As a military family, the decision to buy a home is both exciting and wrought with uncertainty. It means putting down semi-permanent roots and committing to a home for longer than 1 to 2 years.
And the home-buying process can be more than a little overwhelming.
Don’t worry. Breath. You’ve already done the hardest part in committing to the goal of purchasing a new home. Now you just need to get smart about the process. You’ll be unpacking boxes and putting your feet up in your new home before you know it.
Your Home-Buying Checklist: Get Up-Close and Personal with Your Finances
Most of us have a good idea of how much we have in savings and how much our bills are each month, but preparing to buy a house goes much deeper than that.
Get Your Credit Score
- Order your credit report directly from all 3 credit bureaus (Equifax, Experian and TransUnion) or try a site like annualcreditreport.com.
- Dispute any discrepancies and be prepared to show problems have been resolved or were the result of mitigating circumstances.
Pay Down Debt
- Improve your credit score and show lenders you are credit worthy by paying down your debt.
- Make an appointment with a financial planner. Most military installations offer this service through on-post family support agencies like Fleet and Family Support Centers or Army Community Services.
- Calculate your debt-to-income ratio and estimate how much you can afford to spend on your new home.
Save for Your Home’s Down Payment
While it is possible to purchase a home without a down payment, some of the most competitive loan programs require a 10 to 20% down payment. Start saving as soon as you decide you want to buy a home.
Your Home-Buying Checklist: Mortgage Research Is a Must
There is no shortage of mortgage options, but do your due diligence before signing anything. If it sounds too good to be true, it probably is.
Ask Friends and Family Members for Referrals
Ask friends and family members about lending institutions or programs they have used. Learn from their mistakes and successes. If you get a recommendation, take a few minutes to do additional research or call the lending institution and ask for more information.
Get Smart About Terminology
While most loans are fairly standard in their fees and process, there are still plenty of non-traditional options out there. Understanding the difference between a 30-year vs a 15-year mortgage and the pros and cons of an ARM loan is important.
Consider working with a mortgage counselor. They can help you understand the entire mortgage process and often are available for free.
Shop Around for the Best Rates
Don’t just shop one type of loan. A VA-backed loan is often the go-to for service members and retirees, but it is not the only option.
Depending on where you are buying, the amount of your loan, and the type of property, local or regional lending institutions may have programs that offer you a better interest rate. Tools like LendingTree can help do some of the legwork.
Your Home-Buying Checklist: Location, Location, Location
You’ve got your finances in order and have a down payment in the works, now it’s time to start scoping out a location.
As you begin to narrow down where you want to live, ask yourself:
- What is a reasonable commute time?
- Is being close to shopping a necessity?
- Is the size of the neighborhood or its amenities important to me?
- Do I want to buy a newly-constructed home or something in a more established neighborhood?
Then do research on these topics:
- Area schools
- Water, sewer, waste and power/gas rates
- Local tax rates, emergency service costs, and any front or homeowners association fees
- Local crime rates and the sex offenders’ registry statistics
- Traffic and public transportation options
Your Home-Buying Checklist: Wants and Needs
Now the fun part — figuring out what you want in your new home. It’s totally OK to dream, but make sure you prioritize your requirements. Start by identifying those things you absolutely must have in order for your new home to be functional. Start by making a list:
- How many bedrooms do you need?
- How many bathrooms?
- Are there any other special requirements, like single-story or two-car garage?
- What about an open floor plan or home office space?
Now review the list of things you wish you could have and prioritize.
Your Home-Buying Checklist: Hire a Professional Realtor
Ask for recommendations or search local BBB reviews for a licensed Realtor. Look for agents with experience working with military families, like Millie. The information a real estate agent can provide about homes coming onto the market, neighborhoods and the home-buying process is priceless.