What is your best advice for a first time home buyer?

Capt Brandon Charters — Sun, 24 Apr 2016 19:44:50 -0400

Being in the military, or being a veteran, offers some very unique advantages when it comes to home buying. What would be your best piece of advice for a first time buyer?

Response by Sgt Aaron Kennedy, MS made Apr 24 at 2016 7:48 PM

Sgt Aaron Kennedy, MS — Sun, 24 Apr 2016 19:48:56 -0400

Buy a plunger before you need one.

Response by SFC Private RallyPoint Member made Apr 24 at 2016 7:51 PM

SFC Private RallyPoint Member — Sun, 24 Apr 2016 19:51:38 -0400

Don't over buy. I've seen some Soldiers take their VA cert to bank, and get approved for a ridiculous amount and want to buy "that" house.

Response by SP5 Private RallyPoint Member made Apr 24 at 2016 7:52 PM

SP5 Private RallyPoint Member — Sun, 24 Apr 2016 19:52:28 -0400

Buy less than you can afford. Every house comes with its own set of surprises - often quite expensive, and not being strapped with too large payments makes life easier. You really don't want to be married to the banker

Response by LTC Yinon Weiss made Apr 24 at 2016 8:03 PM

LTC Yinon Weiss — Sun, 24 Apr 2016 20:03:56 -0400

Don't be lured into the appeal of buying a new construction home. There is A LOT of work and expense associated with getting them livable.

Find a home from somebody who loves the house and already did all the little upgrades that a self respecting homeowner would find needed to do.

Response by SFC Everett Oliver made Apr 24 at 2016 8:21 PM

SFC Everett Oliver — Sun, 24 Apr 2016 20:21:21 -0400

Double and triple check everything. Know the house before you buy it....

Response by SGT Jerrold Pesz made Apr 24 at 2016 9:07 PM

SGT Jerrold Pesz — Sun, 24 Apr 2016 21:07:06 -0400

Be aware that a house will require repairs as long as you own it and there is no landlord to call. Even a new house will start needing things fixed or replaced within a few years and it doesn't end.

Response by Sgt Private RallyPoint Member made Apr 24 at 2016 9:22 PM

Sgt Private RallyPoint Member — Sun, 24 Apr 2016 21:22:18 -0400

Capt Brandon Charters Sir, a first time home buyer should take their time looking. Establish what features you want in a home, and keep looking until you find the right home at the right price.

Response by CSM Private RallyPoint Member made Apr 25 at 2016 12:50 AM

CSM Private RallyPoint Member — Mon, 25 Apr 2016 00:50:50 -0400

Use your VA Certificate to buy with no down payment. Consider buying a duplex for rental income on one side. Ask the seller to pay all closing costs and pre-paids, so the buyer can go to closing and pay zero. Check around for banks that give the best rate with low or no points. Find a Veteran friendly Realtor to help you find the right home for you.

Response by Capt Michael Greene made Apr 25 at 2016 12:55 AM

Capt Michael Greene — Mon, 25 Apr 2016 00:55:41 -0400

Two things. First, if you're probably going to transfer in a couple years, you might find it hard to sell the house later at a reasonable price. For short terms, consider renting.

Second, when at the bank, remember that everyone involved--the agent, the appraiser, the banker--are not on your side. The banker is trying to SELL you a loan, with a huge cost--interest. Shop around. They are very nice and they say you must "apply" for a loan. HA! I say they must prove to me that they are the best lender. And some of them will guide you toward borrowing money you maybe can't afford. Also, remember that the appraisal might be voodoo. The bank wants to lend you $239,000? Guess what, the appraisal will say the house is worth $240,000, so you can get the transaction approved. Not saying anyone is crooked, just saying that you need to be fully informed before signing anything.

Response by Cpl Mark McMiller made Apr 25 at 2016 3:22 AM

Cpl Mark McMiller — Mon, 25 Apr 2016 03:22:51 -0400

Just off the top of my head: Buy as soon as you are able to in order to start building wealth. Once you own it, never sell as long as you can put a tenant in it who will pay your mortgage for you. If you have to move, pay a property management company to manage the property for you and then buy another home in your new area; repeat. You get many tax breaks for owning a home. You get many more tax breaks for owning a rental property. Real estate is unlike any other kind of investment as you only have to control the property -- not own it -- in order to reap the rewards, and if you have a VA loan, you can control it for nothing down.

Response by CSM Darieus ZaGara made Apr 25 at 2016 5:51 AM

CSM Darieus ZaGara — Mon, 25 Apr 2016 05:51:49 -0400

If it is used talk to the neighbors about construction and codes. Some states codes advance through the years, and while this cannot effect a sale it may effect your wallet. If it is new construction try to learn about each phase and be a present owner checking material and quality, youtube is amazing in this regard. Last but not least, make sure you can afford it.

Response by Col Joseph Lenertz made Apr 25 at 2016 8:12 AM

Col Joseph Lenertz — Mon, 25 Apr 2016 08:12:02 -0400

No ARMs. 30 yr fixed, or even better, 20 or 15 yr fixed if you can manage it. Contact three (or more) home inspectors and ask for their credentials and checklists. Compare and get a recommendation from someone you trust. Then pick one and pay the $250-$350 for the inspection...well worth it. And buy LESS house than you can afford. Be ready to plunk down 5% of home value in repairs and mx the first year and 1% every year after that.

Response by SGM Erik Marquez made Apr 25 at 2016 9:52 AM

SGM Erik Marquez — Mon, 25 Apr 2016 09:52:02 -0400

5 points to consider and only one of the is the price.
Buy the house you can afford...
Be able to afford the monthly payment
Be able to afford the monthly insurance
Be able to afford the month maintenance costs
Be able to afford the month TIME it takes to keep up the house and priority
And be able to afford the sometimes significant unexpected costs that come with home ownership... that AC system the needs repair or replacement, the washing machine, the hose bib that sprung a leak, flooded the wall and now needs plumbing, and construction repair.
A home emergency "piggy" bank acount for emergencs is a great idea. Lots of ways to fill it with out hurting too much. An allotment for $100 monthly perhaps, till it reaches a goal, then drop it to $25. I fill mine with the pocket change each day (collected, cashed in couple times a year and into the "House" savings account it goes) When I do my semi annual steel recycle run that cash payout goes into the account. On mondays as I get ready to start the day....any paper bill in my pocket or wallet smaller than a $20 goes in the coin collection jar.

Response by COL Private RallyPoint Member made Apr 25 at 2016 10:58 AM

COL Private RallyPoint Member — Mon, 25 Apr 2016 10:58:54 -0400

Depends what you are buying for. Are you buying YOUR home or a temporary house you are going to rent out. Are you going to try and sell it when you PCS? Need to have answers before giving sound advice. That being said, this is my personal take on property ownership in the military. I buy where there is a rental market with the intent of having someone else pay off the mortgage and then at some point in the future, I can sell it and make a larger profit after the mortgage is paid way down. Buy when you are somewhere with a guaranteed rental market. Think off post field grade housing. This is a 3-4 bedroom, 2.5 bath, 2 car garage, close to parks, close to post with kids roaming the streets. This is where someone will want to rent for 2-3 years. The first house I bought was at Fort Leavenworth. Obviously there is a HUGE turnover there. Nice neighborhood on a golf course. 4 bedroom, 2.5 bath, 2 car garage. I always have renters and they are always field grade officers with 2-3 kids. Second house was in Dupont, Washington. Yuppieville for Fort Lewis. 5 minutes to the gate...same style house. It's like fly paper for MAJ-LTC with kids. Do not try and flip a house unless you have a down payment that is going to make up for closing costs and taxes. You will take it in the shorts. Buy and keep property. It's a part of my retirement plan. Yes, I have to keep the house up, but honestly...it keeps the house in better condition. I might think about selling a house after it gets to 15 years of age (about the time a furnace is supposed to die) if and ONLY if, I have been able to pay enough of the principle down to make a profit.

Response by Cpl Justin Goolsby made Apr 26 at 2016 1:37 AM

Cpl Justin Goolsby — Tue, 26 Apr 2016 01:37:17 -0400

Make a list of houses you want before you talk to the realtor. They're obviously going to add in some other properties that are close to your criteria.

When we went viewing homes, the 3 homes in our yes pile became absolute no. The houses we were trying to eliminate from our list, 2 became maybes and 1 became a solid yes.

