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Tips for Purchasing a Home After Serving in the Military

Military to Civilian Transition

Leaving the service can feel a lot like starting a new life. Fortunately, the military has prepared you well for what lies ahead. With your sharply honed skills, you're ready to enter the world of private employment. This will also require that you find somewhere to live, which is something you likely haven't done in the last several years of being moved from base to base by the government. This is a good time to determine whether or not you want to rent a home or start building equity in a home you own. Both have their advantages and disadvantages, depending on your circumstances, but if you're sure you're going to be remaining in the same area for a while, buying a home is probably your best option. As you move ahead with settling down, here are some tips to help you make the best decisions when buying a home.

1. Look for VA Programs

There are many government programs available for first-time home buyers and veterans. Many of them require little down, but what you are required to put down will depend heavily on your credit. If you don't get a rate you like, just remember you can always refinance later on. The stronger your credit becomes, the better your options for mortgage refinance rates will be later on. Regardless of what rate you pay on your new home, you'll still be building equity instead of handing over hundreds or thousands of dollars you'll never see again to a landlord.

2. Don't Rush to Buy Your Dream Home

Unless you landed a job at the top of the career ladder upon discharge, don't be in a rush to purchase your dream home. That's the beauty in building equity. The cash you're putting into your first home is setting you up for a really nice down payment on your next home. Look for a home in which the mortgage won't be more than 25 to 28 percent of your gross monthly salary. While you may have to settle on something a little less inspired than you would have wanted, you'll have time to make it someone else's dream when you're ready to sell it. Investing in upgrades will pay off for you later.

3. Put Extra Cash Into Your Home

A benefit of having served is you're probably eligible for a 0 to low down-payment loan. However, if you aren't planning on being in the home forever, you should try to put as much cash down as is comfortably possible. Putting cash into your home is like putting it into a savings account. As the value of your home increases with inflation, so will the funds you put into it. The more you put into the down payment and monthly payments, the bigger your nest egg will be when you're ready to sell. You'll be surprised at your surplus in cash in just five or more years. You'll be able to purchase extras like new furniture, or upgrades to your next home.

4. Choose a Knowledgeable Realtor

As you're in the process of finding that perfect first home, work with a realtor who is knowledgeable in the VA loan process. The VA has requirements that a home must meet, and a realtor who has worked with military buyers before will already have a solid understanding of those requirements which can help you in your decision-making process. You probably know someone who was discharged prior to you who has already been through the process and can make a recommendation.

Purchasing a home is a great step into the world of civilian living. Finally, you have the freedom to choose a home that reflects who you have become as a person and you've earned the reputation of a person who can commit to the responsibility of home ownership. Congratulations on all you've achieved, and for all you have done for your country.

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