Thinking About Buying a Home?
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Thinking About Buying a Home?

November 12th, 2018 | 5 min. read

For active duty military families, the unique demands of being in the service make buying a home challenging. Deployments and regular PCSs often make renting seem like the more attractive option. However, the advantages of home ownership – such as possible tax benefits, potential for monthly rental income, having a forever home – can outweigh its shortcomings. If you’ve decided that home ownership is right for your family, these four tips can guide you toward a satisfying home buying experience. 

1. Be Prepared to Boost Your Credit Score 

Credit scores of 700 or better receive the most competitive home loan interest rates. Therefore, if your credit score is high, you can reasonably expect to get a low interest rate. If your credit score is lower than the mid-600s, you will want to consider improving your credit score before applying for a home loan. A few tried-and-true tactics include paying down your credit card balances, keeping those balances low, and, if you have several credit cards, eliminating the balances on most – but not all – of them.

2. Embrace Your Budget

Before you start house hunting, you’ll need to determine your budget. This depends on several factors, including your income, monthly debt, down payment amount, and your location. Once you’ve determined a reasonable home-buying budget, embrace it and only seriously consider homes that fall within or under that number. Don’t try to justify going over budget. Yes, the kids will get bigger, and more room would be nice. But so would an annual family vacation or a sizable college fund. 

3. Take Advantage of VA Mortgage Loans

Created in 1944, the VA Home Loan program has provided military families with the opportunity to secure financing via approved lenders. VA mortgage loans offer a several advantages over conventional home loans:

  • 0% down for qualified borrowers
  • No private mortgage insurance (PMI) is required
  • Interest rates are typically lower
  • Easier to qualify

4. Don't Forget About Closing Costs

Closing costs typically range from 3% to 5% of the sales price of your new home and fall into three general categories: lender costs (like application and underwriting fees); third party costs (like title, appraisal, and home inspection); and prepaid costs (like homeowners insurance, real estate taxes, and prepaid interest). 

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