I did all the research in the world, had pictures of the interiors and everything. But photos only show the best angles. One of my yes houses had a wasps nest in the living room. Another had a deck that was falling apart. All the research in the world can't prevent you from seeing a bad house. So be open to homes outside of your personal list. I just bought my home a month ago and the moment we stepped inside, it just clicked that we wanted it. We went through a dozen bad homes after that to make sure it was what we wanted and we put our offer in the same day.

Response by 1SG Private RallyPoint Member made Apr 26 at 2016 6:01 AM

1SG Private RallyPoint Member — Tue, 26 Apr 2016 06:01:05 -0400

I purchased an older home that was on the market for over a year. Got it for 85k stayed 3 years and did modifications to totaling 4K and sold it for 110k. Buying new is a bad ideal the first time. Look for a bargain and put some effort into the house. Mines sold to the first person that looked at it because I took pride in the presentation and repairs.

Response by Cpl Joshua Caldwell made Apr 26 at 2016 7:37 AM

Cpl Joshua Caldwell — Tue, 26 Apr 2016 07:37:03 -0400

Get a home inspection, get title insurance, and assume that the seller is lying about everything. I am a real estate investor and I have bought over 300 houses. I can't tell you all of the things that sellers have lied to me about. It is amazing.

Response by SSG Robert Spina made Apr 26 at 2016 8:27 AM

SSG Robert Spina — Tue, 26 Apr 2016 08:27:03 -0400

MAKE SURE YOU CAN AFFORD THE MORTGAGE ALSO MAKE SURE YOU GET A GOOD HOME INSPECTION

Response by SPC James Villanti made Apr 26 at 2016 8:43 AM

SPC James Villanti — Tue, 26 Apr 2016 08:43:08 -0400

make buying in the best area your first consideration even if it's not the dream home you wanted. It's better than buying your dream home in an area where you will ultimately lose money on your home. Also don't buy more home than you need as your first home

Response by SPC Ronald "Ron" Jensrud made Apr 26 at 2016 8:43 AM

SPC Ronald "Ron" Jensrud — Tue, 26 Apr 2016 08:43:46 -0400

My best advice is to seek out an Exclusive Buyers Agent in the area you are looking.

Exclusive Buyer Agents are 100% on the side of the Home Buyer - 100% of the Time!

Check out http://www.NAEBA.org to find an Exclusive Buyers Agent near you.

Buyers Agent

First home, newlywed or recent graduate? Home purchasing for the first time can be a daunting task. The following information should help ease your journey.

Response by SFC Ken Heise made Apr 26 at 2016 8:48 AM

SFC Ken Heise — Tue, 26 Apr 2016 08:48:28 -0400

The best money you can spend when buying a home is on a home inspection. Even if it's a brand new house.

Response by SPC Bryan Laird made Apr 26 at 2016 9:09 AM

SPC Bryan Laird — Tue, 26 Apr 2016 09:09:38 -0400

Being a Realtor on the civilian side now that I have gone through my ets, I would say talk to your bank. A VA Home Loan has some very nice perks that go with it that your typical FHA loan, or conventional loan doesn't have.

Response by SSG(P) Private RallyPoint Member made Apr 26 at 2016 9:12 AM

SSG(P) Private RallyPoint Member — Tue, 26 Apr 2016 09:12:55 -0400

I would say look at 15year term vs 30 year term. Here's why! As an active duty soldier you're sometimes forced to move sooner than you expect and with a 30 year loan you may end up only paying 2-3 years on a home and amounting to maybe only 3-5% of the financed amount being paid off.
Let's say your house cost $200k and you paid on it for 3 years on a 30 year loan. With the closing costs and fees paid along with the purchase price of the house you may have financed $210k and after 3 years you still owe $200k which is exactly what you paid for it.
Keep in mind the realtor fees to sale a home cost about 10% of the selling price which on a $200k home would run about $20k so with that said on your typical 30 year loan you'd loss lots of money if you were forced to sell therefore forcing you to rent the said home. Some people aren't comfortable doing that.
The 15 year term has a lower interest rate for the most part. People assume that a 15 yr term is double the payment than a 30yr term, not true at all. A 15 yr term would have a lower interest rate and in the end would save you more than $100k in interest paid over the life of a 30 yr $200k loan.
Down load a "payment calculator" app on your phone and see for your self.
With the 15 yr term you could at min break even on a home after only owning it 36-48 payments.
Speak with your bank in question for actual figures on 15yr and 30 yr loans and ask for pros and cons on each. Hope this helps
SSG Stephen

Response by SFC Private RallyPoint Member made Apr 26 at 2016 9:28 AM

SFC Private RallyPoint Member — Tue, 26 Apr 2016 09:28:38 -0400

Don't jump on the first one you like. Give it time. It took me a year to find the right place. Always check the median prices in the area especially being in the military and moving around every few years. The best time to look at houses is after it rains.

Response by CDR James Funk made Apr 26 at 2016 9:29 AM

CDR James Funk — Tue, 26 Apr 2016 09:29:28 -0400

Beware of those signs about "abandoned property" and "take over the mortgage." Have an attorney do some research for you. I know of at least one case where the seller sold a property on a land contract that he didn't own.

Response by CWO3 Matthew Biggs made Apr 26 at 2016 9:37 AM

CWO3 Matthew Biggs — Tue, 26 Apr 2016 09:37:34 -0400

I have a cautionary tale to share - I bought, for many of the reasons you've seen on the rest of this discussion. I bought with the possibility that I might move back to that location when I retired, and rent it out until then. Unfortunately, the market bottomed out in 2007 as you might recall, and my home value literally dropped 25% overnight. It's been slowly moving back up since, but life choices and eventually, civilian employment took me to the other side of the country. I've rented the home out and employed a property manager since 2010 and I'm extremely lucky if I get rent minus the management fees and repairs anywhere within $200 of my mortgage. I just can't wait until I can afford to break even and walk away so that I can buy a home where I live permanently now (and pray that there isn't another housing market crash before then).

I'm not saying that buying isn't a wise decision, but personally, unless it's somewhere that I would like to stay after service time is complete and you're willing to have remote management (if you don't live near the property) and fully understand that repairs can be extremely costly (ever see how much it costs to replace a fence?) I would think hard about holding off. On the plus side, the tax benefits of home ownership are great, especially in some areas where you can even get additional breaks (like Florida, which has a homestead exemption) to take advantage of.

Response by TSgt Private RallyPoint Member made Apr 26 at 2016 9:40 AM

TSgt Private RallyPoint Member — Tue, 26 Apr 2016 09:40:13 -0400

Simple: Find a Realtor who has at least 15 years experience, has sold over 500 homes, has served in the Military, is in the top 5% in your market, and will Rebate at least half of any commission directly to you.

Response by Cpl Brian Buehler made Apr 26 at 2016 9:41 AM

Cpl Brian Buehler — Tue, 26 Apr 2016 09:41:53 -0400

As a real estate agent, my advice is focus first getting pre-qualified to know how much you can afford. Nothing drives agents as crazy as showing homes to people who find the perfect home but can't afford it. That's a waste of everyone's time and a huge disappointment and unnecessary stress on you as a buyer. I purchased my home in 2006. I got pre-qualified and approved for $450,000. I really wanted to be on a lake but I didn't want a $3,250 monthly mortgage payment. I bought a sensible home for $220,000 with a Marina around the corner. I could have my boat in the water in less than 10 minutes and my payment is $1,100 per month.

Next, focus on the specifics of the area (LOCATION, LOCATION, LOCATION.). For instance, is it in a sought after school district (even if you don't have children, this is a re-sale factor down the road. If a family is looking at your home, you've opened up more prospective buyers? What kind of parks/recreation are nearby? Is shopping within a reasonable drive (grocery?). Where are the medical facilities, dental, etc.? Are the homes similar in age in the area? Are the neighbors going to have similar interests as you and your family? What are the crime statistics for the area? Does the neighborhood have a neighborhood watch? Is there a Home Owner's Association? If so, read the restrictions and what is allowed before purchasing.

When you find the right area, find the house as your third step. If you are building, you'll get more in a home you want. If that isn't an option, understand you'll have to prioritize what's important to you and know you're not going to get all you want in a pre-owned home.

I never tell someone to go with a new home over a pre-owned home, or vice versa. They each offer advantages. For instance, new homes are built to the most current code requirements, warranties on appliances, HVAC system, etc. Yes, the largest perceived downside is, the new option you're buying a 'house,' you have to spend money turning it into your home.

