7 Steps to Home Ownership for Veterans and Military Personnel

Written by: Jackie Waters

Active military personnel move often, and buying new homes in areas of reassignment tends to be part of the job. Once you’ve fulfilled your military service obligation, purchasing a home to settle in may be one of your top goals. Here’s a guide to help you through the process.

McEnearney Associates can help you find that perfect home. Call our office today at 877-624-9322!

Reduce Debt and Improve Your Credit Score

Focus on high-interest debts first; these include credit card debt and payday loans. Any loan with an interest rate greater than 8% may stand in the way of a good mortgage loan. Don’t use credit, steadily reduce your debt load, and keep an eye on your credit score.

Look for Programs That Help You

There are a number of programs designed to help veterans find the home they’re looking for. So, when you begin the house-hunting process, look into programs like U.S. Military on the Move, which joins forces real estate companies (including McEnearney Associates) to give credits or rebates to veterans looking to buy a home. You can learn more about this program by clicking here.

Save Aggressively

As you work on eliminating debt, put the same energy into saving. Try one of these aggressive savings strategies:

CD laddering allows you to take advantage of the higher annual percentage yields of long-term CDs without committing money for several years at a time.
Gradually increase the percentage of your income that you put toward savings. Even a 1% increase can help you raise your savings. Be intentional about reducing expenses, especially any “wasteful” or spontaneous spending.
Reframe your thinking about consumerism and spending money. You may be handing over valuable funds without thinking much about it.

Get Pre-Approved

Secure loan pre-approval. This means your finances and other qualifications have been reviewed. The process also helps you understand how much a home you can afford and what interest rate you should expect.

Choose Your Loan Type

A VA loan has several benefits, including the lack of requirement for a down payment or a monthly mortgage insurance amount. Additionally, the credit requirements for the VA loan are more flexible than those for other loans. There are other options as well, such as Federal Housing Administration loans, down payment assistance programs, and the Specially Adapted Housing grant.

Veterans can also look into VA 30-year fixed mortgage loans, which require no down payment and low interest rates. Though the rates are subject to change, today’s rate (which is based on the purchase of a single-family primary residence in IL) is 3.106% with no discount points, a middle credit score of 680 and the assumption that the loan will have an escrow account, according to Rate.com.

No matter which type of loan you opt for, it’s important to carefully consider certain vital details. Learn mortgage language to negotiate a good contract:

Mortgage interest rates are determined by many factors, including county and state, the size of the down payment, the duration of the loan, and its type.
The annual percentage rate on your loan is how much you will pay for the loan. The APR is the cost of borrowing money.
The term of the mortgage is how long you’ll take to repay the loan. Remember that the longer you take to pay off the debt, the more you will pay in interest.
Projected payments are the estimated amount you’ll pay each month with your mortgage payment and mortgage insurance combined.

Find Your Home

The natural fifth step is finding your dream home, within your realistic home budget. Create a list of the things your new home must have, such as proximity to great schools, a positive location, size of the home, or amenities such as central air conditioning. Make a list of other things you don’t mind compromising on, such as multiple garages. A real estate agent can offer valuable resources and information, such as the best time of year to buy a home and how to negotiate costs.

Close and Move In

With the help of the realtor, your final step is closing on the home. This includes settling on a good offer, completing paperwork, and paying relevant fees. After your hard work, this moment should be very satisfying.

Approach the purchase of a new home with the same patience and attention you devoted to other missions during your military career. Stay on course, stick to your priorities, and keep your eye on the end goal.

Author

Jackie Waters is a mother of four boys, and lives on a farm in Oregon. She is passionate about providing a healthy and happy home for her family, and aims to provide advice for others on how to do the same with her site Hyper-Tidy.com.