Photo Credit: Sarah Reid
You’ve planned and put away your money, and now it’s time to take the big leap from military to civilian life. You may also want to take another big leap into home ownership. Buying a home during your military-to-civilian transition can be filled with excitement and stress. But with some preparation and knowledge, you can be successful purchasing a home during your transition.
Start Early – Choose a Realtor
Buying a home is a process, and like most processes, it can take some time. I highly suggest taking leave to the location where you are planning to move before arming yourself with a pre-qualification from your preferred lender.
Contact a Realtor (Read: Choose a Realtor for a Military Move) in the area ahead of time so he or she can schedule tours of the homes that match your criteria. This will optimize your leave period. Not to mention that it would be helpful to have an address for your future household goods delivery!
There is a chance you will not find a home during your leave, so be sure to establish a Plan B.
Also, be aware that if you do make an offer on a home, it can take anywhere from a few days to a few weeks to settle on an offer that will satisfy both parties. During this time, you will have the option of hiring a home inspector. Always have a potential home inspected. It can’t be stressed enough! Inspectors guard your interests in the purchase and will warn you of any issues concerning the house. If there is an issue, you may provide a counteroffer to the owner addressing any concerns.
Once an offer is accepted, the owner may need time to move out of the home, as well as for the transfer of the title to occur. Therefore, anticipate the probability that you will need to have a place to stay while you wait.
Obtain a Loan
Mortgage lenders want to see that you have secured future employment. Most lenders will hesitate to extend loans to transitioning military without an accepted job offer letter. This may not be revealed to you until after the pre-qualification stage. Be sure to talk directly to a lending representative about your transition and what documentation they will need before house-hunting. Remember, a pre-qualification does not guarantee a loan.
Be aware that any savings you have managed to put away will not count as income. While this looks good to lenders for a down payment and closing costs, lenders want to see continued fiscal power.
If you intend to go to school, note that most lenders do not consider education benefits as income. However, if you will receive disability payments from the VA, be sure to have the documentation of this award, as it is considered income.
VA Home Loans
VA-backed home loans are a wonderful advantage to veterans in the home-buying experience. Be aware that you will need to obtain a Certificate of Eligibility (COE) either through the VA or your lender. Some lending institutions can obtain this for you with documentation of your service (DD214).
Also keep in mind that VA loans have higher standards for the condition of the homes that are eligible. I suggest avoiding homes labeled “as-is” or “fixer-upper” with a VA loan since many of these homes will not pass the necessary standards during inspection.
Prepare and educate yourself, but don’t lose your sense of adventure. You are moving forward into new horizons of opportunity. Enjoy the ride!
Next: Are you sure you’re ready for the transition process? Take our transition readiness quiz to find out!