Advantages of pre-owned, neighborhoods are typically more established, someone turned it from a house into their home (which could also be a disadvantage,) and the construction kinks have already worked themselves out. A disadvantage of pre-owned homes, how soon do you have to replace things? Appliances, HVAC system, roof, flooring, etc.

I re-read previous posts. I can't emphasize enough pick the right AREA first. If you buy and find out the area is not desirable, you can't move your house. Please do yourself that favor. Moving isn't fun or cheap. Don't put yourself in a position where you'll want to sell in a year and go to the right area. Nobody wants the right house in the wrong place.

In closing, think of the AREA advise this way. I was a Korean Linguist, I was stationed in Monterrey, CA. LOVED THE AREA IMMENSELY. When on the 31st Marine Expeditionary Unit, I spent time in. Okinawa, Japan. NOT SO MUCH enamored with Okinawa.

One thing to note about home warranties, it has been my experience in dealing with American Home Shield and a couple others, there is a service call fee to you as the home owner. The fine print of the warranty typically says something about the warranty will be honored so long as the item covered has been kept in 'normal repair.' That puts a lot of power in the judgement of the Warranty company. If they deem the item isn't kept to 'normal wear and tear' guidelines, they may decline to warranty that item.

Good luck

Response by TSgt Private RallyPoint Member made Apr 26 at 2016 9:43 AM

TSgt Private RallyPoint Member — Tue, 26 Apr 2016 09:43:28 -0400

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Response by MAJ Mark N. made Apr 26 at 2016 9:52 AM

MAJ Mark N. — Tue, 26 Apr 2016 09:52:21 -0400

If you are not going to be stationed at the same location for at least four years, it is likely better to rent vs buy - if you don't want to lose money.

Response by SSgt Private RallyPoint Member made Apr 26 at 2016 10:07 AM

SSgt Private RallyPoint Member — Tue, 26 Apr 2016 10:07:37 -0400

Clean your dream sheet and take a serious look at how long you think you'll remain at your current base

Response by MSgt Danny Hope made Apr 26 at 2016 10:07 AM

MSgt Danny Hope — Tue, 26 Apr 2016 10:07:43 -0400

A lot of good response, but one that has never failed me...always hire your own inspector to go over the property; any inspector provided by the bank will look out for the bank's interest , not yours. Do you research, find a reputable inspector and spend the $400-500 for a thorough inspection.

Response by PO3 Bill Dobbins made Apr 26 at 2016 10:15 AM

PO3 Bill Dobbins — Tue, 26 Apr 2016 10:15:57 -0400

1. Get pre approved for a loan so you know what you can afford.
2. Pick a full time professional real estate agent (the seller pays them). Most of them are part time.
3. Check into the program Homes for Heros there could be huge discounts and rebates in all of the services yiu will use including a rebate on the real estate agents commission..
4. Only buy what you love.
5. Do not buy a home with problems.
6. Have the home inspected by an inspector that goes into the attic and goes on the roof.
7. Do a radon test.
8. Use a DVA loan zero down and lowrer rates.

Response by SGT(P) Private RallyPoint Member made Apr 26 at 2016 10:16 AM

SGT(P) Private RallyPoint Member — Tue, 26 Apr 2016 10:16:07 -0400

There's a lot of good advice here. Just a few unmentioned tips.
1) You make your money when you buy
2) You'll get it when you sell
3) Make your house an asset and not a liability
4) Read Rich Dad, Poor Dad
5) Begin your journey

Response by SPC David Hannaman made Apr 26 at 2016 10:17 AM

SPC David Hannaman — Tue, 26 Apr 2016 10:17:52 -0400

Own a house, don't let it own you.
I recently prequalified for a house, and was surprised to find that they would loan me 47% of my income. That's crazy, didn't they learn anything from the housing bubble? 15 year loan, no more than 25% of your take home pay.

Don't buy unless you plan on living there 5 years or more.
The market fluctuates... when you look at the price of renting vs the price of buying they look like they're about the same, and you can sell the house when you're done living in it right? No... people forget to factor in the cost of taxes, repairs, insurance (renters insurance is MUCH cheaper than homeowners insurance.

Don't fall into the "lets keep it and rent it out" trap when you own a house and you're buying another. I did, my payment was $600/mo, and half the houses on the block were renting for $1,500 a month... easy money right? Wrong, it didn't rent for 9 months, so for 9 months I made two house payments. There went my savings... painful (and expensive) lesson.

Save up a ton of money before you buy.
The VA offers "no money down" (the seller picks up the closing costs). It's a trap. You move into the new house and there's ALWAYS something that needs to be done, fixed, bought.

Understand PMI. Always a good idea to put 20% down on a house... PMI doesn't protect you, it protects the bank, but you get to pay for it.

Home ownership is the American dream, but all too often it becomes a nightmare. Not something that should be an "impulse buy" in any way shape of form. I know, how exciting it can be when you walk into the model home and you get to pick out granite counter tops... but wait, look for the great DEAL... learn how the market works, research the neighborhoods where you want to live.

Response by SSgt Private RallyPoint Member made Apr 26 at 2016 10:27 AM

SSgt Private RallyPoint Member — Tue, 26 Apr 2016 10:27:43 -0400

First and foremost check your credit report for your score and any delinquency information. It is important to know what outstanding debts you have out there and if possible make payment arrangements. Also you will need at least 2 years of all tax statements, 2 months of bank statements and pay stubs. These items are not required for pre-approval but they will be necessary once you chose a loan provider. Check the current interest rates and past to see if there is a trend. Choosing a realtor is the way part but figuring out what you want and can afford has to be known. Crunch the numbers that's including mortgage and insurance to see what's affordable. Read up on home issues from contractor sites so you know what to look for when you view a house. Things like possible foundation issues and if the previous owner was a DIY'er. All of this will give you negotiating power on the price.

The process is long and frustrating but have knowledge and asking questions will alleviate a lot of it. Don't get aw struck by the decorations or the sinks because that will cloud your judgement. Go in there with the mind set that something hasimilar to be broken. That way you pay more attention to the small details that will provide you with an idea of what things may come up on the home inspection.

Also have money on the side for the home inspection. It's not covered or paid for by the seller. It's done prior to you accepting any offer or countering any off from the seller.

Response by CAPT Hiram Patterson made Apr 26 at 2016 10:30 AM

CAPT Hiram Patterson — Tue, 26 Apr 2016 10:30:28 -0400

Don't be tempted to go out and use a VA loan just because you can. I believe you can only use a VA loan once. If you are buying a forever home, then a VA loan may be appropriate. Some sellers will not accept VA financing. Make sure you have enough money to make a down payment which can be hefty if its 10 or 20%. Check your credit scores; the higher the rate the better loan terms. 800's will get the best rate and may get you a lower down payment. When I bought my first home I looked for a good 3 or 4 months. Don't hesitate to change realtors if you're not finding anything to meet your needs.

Response by Capt Dominic Manaligod made Apr 26 at 2016 10:30 AM

Capt Dominic Manaligod — Tue, 26 Apr 2016 10:30:31 -0400

Need to focus on the location where you want to purchase based on the individuals' criteria: Schools, proximity to amenities such as church, groceries, hospitals, restaurants, and other entertainment, attractions and services. Commute to work, crime statistics. You may have the nicest house you love but if it's not in the right neighborhood, you're stuck in that location. Also one thing to consider is the price point to include room for property taxes, insurance, utilities, maintenance and HOAs if applicable. If buying a new construction, make sure you have your own home inspector to inspect various stages of the build, it's beneficial to pay extra to ensure the house was built right. It also behooves the first time home buyer to get a list of all the trades (A/C, landscaping, flooring, etc.) that built the house. It would be handy reference for future use in warranty repairs or additional projects needed. I did not use a realtor with the houses my wife and I bought. They were new construction and we've asked the builder will throw extras into the build since they are not paying a realtor and just divert the money spent for the commission to the house.

Response by CW4 Bob Hardy made Apr 26 at 2016 10:32 AM

CW4 Bob Hardy — Tue, 26 Apr 2016 10:32:25 -0400

1. Research the area - schools, neighborhood, park near the neighborhood around school time and end of the day to see what transpires. People parking in the streets in the afternoon run a neighborhood down when during the day, it looks great. Also, you will see if the neighborhood fits your family (kids, retirees...)

2. Use public records or Zillow to see what previous selling prices were and what recently comparible properties sold for.

3. Don't let a realtor "upsale" you into a house you will be slave to because you can't afford to do anything else because you bought "too much home". We ALL qualify for more house, but the reality is the price of ownership is much more than a mortgage.

