By Alena KairysMay 31, 2020
There are many moving parts when it comes to buying or selling a home, and active duty personnel have additional factors to consider. You might believe you can’t become a homeowner until you’ve left the military, but you can begin to build wealth while serving. Likewise, you may think your job will make selling your home a huge hassle. Neither of these need to be the case for you and your family. Read these tips for buying and selling a home in the military.
Buying in the Military
If you’ve determined buying will benefit you more than renting and your orders are in place, start researching your home financing options. In preparation for applying for loans, you should be actively trying to improve your credit score. Though there are several government-backed loans with flexible credit requirements, you should put yourself in the best financial position possible during the loan process.
One of the first questions you’ll be asking yourself is how you’ll pay for your future home. The VA loan is an excellent way for veterans and active duty military members to become homeowners, since there’s no down payment and credit requirements are more lenient. If you chose to apply for a VA loan, make sure you have enough saved for closing costs. Though this loan program is especially for service members, it’s wise to look into other programs to find the one that’s best for your needs.
Now that you have a plan for financing the home purchase, the next logical question is how you will pay the mortgage. As a military member, you can apply for a Basic Allowance for Housing (BAH). BAH is available for service members who don’t live in government housing, and it can be put towards your mortgage payments. The amount of BAH you’re eligible to receive is dependent on local housing costs, your rank, and whether you have dependents.
At this point, it will be important to find a reliable real estate agent and lender to help you with your home purchase. Your lender should have experience working with military borrowers, so they can understand your needs and ensure all loan requirements are met. You’ll need to show your lender your Certificate of Eligibility (COE) when applying for a VA loan and Leave and Earnings Statement (LES) if you intend to use your BAH to pay your mortgage. It’s always a good idea to borrow less than what you’re qualified for to leave breathing room in your finances.
Selling in the Military
When selling your home, get started on the process as soon as you get your orders to move. Since your move will be on a deadline, everything will likely be at a faster pace than a civilian relocation. A good first step is to find a trustworthy real estate agent to help you with the sale. If the agent has strong experience working with military families, even better. During this time, do the prep work needed to make your home sellable including deep cleaning, decluttering, yard work, and repairs. You can even start packing some of your things for when the house sells. Once preliminary work is done, stage your home to make it appealing to buyers. After the home has sold, you can start increasing your moving efforts.
As an active duty service member, the military provides certain moving services to you to facilitate everything. Depending on the nature of your move, you may be able to transport your belongings using a Personally Procured Move (PPM) or Household Goods Move (HHG). Keep in mind your rank, length of assignment, and new station location will affect how much of your belongings you can take and whether your family can come or not. Always refer to your orders for specific information and use your local personal property office as a resource for your move. If you need to relocate but don’t want to sell your home, consider renting your property while you’re away. If your home’s location is in a lucrative area for rentals, you could rent it out to pay the mortgage. While this option may not be feasible for everyone, it could pay off for some people.
Your military career and lifestyle don’t have to prevent you from becoming a homeowner and building wealth. You can sell your home and relocate without feeling lost—there are many resources to make things easier for you. When you know what to expect when homebuying or selling while in the military, you can navigate the process with fewer hiccups.
If you’re interested in how to become a homeowner while you complete your service, contact one of our Licensed Mortgage Loan Originators. If you are ready to begin the process, click here to get started!
These blogs are for informational purposes only. Make sure you understand the features associated with the loan program you choose, and that it meets your unique financial needs. Subject to Debt-to-Income and Underwriting requirements. This is not a credit decision or a commitment to lend. Eligibility is subject to completion of an application and verification of home ownership, occupancy, title, income, employment, credit, home value, collateral, and underwriting requirements. Not all programs are available in all areas. Offers may vary and are subject to change at any time without notice. Should you have any questions about the information provided, please contact us.