If you are a member of the military, you may be wondering whether or not it is wise to buy a house and gain a mortgage while on active duty. Sometimes, active-duty military personnel don’t prioritize buying a home and beginning monthly payments until retirement.
While this is understandable, buying a home, obtaining loans, and gaining a mortgage payment while you’re still on active duty can actually be a great form of investment.
However, before you make a decision, it’s best to reflect on your circumstances to see which path is best for you. Getting a loan from a lender and obtaining a mortgage is a big commitment. There are times when renting a home for monthly payments is a better option than buying one.
Keep reading to find out about what you should know before you buy a home, get a loan, or obtain a mortgage while on active duty as a member of the US military.
Understand That Buying a Home Is a Long-Term Commitment
If you buy a home, you should be prepared to live in it for at least a decade or longer. If you’re still on duty, you might only have three or four-year assignments before you are moved to a different location. In this case, buying a home and obtaining loans may not be the best course of action to take.
You may also think about buying a home as an investment, which can also be a good idea. However, if you don’t have the time, money, and experience to rent your house when you're deployed or flip a house, it’s better not to venture into this.
Consider How Long You Will Be Stationed at This Base
Most service members are stationed at a base for around four years. If you have a family with kids, buying a home may be a way to make your kids feel at home. However, you can still accomplish this with a rental.
If you choose to buy a home in a location you’ll only be stationed for a few years, you should decide if you plan on moving back to that city after leaving the service. There are plenty of reasons to invest in a Virginia, for example. However, purchasing a home is a long-term commitment, so you should take into account your future plans.
Consider How Long It Will Be Until You Retire from the Military
Buying a home and obtaining loans while you are still on active duty may be reasonable if you’re already close to retirement. Perhaps you are planning to settle down in the location where you are currently based—or maybe you think this will be your last assignment.
If it won’t be too long until retirement, you need to consider whether you want to stay in the area where you’re currently stationed or plan to go elsewhere.
Of course, this will depend on your goals after retirement, like planning to start a business or a new career. Choosing to buy a home will be easier when you have decided on your post-retirement plan.
Obtaining a mortgage and a loan from a lender requires careful planning of your future.
Don’t Make Rash Decisions
A home and a mortgage loan is a big purchase—perhaps one of the biggest purchases you’ll ever make. While it may be enticing to find a home of your own without a real estate agent, try not to rush the decision-making process.
Before you make a final decision to pay for a property, you have to spend time doing your research of the local real estate market to ensure that you’re buying in the right location where there are opportunities for you and your family.
You also need to check the loan and mortgage appreciation rates in the real estate market where you plan to buy. Since real estate is a big investment to pay, you want to ensure that you’re buying an asset that will appreciate in value after a few years. Ensure that you are financially ready for this big purchase before actually buying a home.
Set a Solid Budget
If buying a home is indeed your best option, you have to create a budget for a monthly mortgage payment before starting to look at the available listings for sale.
Your budget should include your down payment, closing costs, monthly mortgage, taxes, repairs and improvement, and other moving expenses. Make sure to resist the urge of going beyond what you can afford.
In addition, you should also shop for available financing and compare interest rates. Lenders will typically require a good to excellent credit score so you can qualify for a VA home loan with favorable mortgage payments, terms and rates.
Make sure to keep your credit history in check and minimize your debt-to-income ratio so you will be ready to qualify for a loan when buying a home.
Find Out About the Available Tax Benefits
Owning a home comes with several tax benefits, such as mortgage interest. This means you can minimize your taxable income by the amount you pay in mortgage interest and taxes, saving you money over time.
If you are not sure how this works, it’s best to talk to a tax expert so you can maximize your tax benefits as a homeowner.
Know That Renting a Home Is Still a Great Option
If you remain uncertain whether you are ready to buy a home, you don’t need to pressure yourself to make an immediate decision. Renting is still a viable option.
You don’t want to make rash decisions just because you think that buying a property is the best thing to do. Remember, it is a long-term commitment that requires a lot of money and preparation.
There is nothing wrong with renting a house. Some landlords even prefer to rent to military tenants. You don’t have to own a house to call it home. After all, it’s wiser to put off the decision to buy until you're truly ready to commit to a home purchase.
We Can Help
You can also hire a rental property management company to help you find the best rental home in your preferred location. If you need help in finding the perfect home to rent in Virginia, contact RentEasy at 757-347-8952, and we will help you make this process smooth, fast, and simple.