4. Shop interest rates and be prepared to put down 10-20% of the price if you aren't using a VA loan. Insure you compare apples to apples when comparing rates. The realtor will steer you to "their" people due to relationships and ease of closing. Do yourself a favor and do a quick internet search for mortgages. Compare closing costs, points, fees.... Be advised, even though a VA loan has little to no down payment, you pay points for that privilege. Consider a HUD or FHA loan. They have lower down payments as well. I recommend figuring 10% of the cost for purchasing. Depending on your market, these can be negotiated between the seller and buyer. The realtor will tell you your costs are normal, but the reality is most items in the closing can be negotiated. The more you negotiate, the more you will be looking at paying the asking price. (market demand considered).

5. If you aren't handy, consider a home maintenance plan. Read the fine print and google their reputation for follow through. Hire a reputable home inspector and depending on the area, verify elevation, property lines, termite status...

6. Buy like you are going to sell. What I am saying is that eventually you will be selling unless this is your forever house. Consider the difficulty in selling the property as you buy it. Is it a normal house or a one of a kind that appeals to a limited demographic?

7. Once you have made your decision, don't be in a huge hurry. I always take three days to sit on my offer. (lessons the emotional toll) Think through the decision and research, research, research. Now, go get that house and enjoy!

FTR, I have owned multiple homes, bought and sold the same, some by owner(FSBO), some by realtor, and three through auctions. I own five properties at this time. One primary home, three rentals, and a home I have owner/financed to my son. And no, these are not Section 8 trash houses. They represent nearly $1M in investments

Response by SPC Private RallyPoint Member made Apr 26 at 2016 10:33 AM

SPC Private RallyPoint Member — Tue, 26 Apr 2016 10:33:12 -0400

Some people get surprised right before signing the papers that water tests may be done. Be aware of this this so you aren't surprised at the last minute and have to rush to get it done. Also look at the ceiling of the house before you buy. If you see stains, they may be coming from the roof, shingles may be old or they could have been replaced but there could have been water damage that wasn't repaired. Ask questions about how old certain features are like: roof or HVAC, these dont last forever so if they are older than 10 years then you should expect to have to replace these at some point in the near future and they are costly.

Response by SGT David Ewers made Apr 26 at 2016 10:34 AM

SGT David Ewers — Tue, 26 Apr 2016 10:34:34 -0400

I purchased my first home about 5 years out of the Military. Here's some advise that I could give...

- Work with a Realtor that you trust and isn't a family friend and doesn't do it part time.

- Make sure that your credit is solid, make sure you don't finance anything while looking for a house. Realtors go crazy when they need to adjust the the paperwork because you went out and purchased a new car.

- If going for a VA loan make sure that you can afford everything, Insurance, Mortgage, Taxes. With a VA loan all of that is wrapped up in the mortgage and paid from an escrow account.

- Request a copy of the closing documents at least 24 hours ahead of time. That way you can go over everything on your time and understand the language that is in the contract. Highlight anything you don't understand and bring that document with you to your closing, ask the closing agent for clarification.

- Like others have said, don't be drawn in by new construction, the cost isn't worth it. Remember, new construction doesn't include window coverings, I've been in homes for sale that were new construction with blankets over the windows. Window coverings can be pretty expensive.

- View an online amortization schedule, know up front how much your house is going to cost you. Plug in the difference between a 30 year and 15 year, you'd be amazed with the cost difference.

- Know your market, is it a buyers or sellers market. Be ready for disappointments but always remember that your new house may be right around the corner. We purchased in a sellers market, our house was on the market for one day and already had three interested parties. If going with a VA loan understand the requirements, they are different than a traditional loan. Seller is responsible for all closing costs so we offset the cost with our earnest money. One of the questions posed to us was "Are the buyers serious about purchasing" We made our statement with earnest money.

- Walls can be painted, furnishings are not yours and will (should) be removed. Look at the potential in the house, what you would do to make it your own.

- ALWAYS, ALWAYS, ALWAYS hire a home inspector, sellers will do their best to hide damage. We walked in one home that used packing tape to keep the molding on the wall due to termite damage, our home inspector found it and pointed it out. They can tell you the hidden costs that you're going to be purchasing, new roof, dry rot, termite damage, etc. Remember if a VA loan is going to be used, the VA will hire their own inspector and will come back with a list of things that need to be fixed before they underwrite the loan. The main thing that we saw was "fix areas conducive to promote termite damage". Luckily our sellers were willing to make repairs based on the VA inspector's results.

- Shop around for a mortgage interest rate, just because they advertise a VA loan doesn't mean that they will give you the best rate. We were going to go local we were given a rate, my wife contacted a company that she knew and they came in 3% points below what we were originally quoted. 3% doesn't seem much but go up to the amortization schedule and plug it in.

- Lastly be aware of neighborhood association fees, we don't have any so they don't apply to us but the rules can be very strict, how many vehicles can be parked outside, no parking on the road, even down to the color of your house and roof. Be aware of the rules before you purchase the home.

We purchased our house in 2000, refinanced from a 30 to a 15 in 2003 and it's paid off now.

Response by TSgt Grigsby, Bob made Apr 26 at 2016 10:39 AM

TSgt Grigsby, Bob — Tue, 26 Apr 2016 10:39:44 -0400

Educate yourself on possible loan options. If at all possible put something down. IF the bank offers you a variable rate mortgage tell them no. Even though a variable rate mortgage may look ideal in the beginning it can hurt you in the end. Your mortgage payments can change every six months. The best bet is your lower rate and if you can afford it on a 15 or 30 year note. Use your VA loan options if you have them. I think the biggest thing to do is to shop for the best interest rate. One other thing is have your taxes and insurance included in the monthly payment. If the bank doesn't have this option, don't use that bank.

Response by PO1 Private RallyPoint Member made Apr 26 at 2016 10:49 AM

PO1 Private RallyPoint Member — Tue, 26 Apr 2016 10:49:24 -0400

Take your time and work with a credible realtor. Make sure the underwriter has experience with VA loans. Don't get discouraged by the amount of documents they request. Do yourself a favor and request your Certificate of Eligibility (COE) ahead of time. Do your research on the process for a VA loan. If you have a great reputation with a bank try to use their underwriter if possible.

Also know the difference between Pre-Qualified and Pre-Approved. Pre-Qualified means you that you COULD be approved for a specific amount. Pre-Approved means your ARE approved for that amount.

Also, pay a professional inspector to inspect the home. Most will give a Military discount. You will get a chance to renegotiate the price if you find a discrepancy.

USAA is a great way to get a home loan. They know the in's and out's of a VA loan and they give you great deals like no cost appraisals and discount on realtor fees if you use their realtors.

If you are self-employed don't even try to buy a home until you have atleast 2 years of business taxes complete and filed. I'm self-employed and didn't have 2 years of business taxes and had to pay $9,000 to have audited financials done. The only reason I went forward is because we already sold our house and didn't want to rent for too long due to lease lengths.

Response by SFC James Pyle made Apr 26 at 2016 10:53 AM

SFC James Pyle — Tue, 26 Apr 2016 10:53:07 -0400

Buy what you need most, not what you want most and then learn how much is involved with home ownership and the next time take what you know and buy a little more of what you want than just what you need

Response by SFC James Pyle made Apr 26 at 2016 10:53 AM

SFC James Pyle — Tue, 26 Apr 2016 10:53:41 -0400

Buy what you need most, not what you want most and learn how much is involved with home ownership. The next time, take what you know and buy a little more of what you want than just what you need

Response by TSgt Torrence Harris made Apr 26 at 2016 10:59 AM

TSgt Torrence Harris — Tue, 26 Apr 2016 10:59:33 -0400

Do you home work. talk to the neighbors, Do a thorough inspection before closing. Google the address. How many owners? Pets? Fire? Flood? Leave no stone unturned. Why are they selling? Property values? Location, location, and ...Location!

Response by SGT Private RallyPoint Member made Apr 26 at 2016 11:24 AM

SGT Private RallyPoint Member — Tue, 26 Apr 2016 11:24:37 -0400

Two most valuable (and costly) rooms in a house are the kitchen and the bathroom. Try to keep an eye out for houses where the previous homeowners recently upgraded both.

Also, if a realtor or a real estate lawyer talks about PMI (Private Mortgage Insurance) - run. First, your VA loan should negate the need, second, if you're putting at least 20% down it usually isn't required even if not using your VA loan, and third, it is an unnecessary waste of money.

