Should You Buy a Home While Still Serving in the Military?

Marcus Marion, CMA™ 2 months ago 0 11

At some point during their careers, a lot of military members wonder if it makes sense to buy a home while they are still serving in the military. After all, the military life is known for its frequent moves and relocation transfers.

Which begs the question: Does it make sense to buy a home while in the military?

If you’re in a stable real estate market and have sufficient income to manage a monthly mortgage payment, you could successfully buy a home even while you’re still in the military. Thousands of people do it every year. You just have to go into it with the right information.

Buying a House While Still Serving in the Military

This article pertains to buying a home in the United States, while still serving in the military. Buying property in a foreign country during an overseas tour is a different scenario entirely. That’s why most military members who serve overseas lean toward rental units or base housing.

With that clarification out of the way, let’s explore some of the most important considerations when buying a home in the military.

The Benefits of Using a VA Loan

The VA loan program gives military home buyers a big advantage that most civilians don’t have. It allows you to buy a home with no down payment whatsoever. This applies to people who are currently serving in the military, as well as veterans who were honorably discharged in the past.

When exploring your mortgage options, start by determining your eligibility for a VA loan. If you can use this program to buy a house while serving in the military, it will remove one of the biggest obstacles to homeownership—the down payment.

Let’s plug in some numbers to illustrate just how powerful this benefit is.

When this article was published, in early 2024, the median home price in the United States was around $343,000. And according to a survey conducted by Realtor.com, the average down payment among first-time home buyers in the U.S. was 6%.

If we combine these numbers, we end up with a down payment of around $20,000. So that could be considered a “typical” down payment for a first-time buyer in the U.S.

Do you have that kind of cash in the bank? Could you afford to make an average down payment on a typical home price, while serving in the military?

Maybe so. But for a lot of younger military members, who also happen to be first-time buyers, this kind of down payment might be out of reach. It might take them years to save that kind of money.

This is where the VA home loan program comes into play. It allows military members and veterans to finance up to 100% of the purchase price, eliminating the need for a down payment.

Selling the Home Before Your Next PCS Move

In addition to exploring your financing options, you’ll want to consider the resale value of the home you’re purchasing. The ideal scenario is to buy a home in a stable real estate market where home prices are (A) gradually rising and (B) expected to continue climbing.

Many people who buy homes while serving in the military have to move again in a few years, through a permanent change of station (PCS). In that case, you want to make a smart investment so that you can sell the home before your next relocation move.

No one can predict future real estate trends with complete accuracy. But you can take certain proactive steps to determine if a particular home has good resale potential. This is a critical step when buying a home in the military.

Here are some tips for assessing the resale value of a home:

  • Research local real estate market trends, including historical data on property values, sales trends, and forecasts for future growth or decline.
  • Assess the stability of the local job market and employment opportunities. A strong job market typically correlates with a healthy real estate market.
  • Consider the quality of the school districts in the area. Good schools can attract more buyers and help maintain property values.
  • Investigate crime rates and overall safety in the neighborhood. Lower crime rates often translate to higher property values.
  • Analyze recent sales data of similar properties in the neighborhood to understand pricing trends and comparable values.
  • Evaluate the condition of the property and any potential need for repairs or upgrades. Well-maintained homes with desirable features tend to have better resale value.
  • Seek guidance from a local real estate agent with knowledge of the market. Agents can provide valuable insights and help identify properties with strong resale potential.

Income Stability From a Guaranteed Paycheck

Military members are often well-qualified for mortgage financing due to the fact that they have a guaranteed paycheck and good job security. This in turn could help you qualify for a mortgage loan to buy a home while serving in the military, especially if it’s a VA loan.

When you apply for a mortgage loan, the lender will review all aspects of your financial situation. They will look at your current income, recurring debts, cash on hand and other assets, etc. They want to make sure you have the financial capacity to repay your loan.

Serving in the military can help you qualify for a mortgage loan. As mentioned above, military service offers a guaranteed income and stronger job security, when compared to most civilian jobs.

And the data backs this up. Statistically speaking, military members are strong borrowers with a relatively low risk of foreclosure. So you might have an easier time obtaining the funds needed for your home purchase while you are still serving in the military.

Additional Considerations for Military Home Buyers

In closing, here are some helpful tips for anyone buying a home while in the military:

  • Location: Consider proximity to base, commute time, and access to amenities.
  • Housing Allowance: Find out if your housing allowance or BAH covers housing costs in the area, or will at least make it more affordable for you.
  • Deployments: Consider how deployments might affect mortgage payments and property management.
  • VA Loan Eligibility: Explore options for VA loans and their benefits for military personnel.
  • Home Maintenance: Determine if the property might require extensive maintenance, especially during deployments.
  • Future Plans: Consider future career plans and potential relocation before committing to a home purchase.
  • Legal Assistance: Utilize military-provided legal assistance for reviewing contracts and understanding rights.
  • Support Network: Build a support network for assistance with home-related matters during deployments.

Many people before you have successfully purchased homes while serving in the military. And with proper research, forethought and planning, you could do the same!

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