by Sharon Wagner
Buying a home after serving your country is a dream that many veterans have. Homeownership rates for veterans are strong, 78.2%, according to the Urban Institute. This is a higher rate than the general population and much higher than active duty service members. Here is a guide to help veterans achieve their goal of being a homeowner.
Improve Your Financial Habits
Before hiring a real estate agent and looking at homes, you have to make sure your finances are in order. Look at your credit score and report to see if there are any negative marks on your financial history. If you have problems with debt, figure out a way to pay it off or reduce it. Avoid opening up new lines of credit right before you plan to buy a home. Decide how much buying power you have. Calculate your income and run some numbers to figure out your debt-to-income ratio, which is what lenders will use to see how much you can afford for a pre-approval.
Shop for a Mortgage
Next, get help from a mortgage broker or do your own research to learn more about home loans. Veterans may qualify for a loan from the Veteran’s Association. A VA-backed loan may offer benefits like no down payment, no PMI, and low interest rates, saving you thousands of dollars on a home purchase. Active duty members may get additional benefits, such as a housing allowance.
Time Your Home Purchase
Purchasing a home also requires good timing. Market conditions may be fluctuating between a sellers and buyers market, so do your homework to help you avoid overpaying. Additionally, the time of year that you buy a home may also influence your budget. Some buyers have gotten the best deals when buying homes in the fall or the winter. If you’re waiting for the right time, stay focused on following key financial steps for veterans so your finances improve.
Pick the Right Neighborhood and Property
Then, make a list of must-haves for your new home and start searching the local inventory with a real estate agent’s help. Look for homes that are within your budget, energy-efficient, and have a good foundation. If you want a fixer-upper, aim for one that needs cosmetic improvements. Scope out neighborhoods that are in your city and look for a good match for your lifestyle. Drive through target neighborhoods to get an idea of the vibe. Additionally, get recommendations from people local to the area.
Seal the Deal
Once you’ve found the perfect property, make an offer with your real estate agent’s help based on how long the home has been for sale, the condition of the property, and the market. If your offer is accepted, you’ll have to get an inspection and an appraisal before the mortgage is approved. The deal will finalize at settlement. Some buyers can negotiate to pay lower closing costs, such as transfer fees and loan administrative costs, with motivated sellers.
Buy a Home Warranty
Finally, don’t forget to buy a home warranty. Your homeowners insurance only pays for structural damages, theft, or injuries on your property. For coverage of appliances, HVAC, plumbing, and electrical, you can use a warranty that renews each year. Take the time to do your research and read consumer reviews to find the company with the best home warranty offerings.
If you’re a veteran and ready to buy a home, follow these steps to make the process easier. You can find a home within your budget and invest in a quality home warranty to ensure you don’t have to cover costly home repairs for appliances and major systems.