Owning property or a home can be an amazing investment. At the same time, it can be a source of great stress depending on where you are in your life. Being a homeowner means you won’t have to pay rent anymore, and you can feel safer regarding your future. Unfortunately, homeowners will also have financial obligations that could be overwhelming.
Before becoming a homeowner, you should talk to your military lender about your options. Before deciding, you should also carefully weigh the pros and cons of owning vs. renting. This isn’t the type of decision to be made in a rush.
Tips for Buying a Home on Active Duty
To avoid being over your head, you must be very careful about your budget. As a general rule, the total cost of the house you’re interested in buying should not exceed 2.5x your annual income. Regarding your mortgage, you shouldn’t borrow more than 50 to 80 percent of your home’s value. In fact, 80% might be stretching it. Your monthly payments should be less than 35 percent of your income.
Don’t forget about possible VA home loans. These loans are available to veterans, active members that have over 90 days of active duty under their belts, and spouses of deceased military members. Talk to your lender about whether you can apply for a VA home loan. Getting a VA home loan can make your life easier when investing in a new home.
Before committing to buying a home, consider whether it would be better to rent. Each option has its pros and cons, and no rule applies to everyone. It will all come down to personal variation and preferences.
When you rent, you won’t have to pay for maintenance. As a homeowner, however, maintenance will be your responsibility and can prove costly. Renting also means no up-front costs or down payments and possibly lower monthly fees. A major advantage to renting while in the military is that you never know when you’ll need to move. PCS or permanent change of station can lead to uprooting your life and moving elsewhere for months. Renting is more flexible and will do the packing and moving easier.
Being a homeowner has its perks too. First of all, you can personalize and modify your home however you like. Secondly, it’s an investment and security. Having your own home can give your family a much-needed sense of security. It can also be a source of income if you decide to sell your home later. Tax advantages are also possible for homeowners. For those in the military, PCS doesn’t have to be distressing. While you’re away from the home you own, you can rent it out. However, this is easier said than done, as the process can be challenging and time-consuming. Additionally, some people don’t feel comfortable renting out their properties to strangers for months.