If you’re like me, you had no idea military families bought homes given the frequency they move. I was surprised to learn that military families bought homes all the time! Some of us think about home buying as a one-time thing, but if a house can be bought, it can be sold, and in military communities, there is a lot of activity on both sides.
I sat down with Fayetteville/Fort Bragg area realtor and Army wife, Cassondra McAnally, to talk about home-buying for military families. I came away realizing home-buying does not have to be so long term, not just for when you don’t plan on moving again.
Even though buying or selling a home can be a lot of work, it can be worth it to put your Basic Allowance for Housing toward your own investment instead of someone else’s.
We discussed the processes of buying and selling and details you need to know about loans as well as tips for shopping. You can listen to the podcast here. Those tips are below!
1. Homebuying is a good option for military families in place for at least 2-3 years.
Most contracts are around three years. That’s enough time to see a benefit from choosing to own your home over renting. If you don’t know how long you’ll be at a duty station, don’t buy a house. That is, don’t buy unless you definitely want to rent the place once you leave.
“Never purchase a home because somebody tells you it’s the right way to handle your money. You still have to feel comfortable with the purchase.”
2. Don’t let poor credit stop you from pursuing homeownership.
You may not be able to secure the loan you want with bad credit, but there are programs to improve your credit so that you can. This is the same for self-employed individuals without paystubs. There are programs to help you prove your income.
3. Don’t open a new line of credit within six months of seeking a home loan.
New lines of credit make you seem less reliable to banks. The new item you’ve purchased may risk your ability to cover the home loan. Don’t buy anything new to make sure you get the loan you deserve.
4. Always speak to a local agent when you’re looking for a house.
Real estate is local. You won’t be able to make decisions about a new location-based on information and trends of where you are. Real estate values,
5. Talk to a realtor as soon as you get orders
When you know you’re leaving, talk to an agent to help you plan out the process of selling your house. You may need time to make repairs or improvements before you put it on the market. And the realtor can advise you when to list it so that the buyer doesn’t have to wait too long to move in.
6. Pre-Approved and pre-qualified are not the same!
Being pre-qualified does not guarantee you’ll be awarded the money! Pre-qualification just means that theoretically, you should be able to secure a certain amount, whereas pre-approval gives you an amount based on your personal details and credit history. Don’t be fooled into thinking you know what your budget is based on a pre-qualification.
7. Get pre-approved before you start shopping.
Much like falling in love with a wedding dress you can’t afford, be careful of the homes you’re looking at. It’s easy to start looking at the kind of home you want or the neighborhood and become attached before officially starting the buying process. You need to go through the pre-approval process to find out exactly what your budget is before you start shopping.
8. Be aware of possible additional costs.
There are more variables in home-buying than the cost of the home and closing fees that people often fail to anticipate in their budget. You may have to pay for multiple inspections, which are priced based on square footage. And those inspections may result in repairs. You may also have to pay earnest money to the other party, which is saying you intend to buy the house. Or due diligence, which you pay to have the seller remove the listing while you get your loan together.
These costs can leave you in a bind if you didn’t factor them into your budget for your house. You may find yourself with a brand new house, but unable to furnish it or make cosmetic adjustments because the additional expenses took you over your budget.
9. VA loans do not require a down payment. They do require appraisals.
The VA loan is a tremendous benefit of serving in the military. The VA provides the loan and does not require a down payment. To make sure they are ensuring an appropriate amount, they conduct their own appraisals.
If you’re concerned about the extra interest incurred from not making a down payment, Cassondra’s opinion is that most people don’t stay in their homes long enough to realize the interest. She also feels that you should not put down a down-payment unless you are moving into your forever home. Otherwise, that capital may be better utilized in other ways.
10. Don’t linger!
Instead of hanging out and getting a feel for the property, first, look at it objectively. Go home and make a list of pros and cons and note what stood out to you good or bad. This way your judgment won’t be clouded by emotions or how the house made you feel. Those things are important, but it’s easy to become attached to something that doesn’t actually serve your needs and waste time considering that property.
11. Always give homes a chance.
Take a look at the homes your realtor recommends. A home may not look the best in pictures but is a completely different experience in person.
You should also try to go by the property at different times of day to see what the environment is like. You may find the traffic is terrible in the morning, or that you would be dealing with partying college kids on the weekends.
12. Don’t get attached. Losses can happen.
It is not uncommon to start the buying process only for an inspection to return undesirable information, a loan to fall through, or the owners are unwilling to make repairs or just change their minds. That can be heartbreaking for a family. Prepare for this possibility. Don’t allow yourself to become attached to the home before it’s yours.
Advice for a New Military Spouse
“Take it slow, day by day. It’s gonna come. You’re gonna learn acronyms, you’re gonna learn the way things work, you’re gonna start to understand the flow. It’s gonna work out; you don’t have to rush it. Wait and take it all in day by day.”
You can find Cassondra on Facebook or give her a call at 910-916-1442. She’s happy to help anyone regardless of location!