Response by SrA Troy Barber made Apr 26 at 2016 11:35 AM

SrA Troy Barber — Tue, 26 Apr 2016 11:35:37 -0400

Find a good lender and a good realtor/buyers agent (they work for you) before you start looking.

Response by Lt Col John (Jack) Christensen made Apr 26 at 2016 11:39 AM

Lt Col John (Jack) Christensen — Tue, 26 Apr 2016 11:39:30 -0400

Everyone has some excellent advice. The first thing you should do is your homework; why do you want to buy? As an active duty member, if your answer is to make money, don't buy. If your answer is to establish an off base home for your family continue the home search. You also need to look at where you stand as to possible transfer; if you are within a year don't buy but if you just were assigned and expect a normal 3 year rotation press on. Next look at what you can reasonably afford, don't buy more than that no matter what; have to stand firm on this. Next, use your VA benefit and get pre-approved. Yes there are more hoops to jump through but for a zero down loan it's worth the time and effort. Once you have done all that start looking for real estate agents; depending on where you are this can be difficult. You pretty much need to have neighborhood narrowed down. Here in Florida the agent who is an expert in one neighborhood knows nothing about ones several miles away so does what you can do yourself, searches MLS and real estate apps. Once you find the home you like, always put seller pays points and subject to inspection into your initial offer, lots of sellers balk at points but you can negotiate up to paying their price if they'll pay points. Passing inspection is a given and if getting VA loan mandatory. Finally know that it will most likely cost more than planned, but if you go back to the homework part and did it right you'll be fine and enjoy your new home.

Response by COL Roger King made Apr 26 at 2016 11:42 AM

COL Roger King — Tue, 26 Apr 2016 11:42:20 -0400

First, decide your strategy...short term (buy and sell with assignment length) or long (buy and hold for amassing properties over time). With neither should you buy at the top of your price range. For short term, always buy a house you can afford to improve...that helps put you on the plus side with a three year turn over.

Response by CMSgt Barrie Baird made Apr 26 at 2016 11:51 AM

CMSgt Barrie Baird — Tue, 26 Apr 2016 11:51:12 -0400

Visit an established mortgage lender - ask about first time home buyer programs, check your credit score, DO NOT buy expensive items before your mortgage loan is approved, educate yourself on your VA benefits, interview prospective Realtors and ask them for resumes.

Response by LT Private RallyPoint Member made Apr 26 at 2016 12:08 PM

LT Private RallyPoint Member — Tue, 26 Apr 2016 12:08:11 -0400

Go to DaveRamsey.com he has great advise on home buying. He has a pretty basic (no cost) philosophy on home buying and becoming debt free.

Response by Maj Private RallyPoint Member made Apr 26 at 2016 12:12 PM

Maj Private RallyPoint Member — Tue, 26 Apr 2016 12:12:28 -0400

As a financial planner, my first comment is that "home as American dream" is a great tagline for a realtor commercial. There are plenty of times in life when renting makes perfect sense. Whether you get a 15 or 30yr loan, you are making a promise to make payments against a salary that you can't necessarily predict that far into the future. Even outside the military, most people don't work in one spot for 15yr, much less 30. Think about what you will be doing 15 years from now, assuming you experience the career path you want...and another plan assuming a less appealing path. For most of us, the reality is somewhere between best case and worst case. The house you buy, and when to own vs. rent, looks a lot different when you look at the middle ground between best and worst case scenario. There is something to be said about having financial flexibility in the future. Maybe your next career move requires you to take a step back in terms of salary to take two steps forward down the road. The higher your monthly expenses, the less flexibility you'll have in choices over time.

Response by MSgt Marvin Kinderknecht made Apr 26 at 2016 12:16 PM

MSgt Marvin Kinderknecht — Tue, 26 Apr 2016 12:16:08 -0400

Check with USAA

Response by SCPO Jason McLaughlin made Apr 26 at 2016 12:35 PM

SCPO Jason McLaughlin — Tue, 26 Apr 2016 12:35:48 -0400

1. Make sure your credit is in order. If you have a weak credit score it could impact your ability to get the best loan.
2. Get pre-approved for a mortgage by shopping for the best rates. Research "buying points" to see what is best for you and your budget.
3. Research the area you wish to buy. School districts, tax rates, insurance rates, future development, all which impact the value and resell value of the home.
4. Hire a reputable real estate agent. Do not use the same agent or agency as the seller.
5. Once you have selected the home make sure you have a thorough home inspection. Make sure you know the age or the HVAC system, Roof, and appliances, they can affect you negotiations.

Response by SGT Johnny Owens made Apr 26 at 2016 12:47 PM

SGT Johnny Owens — Tue, 26 Apr 2016 12:47:23 -0400

1. Make a list of expectations.
2. Buy a house that you can afford on one salary.
3. Purchase where you'd like to be in ten years.
4. Consider different loan terms, 30 years is a long time, but you can always add extra cash. If you get a similar interest rate the 30 year gives you fluctuation.

Response by SFC Jimmy Hernandez-Benitez made Apr 26 at 2016 12:49 PM

SFC Jimmy Hernandez-Benitez — Tue, 26 Apr 2016 12:49:07 -0400

Do your research on the house and buy what you can afford. I prefer a fix rate that a variable rate. I had so many problem with a variable loan. This economy is crazy and your payment will always go up on a variable loan.

Response by CSM Private RallyPoint Member made Apr 26 at 2016 1:04 PM

CSM Private RallyPoint Member — Tue, 26 Apr 2016 13:04:44 -0400

Sir, I recommend using the USAA Home Buyers Program. If you are not a USAA member, it takes $50.00 to open a checking account with them. After you become a member, you go to their website, find the Home Buyers Program page, fill out an easy survey indicating what and where you want to buy and within 24 hours, your USAA Home Buyers Program Counselor will contact you (a counselor contacted me within 2 hours on my last purchase). They will then assign you a realtor in your area. These realtors are vetted by USAA. They must be full time, not part time and have no bad paper. If you don't like the assigned realtor, contact your counselor and they will assign another realtor for you. I had to do this once and it was fast and easy. When you purchase a home using this program, you get a bonus from USAA based on the purchase price. I've purchased three homes using the program and I will continue to use them. Hope this helps.

Response by SFC Kim Armstrong made Apr 26 at 2016 1:11 PM

SFC Kim Armstrong — Tue, 26 Apr 2016 13:11:19 -0400

I would say if you are still in the military and not in a stable situation. Rent do not buy. I bought my first house when I retired due to the fact that moving puts you in a precarious situation if in the future you are going to move to a new duty with family in tow. The house is will take a while to sell and if you rent it out maintenance and up keep is difficult even with a management company.

Response by SCPO Private RallyPoint Member made Apr 26 at 2016 1:17 PM

SCPO Private RallyPoint Member — Tue, 26 Apr 2016 13:17:27 -0400

My wife and I are shopping for our first home and just received our bid acceptance from a seller. We could qualify for a $400k loan, but decided on about half of that, to keep things easier to pay down. The first step is to get PreApproved for a loan, so shop around and see what is out there. Secondly, get referrals from people for a realtor. There are many good ones, but it never hurts to make sure you're getting one who knows your area and who is willing to take the time to take you around and show you the houses you would be interested in.
Thirdly, do your research about crime. Realtors cannot tell you if there is a predatory offender in your neighborhood or if the crime is bad. I have a buddy who is a realtor and he says it could cost him his license if he steers you into or out of an area. So, he frequently locks his doors if he knows something he can't say out loud.
4. When you make your offer, figure oUT how much cash you need to have on hand to close. Don't overextend yourself.

Response by SSgt Jerry DeLaney made Apr 26 at 2016 1:22 PM

SSgt Jerry DeLaney — Tue, 26 Apr 2016 13:22:13 -0400

Hire an independent home inspector or a general contractor to inspect the home's electrical, plumbing, foundation, roof, etc. If you rely on an inspector hired by someone else, they work dor someone else... Not you!

Response by SSgt Brian Shanabrough made Apr 26 at 2016 1:57 PM

SSgt Brian Shanabrough — Tue, 26 Apr 2016 13:57:46 -0400

Heres the best advice I can give..

https://www.daveramsey.com/home-buying-tips/home/

Dave Ramsey - Take Control Of Your Life And Money

New York Times best-selling author and radio host Dave Ramsey is America's trusted voice on money. Learn how to budget, beat debt, and build a legacy with Dave's proven plan.

Response by PO1 Private RallyPoint Member made Apr 26 at 2016 2:43 PM

PO1 Private RallyPoint Member — Tue, 26 Apr 2016 14:43:06 -0400

Check out banks who specifically handle VA loans. Try to buy down your loan to the best interest rate.

