Buying A Home While in the Military: What You Need to Know
Buying a home is always a significant milestone, but for military families, it can come with unique challenges and opportunities.
At Ernest Homes, we are committed to building homes to support those who serve our nation. We’ve worked with military buyers and are honored to help them build the perfect home for their family.
Purchasing a home while serving in the military involves unique considerations, especially given the possibility of relocations and changes in deployment. We pride ourselves on making the homebuying process as easy as possible.
Military families and active-duty service members can leverage specific benefits, such as the Basic Allowance for Housing (BAH) and VA loans, to make homeownership more accessible. Here's a guide to navigating this process while maximizing the advantages available.
Understanding the Basic Allowance for Housing (BAH)
The Basic Allowance for Housing (BAH) is a critical component when considering homeownership during active duty. BAH is a monthly housing stipend provided to service members to cover the cost of housing when government quarters are not available.
The amount varies depending on the service member’s rank, duty station, and whether they have dependents. Since BAH is considered nontaxable income, it can significantly offset mortgage payments, making it easier to afford a home.
Utilizing BAH wisely can enable service members to build equity rather than paying rent. For example, if a military member is stationed in an area where the BAH is higher than average rental costs, it might be a good opportunity to invest in a property and use the difference to cover homeownership costs.
VA Loans: A Powerful Benefit for Military Buyers
Another valuable benefit for military personnel is access to VA loans. These loans are backed by the U.S. Department of Veterans Affairs and offer several significant advantages, including:
- No Down Payment Requirement: Unlike conventional loans, VA loans do not require a down payment, which can reduce upfront costs.
- No Private Mortgage Insurance (PMI): Military buyers using a VA loan can avoid paying PMI, which is usually required for loans with less than 20% down.
- Competitive Interest Rates: VA loans often have lower interest rates compared to other loan options, making monthly payments more affordable.
While these benefits make VA loans a great option, it’s essential to be mindful of eligibility requirements and funding fees, which vary depending on the type of service and the number of times a borrower has used a VA loan.
The Pros and Cons of Buying a Home While in the Military
When considering purchasing a home while serving, there are, of course, pros and cons. Here’s just a few to contemplate.
Building Equity
The main advantage is the opportunity to build equity. Many military members find that owning a home instead of renting allows them to accumulate wealth over time. Additionally, some can rent out their home during deployments, generating extra income.
However, sudden Permanent Change of Station (PCS) orders can make it difficult to manage or sell a property quickly. Military families might also experience fluctuations in housing markets when stationed in different locations, which could impact the home’s resale value.
Timing
The timing of a home purchase is crucial for active-duty service members. Deciding whether to buy or rent depends largely on how long they expect to remain in one location.
If a service member anticipates staying at their current post for three years or longer, buying might make more financial sense. But for shorter stays, renting may be the better option due to the potential challenges of selling a home quickly during a PCS.
Proximity to Military Bases
Choosing the right location is crucial, particularly for military families who need easy access to base facilities and a strong, supportive community.
At Ernest Homes, our communities are strategically located near military bases in the Savannah area, such as Fort Stewart and Hunter Army Air Field. These locations are not only convenient but also come with the added benefit of a welcoming community that understands and supports the military lifestyle.
Additional Considerations
When buying a home, military members should also consider the long-term costs of homeownership, such as property maintenance and potential market fluctuations. Financial planning tools and expert guidance can help in understanding the affordability based on military pay charts and the specific housing market in a duty station area.
For those interested in pursuing homeownership while in the military, understanding the benefits like BAH and VA loans, and considering the unique challenges of military life, can help ensure that you make the right decision for your family and financial future.
If you're a member of the military and are considering buying a home during or after your military service, exploring the options available through Ernest homes is an excellent next step.
We invite you to visit our communities and connect with us to discuss how we can help you transition into homeownership.
