designed for veterans. These loans often offer lower interest rates and better terms than traditional home loans. By looking for low VA rates, you could potentially save thousands of dollars on your loan, and potentially increase the amount of home you can afford.
3. Begin thinking about location
Once you have your budget in place and are looking for loans, it’s time to think about location. Yes, military families are known for their flexibility and willingness to move, but your family may also want to stay in one place for a change. If your spouse has a good job, or your children are doing well in their schools, it is to your advantage to stay in the same city as your current military base.
If you are planning to move, take a look at this Forbes list of best cities for military veterans. Topping the list? Pittsburgh, which combines a low cost of living with numerous educational and career opportunities.
No matter where you move, keep in mind that you’re probably going to be living in your new home for a decade or more. If you want to move closer to grandparents, or have always wanted to live near the ocean, now’s your time to make that choice.
4. Consider the true cost of every potential home
As you start looking at homes, make sure you take some time to factor the true cost of each of them. That beautiful home that’s just a little out of your price range is going to take extra dollars out of your paycheck every month, so make sure that it’s worth the cost. On the other hand, be very careful about the low-cost “fixer-upper” home. Home remodeling and fix-up costs sometimes hit $40,000 per room, not to mention the labor, sweat, and frustration involved.
Ideally, you and your family have spent the past few years planning for life after your military retirement. If this is not the case, remember that there are many resources available to help you through the home buying process. The US Department of Veterans’ Affairs, along with local and third-party resources, are all there to help you and your family start a new life after your service, and this includes buying your new home. Take their advice, learn as much as you can, and get excited about starting a new phase of life in your new home.