Response by SPC Private RallyPoint Member made Apr 26 at 2016 2:46 PM

SPC Private RallyPoint Member — Tue, 26 Apr 2016 14:46:19 -0400

Buy cheap, notice location and invest to increase real estate value then sell if you wish to increase to better accommodations, take note of mortgage value and payments

Response by SFC Private RallyPoint Member made Apr 26 at 2016 3:38 PM

SFC Private RallyPoint Member — Tue, 26 Apr 2016 15:38:21 -0400

Don't do it.

Response by MSgt Darum Danford made Apr 26 at 2016 3:42 PM

MSgt Darum Danford — Tue, 26 Apr 2016 15:42:49 -0400

Hire your own contractor to do an inspection and do your own independent research to find your own. If there is ever anything the seller agrees to fix make sure they get it done to your expectations. Trust they did it but verify with your own eyes.

Response by PO3 Thomas Dickey made Apr 26 at 2016 3:47 PM

PO3 Thomas Dickey — Tue, 26 Apr 2016 15:47:32 -0400

Going off my first house, I must say a couple of things. First, buy within your means; every home is going to need some type of repair or paint, or something. you also don't want to have to work two jobs just to afford the house. Two, make sure you have it properly inspected. My forst home burned due to an electrical fire. The home inspector for my VA Loan apparently walked through the place blind, to have missed it! I learned a lot from that incident.

Response by PO1 Donald Vinson made Apr 26 at 2016 4:45 PM

PO1 Donald Vinson — Tue, 26 Apr 2016 16:45:51 -0400

There is a lot of considerations, but do your homework. I would say it's still a buyers market and you can get a used house a lot cheaper price wise compared to buying a new one. Make sure what you and your agent talk about is actually written on paper and have them thoroughly explain everything. I was also suggest to not rush into buying the first house you like, because they will be more houses that may have something better, good luck.

Response by Sgt Darlene Wilson made Apr 26 at 2016 5:07 PM

Sgt Darlene Wilson — Tue, 26 Apr 2016 17:07:46 -0400

Do your homework. Check neighborhoods, schools(if needed), real estate taxes, insurance quotes, check for Home Owner Associations and what they would include and the rules. You do not have to buy as much house as you can afford. Read all of the paperwork you are signing and be advised of the closing cost associated with your purchase. Happy house hunting.

Response by CMSgt Lloyd French made Apr 26 at 2016 5:28 PM

CMSgt Lloyd French — Tue, 26 Apr 2016 17:28:59 -0400

1) Know what you can afford and shoot for 10% less as your purchase target.
2) Check out the location (schools, traffic, crime, shopping, ease of commute, ease of upkeep, HOA, etc.)
3) Check the tax records to see how much the owner paid for it ... and when
4) Be wary of "as is" sales ... ask if there are any issues requiring disclosure
5) Visit the home 3 times; once in the morning, in the afternoon, and in the evening (look, smell, listen) use your senses
6) Buy a house you would otherwise rent...it could be a great investment for you when you change stations
7) Get your own inspector...don't use the realtor's inspector...no reason (I'm paranoid that way) ... but get a good realtor anyway
8) Make all your payments on time, set up allotments, have good tools

Response by SSG Warren Wright made Apr 26 at 2016 5:57 PM

SSG Warren Wright — Tue, 26 Apr 2016 17:57:38 -0400

Do your research throughly with banks

Response by COL John Hudson made Apr 26 at 2016 7:45 PM

COL John Hudson — Tue, 26 Apr 2016 19:45:19 -0400

Never buy any home (new or used) without having a pre-purchase "Home Inspection" done by a State Licensed reputable company. They run about $350~$500 but are worth their weight in gold. Questionable items found by the Inspector generate a solid, detailed report which is referred to the Seller who must correct them prior to close of sale at the Seller's expense. *OR* - the Seller may lower the selling cost if the Buyer wants to take on the cost of repair themselves. I've seen too many Buyers (young and old) 'in a hurry;' get screwed when just after moving in they discover something is broken or was only temporarily fixed and they're stuck with a big repair bill right off the starting line. Buying a house is one of those "first great events" in anyone's life...make it one of the best by being mindful of this easy home-buying strategy. Caveat Emptor

Response by CAPT Mark Cawthorn made Apr 26 at 2016 7:56 PM

CAPT Mark Cawthorn — Tue, 26 Apr 2016 19:56:51 -0400

Take your time and find the right house - do your research (school, taxes, home inspections, etc). Also, I think it is better to purchase a home that is being sold by a owner/occupier, vice a rental property - such properties tend to be better maintained. Use your VA Loan if you are not ready for a hefty downpayment.

Response by SFC Joseph Dunphy made Apr 26 at 2016 9:11 PM

SFC Joseph Dunphy — Tue, 26 Apr 2016 21:11:01 -0400

Talk with an insurance agent about Property and Casualty insurance first, to see what's covered and not covered in case of accidents/storm damage. Once you get a house, you have to fill it with things you can afford on top of the monthly mortgage payments, and if they are damaged you want to be able to replace them with comparable items. People hit by Hurricane Katrina and Hurricane Sandy found out the hard way what the insurance companies will cover. Don't be caught short. If you get deployed, it's very hard to try to correct insurance issues at long distance.

Response by SPC Josh Robinson made Apr 26 at 2016 10:14 PM

SPC Josh Robinson — Tue, 26 Apr 2016 22:14:04 -0400

Ah. Officer problems.

Response by PO1 Jack Howell made Apr 26 at 2016 11:43 PM

PO1 Jack Howell — Tue, 26 Apr 2016 23:43:07 -0400

There are three things to consider when buying a house: location, location, location. Look at the area that you're considering living in. The city, as well as the state, can and in many cases will dictate the price of the home. While you don't necessarily need to buy a brand new home. You can get a relatively new home for a decent price. Unless you have the time and money, stay away from old houses. Because of their age, the maintenance and repair costs will be higher (similar in principle to a car). If you have a family, look at the schools in the area. Get a VA loan. This loan will allow you to get a fixed interest rate and you won't have to put any money down. Look closely at ALL of the paperwork before you sign anything. Have all of the numbers (financing, property taxes, etc.) checked at least three times. I say this because the people that did the financing on the house that I used to own didn't properly compute the amount of property taxes that were supposed to go into our impound account (that's the account that the property tax payments will come from). We received a notice from the bank that held our mortgage stating that because there wasn't enough money in the impound account, they would have to increase our monthly mortgage payment by nearly $500 to make up for the deficit. Finally, don't be lured into refinancing by all of the mortgage companies that will inundate your mail box. many of the refinance offers aren't good at all.

Response by SFC Ronald Burris made Apr 27 at 2016 3:10 AM

SFC Ronald Burris — Wed, 27 Apr 2016 03:10:31 -0400

Make sure you have a good Agent that will represent you throughout the process and not just give you a list and have you go and do all the leg work while they are busy doing something else. They make a commission if you buy a house so they should help you out. Make sure you are in a good location when buying a house. Make sure there isn't any railroad tracks, major highways close by or a lot of dogs in the neighborhood where you are looking to make sure it is mostly quiet when you are sleeping at night and not being kept awake by all the noise all three make. Make sure that the neighborhood is quiet, safe and easy access in and out of the neighborhood to include locations to make sure the traffic going in in and out isn't always backed up when going to and from work. Make sure you get a decent inspector to check the house you are buying out before you buy it. Make sure the inspector is reputable and doesn't cut corners when inspecting the house. Remember if the inspector takes shortcuts, you could end up paying for the mistake later on as you are living in the house. Make sure if there are a lot of shrubs in the yard to look behind it to make sure there wasn't a fire before on the inside or the outside of the house. That might hide possible problems that may need to be looked at so you are not having to pay out of pocket after purchase. It doesn't matter if the house you are buying has a year before the owner fixes everything, you need to make sure as a precaution, prior to Closing, that your house is repaired the way it should be. Most often if you wait, the previous owners end up making up excuses why they can't come on the day they promised to start working on the repairs. Before you know it the year is up and nothing is done where you will end up coming up with the money to make the repairs.

