Post from MilitaryByOwner
PCS season is coming, and it’s your time to push through the revolving door onto the next duty station.
You knew long before orders were in hand that you wanted to buy a home at the next duty station. You’re ready to say no to another landlord and yes to being a homeowner, so you’ve been preparing. You’ve got your credit in order and saved for a down payment, but what’s next?
1. Research the area
Get familiar with your new duty station. Use resources like Military Town Advisor, MILLIE, the local housing office, and Facebook groups to help you answer questions about the area.
- Where do most people live and why?
- What’s the average price your peers pay for a home?
- Where are the good school districts?
- What’s traffic like, and how long is the commute to work?
- Where are the stores, churches, and extra curriculars?
2. Learn the market
After you have an idea of which neighborhoods meet your family’s needs, take a look at the market.
If you choose to hire a real estate agent, you won’t need to give much thought to the market. The agent will already know and be able to guide you. However, if you plan to go through this portion of the homebuying process without an agent, you’ll need to do a little market research so you can learn to think like a real estate agent.
When you find a home you like, look at other homes in the area to compare price and amenities. This will help you better understand what’s a fair asking price and prevent you from overpaying or raise a red flag if the asking price seems too good to be true. Being aware of variables within competing listings like pools, upgrades, and closing incentives might serve you well in negotiation when it’s time to put in an offer.
Find out what new developments the city has planned. Are they expanding the road? Are they selling the empty lot nearby for commercial development? Sure, you’ll only be there for a few years, but major construction might make selling or leasing the property more difficult in the future.
Understanding the housing market will help you make an educated decision when buying a home.
It’s a new year and a new duty station. Not only do service members see a 2.4% raise this year (the biggest raise since 2010), but your Basic Housing Allowance (BAH) will change with the PCS move.
A mortgage will likely be less that what you’d pay for rent in the area, but you’ll need to factor in other expenses like:
- Homeowners insurance
- HOA fees
- Property taxes
- Mortgage insurance
- Home maintenance costs
These numbers will likely have an affect on your monthly income, so you’ll want to revisit how much money you put toward groceries, car insurance, phone bills, debt, loans, retirement, investments, and spending money to ensure you cut back where you need and don’t overextend your finances when you purchase a home.
4. Get pre-approved for a loan
After you get an idea of how much you’re wanting to spend on a home, you’ll need to get pre-approved for a loan. The bank will take a look at your credit reports, employment, and income and determine how much you’re qualified to borrow and at what interest rate.
You’ll qualify for a VA home loan if you meet following:
- Active duty member with a statement of service.
- Veteran with the Certificate of Release or Discharge from Active Duty Form DD214.
- Spouse of military members who’ve died on active duty or as a result of a service connected disability.
The terms of the VA loan are often more favorable than other home loans. There’s no need to pay for private mortgage insurance with a VA loan, and you can often get a VA home loan with a more competitive interest rate.
If you’ve decided that a VA loan is the right option for you, check out Veterans United. They walk you through the process of pre-approval to help you get started.
5. Find a home
Finding a home doesn’t have to wait until after you’ve PCS’d. You can do a lot of the legwork remotely and finish the process after you move. There are a number of tools available to help expedite the process so you aren’t moving, searching for a home, and closing while living in limbo from a quaint hotel room or military lodging.
The same sources you used to research before, including MilitaryByOwner, will help as you begin the search for a house and narrow your results to a few serious options. In fact, MILLIE Scouts are available for hire and will be your eyes and ears at your new duty station.
Hiring an objective friend to tour a home of interest and walk you through via FaceTime is a huge advantage. Not only does it allow you to scratch a few properties off your list, but might even mean that you start the process of buying your next home before you PCS.
Assuming you’ve been preparing to buy a home and have your finances in order, these five steps should help you get ready to buy a home this PCS season.