Response by PO2 David J Horn made Apr 27 at 2016 3:14 AM

PO2 David J Horn — Wed, 27 Apr 2016 03:14:58 -0400

After working at a mortgage company that had been bought out by IBM, I learned how fannie mae and freddie mac cornered the market on home mortgages (actually on most home sales in general). I found out that they took money from investors from all spectrums of wealth (from the very wealthy to those investing in retirement funds). I studdied about how they would buy all the homes they could find for sale; they would buy a bunch of houses for about $12,000, and then trickle only some of those houses back on the market for something like $25,000... When the private sales went up to nearly match those prices, then they would buy as many of those as they could buy and then sale only a portion of those for over $30,000. Decades of this contributed greatly to the housing bubble since the value of brick and mortar (and other building materials does not typically rise that much). Knowing this, if I were to consider buying a home today.... I would take great consideration to how expensive a mortgage actually turns out to be (not to mention property taxes and home repair costs). I would really consider limiting the amount of money I would borrow to perhaps half of what the bank would limit me to. Most of what one pays into a modern day house purchase is still part of that bubble. It will very likely continue to get blown up again, yet someday the bubble will inevitably burst again. I enjoy the land I have bought, but it is with great caution I buy, and I pay cash whenever I am capable.

Response by SGT Jim Donner made Apr 27 at 2016 4:44 AM

SGT Jim Donner — Wed, 27 Apr 2016 04:44:41 -0400

if you still move every four years don't buy a home

Response by MSgt Wayne Morris made Apr 27 at 2016 7:06 AM

MSgt Wayne Morris — Wed, 27 Apr 2016 07:06:00 -0400

Don't buy more house than you can realistically afford; unexpected repairs can play havoc.
Seriously consider a 20 year mortgage. They are not that much more and 30 years are a rip off.
Don't let an older home frighten you off if it has good bones. Many times they are of better quality and materials, and all of the bugs have been worked out. If you get a good plumbing and electrical report, consider it as your neighborhood is already established Lastly, avoid HOA's if possible or read their rules prior to signing a contract for purchase. Too many times these can be controlled by bored, retired lawyers or colonels and you may find yourself living in "base housing" again run by a little bunch of dictators who go to the extremes.

Response by SCPO Jason McLaughlin made Apr 27 at 2016 7:28 AM

SCPO Jason McLaughlin — Wed, 27 Apr 2016 07:28:48 -0400

A little ditty about home warranties....
Their cost is dependent on several factors.
1. How much you wish to pay for the service calls?
2. Are you including a pool?
Do a cost analysis regarding cost to replace your appliances.
Most appliances are made to last 8-12 years.
Home warranties operate under the philosophy that if it can be fixed, they will fix it, not replace it.

Response by SPC John McKenna made Apr 27 at 2016 7:46 AM

SPC John McKenna — Wed, 27 Apr 2016 07:46:08 -0400

To re-affirm the " Don't over buy" comment below, I would say don't even buy to the upper limit of what the text book says you can afford, but purchace mid-range.

Also, what is you neighborhood gonna be like in ten years? All the World War Two Era Old Folks died around us, and now we have low rent, transient types, and broken families, with no respect for us stable people, living next door on three sides! ( Live out on some lonely country road, where your "neighbors" can't bother you. )

Don't look at the home evaluation-inspection through Rose Colored glasses; we did, and now we regret it much.

Response by SPC(P) Private RallyPoint Member made Apr 27 at 2016 8:54 AM

SPC(P) Private RallyPoint Member — Wed, 27 Apr 2016 08:54:48 -0400

As a first time home buyer (closing on Friday) these are all well received, my fiancé and I started looking at one price range and I'm glad we opted to lower our budget. We will definitely be starting a home emergency fund so thank you to everyone for that idea.

Response by MAJ Michael Pauling made Apr 27 at 2016 9:30 AM

MAJ Michael Pauling — Wed, 27 Apr 2016 09:30:51 -0400

Ensure the monthly payment is one you can afford on your pension if you are looking long term.

Response by 1SG Patrick Sims made Apr 27 at 2016 9:46 AM

1SG Patrick Sims — Wed, 27 Apr 2016 09:46:07 -0400

Speaking as someone who has own his own homes (five) for forty five years, location is everything. First---decide what you want---Second---make up your mind-- your not going to get everything you want. --Don't reject a home because the present owner is a slob and the house is messy. --Don't reject it because you don't like the colors of a room. ---The most important thing is where the house is---If its a great deal, and you can't walk down the street without getting mugged, it's not a good deal. I've always opted for something in a housing development if you like neighbors, or in the country if you want to have some living space. Think into the future. Give yourself room to build on an addition, a deck, a garage, a storage shed, or barn. Think about safety for your kids. If you buy on a main road going into a housing development, it could be as dangerous as buying on a highway. Do you have public water or a well. If you have a well, run the water out of the well into the tub for a few minutes to see if the water smells or has a bad taste. The home owner could charge up the filtering system to make the water seem fine. After running it for a few minutes it flushes out the filtering system. Do you have sewers or a septic system. If its a septic system look for wet spots in the yard, or a depressed spot that could indicate the septic tank is collapsing. If you get a home with a septic system, dump a small bag of cooking yeast in the toilet every week. This will increase bacteria action in the septic tank to break down solid waste.

Response by TSgt Private RallyPoint Member made Apr 27 at 2016 11:02 AM

TSgt Private RallyPoint Member — Wed, 27 Apr 2016 11:02:06 -0400

If you're looking for a modest house because you don't need anything big or fancy, you might be able to pull off a 15 year loan for less interest but higher monthly mortgage payment. MOST people do 30 year, including myself.
Know what your BAH is, where you are buying. Keep in mind when working out your monthly payment is that it will be higher due to added escrow. I recommend total payments (mortgage + escrow) be your BAH or less.
If you want the process to be effortless-- USE USAA. If you don't bank with them, sign up! They will do everything for you. They will pre-approve you, find you a realtor, and if you do the VA loan (which I recommend, so you don't have any down payment requirements) they will also take care of things like termite inspections, if your state requires it (no cost to you). You will have to pay for the standard generic home inspection, however. Call around, get quotes. Get suggestions from your realtor.
Don't fall in love with the first or third house you see. Be patient and keep looking, just in case. Try not to buy a house the moment you move to a new base. (sometimes this is unavoidable). You might want to rent for a short while, until you know the area well. Some extended stay hotels give you amazing deals for weekly or monthly rates while you're waiting for your house to close (can commonly take 30 days, give or take). Don't stay in TLF on base past the 10 or so days you get for free, if you've just moved. That can be twice as expensive as off base rentals.

Response by MSG Carlos Guerrero made Apr 27 at 2016 11:13 AM

MSG Carlos Guerrero — Wed, 27 Apr 2016 11:13:02 -0400

I think it's always a good idea to purchase a home when you first PCS. It usually takes a few years to accumulate equity in your home and the military loves to PCS you unexpectedly. That's why it is very important that you buy in an area with the potential for good resale value. The school district is one of the most important factors, for resale, when purchasing a home. I recommend looking for a home with good schools and amenities nearby. Only buy as much home as you need and when you set a budget on the cost of your new home, don't exceed it. Many realtors will try to push you a bit over your budgeted amount. Make sure you get an inspection done, regardless of whether it is a brand new home or not.
I recommend ensuring that you set aside at least three months of mortgage payments after you purchase your home. This will relieve some stress when it comes time to PCS and you have to place your house on the market. I've heard a lot of horror stories where people had to PCS and could not sale or rent their home for long periods of time. Good luck.

Response by TSgt James Carson made Apr 27 at 2016 3:51 PM

TSgt James Carson — Wed, 27 Apr 2016 15:51:10 -0400

Save money as best you can, and buy a home when you are ready to leave the military, say the last year. Make sure you lacate in a area with ample job prospects as getting settled in is tuff. Make sure you are able to pay all taxes and fees to come your way, as this will effect your home ownership.

Response by SFC Private RallyPoint Member made Apr 28 at 2016 3:12 PM

SFC Private RallyPoint Member — Thu, 28 Apr 2016 15:12:05 -0400

Knowing that your in the military. Consider what will happen when you PCS. What is the market for rentals? How many homes in the area are already for sale and how long have these homes been on the market. Can you afford to continue making payments once you have PCS? I have seen many Soldiers go into foreclosure because they didn't plan ahead. I have always been lucky and sold in the 1st 30 days.

Response by CW4 Anthoney Lowry made Apr 28 at 2016 3:24 PM

CW4 Anthoney Lowry — Thu, 28 Apr 2016 15:24:52 -0400

check out the neighbors on all sides. I looked at a place that looked real good inside and out. problem was the trailer park behind a row of trees as the back yard neighbors. Also, do multiple drive-byes at different times of the day and night to see what is going on in the neighborhood. as said by others, Location. everything else can be changed.

Response by MSgt Private RallyPoint Member made Apr 28 at 2016 6:31 PM

MSgt Private RallyPoint Member — Thu, 28 Apr 2016 18:31:42 -0400

understand that there is almost no such thing as the "perfect house". Buy a home that suits YOUR needs and that you are comfortable living in and paying for. no need to buy a 5 bedroom\6 bath home if you don't plan on having kids/senior relatives living with you to fill them up. if you don't like yard work, don't look for a couple acres of land. understand that mortgage prices can be tied to property taxes and could increase/decrease over the period of time that you own the home. if you have friends and relatives in the real estate field look to them for advice and guidance.

Response by CPT Private RallyPoint Member made Apr 28 at 2016 10:52 PM

CPT Private RallyPoint Member — Thu, 28 Apr 2016 22:52:10 -0400

Know what you can afford BEFORE looking at houses and stick to your budget. On a similar note, give yourself a range to work with... Too cheap might be wrought with problems and too expensive can get you over your head in payments.

Get a realtor. There are tons of issues and concerns when buying a house and they are just like lawyers... They know the terrain, represent you, and will help you plan your best strategy for finding the house you want. They also do a lot of the leg work for you and have connections to other people like home inspectors or financial firms who might give unadvertised discounts to veterans.

Make sure to check nearby areas. School districts are important. Even if you don't have kids, a good school district will help the value of your home and make it easier to sell when you're ready to move. Also, is it close enough to other things you might want access to? Grocery stores, malls, etc.

Finally, leave emotion out of the equation. I know that can be hard, but it's the easiest way to fall into a trap. Time constraints are a legitimate factor when buying because other people are looking at the same home, but don't make rash decisions. If that means losing out on what you thought was your dream house, so be it. Sometimes it's for the best when you find another one more suited to you and 10K cheaper.

Response by CPO Rolando D made Apr 29 at 2016 9:58 PM

CPO Rolando D — Fri, 29 Apr 2016 21:58:36 -0400

Find a trustworthy financial advisor. Just because you "think" you can afford a home you are interested in doesn't mean you can. You really have to break down and figure out your finances. You need to know incidental expenses like property tax, insurance, maintenance, etc, as others have mentioned before. Mortgage is going to be your biggest expense. Make sure you have enough left over to spend on other things that you enjoy, otherwise you'll wind up "house poor" meaning yes, you have a nice house but can't afford anything else. I stuck to one rule: My military housing allowance must be able to cover my entire mortgage. That way, the Navy was paying for my house, not me. I started with a small house when I started a family. Five years later, I bought my second, larger home, kept my first home as a rental. Then another five years later, I bought the house I'm currently living in, and kept my second home as a rental as well. I made my housing allowance work for me back then, and continues to generate income and equity for me today, 3 years after I retired from the military.

Response by CPO Rolando D made Apr 30 at 2016 12:36 PM

CPO Rolando D — Sat, 30 Apr 2016 12:36:47 -0400

Buy the lowest priced home you can afford in the best neighborhood. Why? If the neighborhood is desirable, you won't have a problem renting it out, whether you move due to PCS or moving up to a bigger house. I have used this method for years. Home prices appreciate differently and may be taxed differently depending on your location. As an example, I live in a desirable neighborhood in San Diego where houses next street from me pay thousands more in taxes every year (mello roos), because I live in a different zip code. The rating and quality of the schools is a factor you need to consider as this helps maintain value and desirability. Easy access to hospitals and freeways is another factor. Avoid homes surrounded by rental properties as this can affect value and constantly bring strangers into your neighborhood.

Response by SFC Pete Kain made Apr 30 at 2016 12:44 PM

SFC Pete Kain — Sat, 30 Apr 2016 12:44:13 -0400

Make sure your Real Estate Agent is single and HOT! That and if you need upgrades get an estimate then double it. Problems will arise.

Response by Sgt Leonida Curtessi made Apr 30 at 2016 5:05 PM

Sgt Leonida Curtessi — Sat, 30 Apr 2016 17:05:28 -0400

What about business loan?

Response by TSgt Private RallyPoint Member made Jun 9 at 2016 1:15 PM

TSgt Private RallyPoint Member — Thu, 09 Jun 2016 13:15:30 -0400

Contact Half Priced Real Estate. http://www.halfpriced.com

HALFPRICED.COM | The Smartest Way to Buy or Sell your Home

Response by 1LT Private RallyPoint Member made Jul 5 at 2016 6:37 AM

1LT Private RallyPoint Member — Tue, 05 Jul 2016 06:37:51 -0400

Capt Brandon Charters -

GET AN ENTIRELY INDEPENDENT AND THOROUGH INSPECTION BY A PROFESSIONAL GENERAL CONTRACTOR WHO WILL DO FAR MORE TO CHECK OUT THE STRUCTURE, FITTINGS, AND UTILITIES THAN THE COMMON ONE HOUR SUPERFICIAL INSPECTION ( use the results to negotiate owner repairs, warranties, and closing price).

KNOW YOUR TOTAL MONTHLY AND ANNUAL PAYMENT AND ESCROW SCHEDULE INCLUDING PROPERTY TAXES, SPECIAL ASSESSMENTS, HIMEOWNER FEES, AND UTILITIES ( WHICH WILL OFTEN SUBSTANTIALLY INCREASE WELL BEYOND CURRENT TAXES ETC DUE TO INCREASE IN PROPERTY VALUE ASSESSMENT AND LOSS OF PREVIOUS OWNER BASIS ).

CAREFULLY CONSIDER THE LOCATION AND VALUE OF THE LAND ( far more so in terms of valuing your offer ), KNOW THE SPECIAL RISKS ( flood plain, tsunami, earth quake, tornado, wildfires ) AND KNOW THE EXTENT TO WHICH INSURANCE WILL COVER THESE RISKS.

CONSIDER ACCESS TO HIGH QUALITY PUBLIC AND/OR PRIVATE ELEMENTARY, JUNIOR HIGH, HIGH SCHOOLS, AND STATE SUBSIDIZED COLLEGES AND UNIVERSITIES. CONSIDER LIKE MINDED SOCIALLY AND COMMUNITY ORIENTED NEIGHBORS. CHECK OUT THE CRIME STATISTICS AND VISIT THE PROPERTY AND SURROUNDING COMMUNITY DURING THE DAY, EVENING, AND NIGHT HOURS TO BE AWARD OF PUBLIC NUISANCES ( unsafe activities ).

KNOW YOUR ZONING AND PLANNING COMMISSION RULES AND HISTORY. KNOW YOUR HOMEOWNER'S ASSOCIATION RULES ( CC&R'S ) AND ENFORCEMENT HISTORY. CHECK OUT THE CONSISTENCY OF CONSTRUCTION AND FEATURES OF NEIGHBORING HOMES ( are homes consistent in size, maintenance, and character -or- is the neighborhood changing in ways that may improve or detract from the value of your property ).

ASSUME THE SELLER MAY WELL BE LYING ( even if this is your best friend / brother in law ).

Response by CAPT Hiram Patterson made Jul 7 at 2016 1:12 PM

CAPT Hiram Patterson — Thu, 07 Jul 2016 13:12:55 -0400

Don't buy what you can't afford.

Response by MAJ Michael Pauling made Jul 14 at 2016 3:05 PM

MAJ Michael Pauling — Thu, 14 Jul 2016 15:05:47 -0400

use USAA Realty Services (especially if you use them as teh Bank where your acquire your Mortgage). The program is very encompassing and you get a cash back rward from using them. I got about $1000 when I sold a home we owed through them.

Response by SrA Troy Barber made Jul 15 at 2016 12:08 PM

SrA Troy Barber — Fri, 15 Jul 2016 12:08:04 -0400

Goes back to what I said earlier. Get a Buyer's Agent, they work for you and make sure everything is up to par. Mine got the price dropped and a home warranty.

Response by Capt Brandon Charters made Jul 22 at 2016 3:38 PM

Capt Brandon Charters — Fri, 22 Jul 2016 15:38:09 -0400

I wanted to thank everyone on this thread for the terrific advice. I just closed on a new home (moving this weekend) and couldn't be more excited to start the next chapter of life with my better half.

Response by SGM Mikel Dawson made Jul 22 at 2016 8:03 PM

SGM Mikel Dawson — Fri, 22 Jul 2016 20:03:18 -0400

Don't stretch your finances so thin to make the down payment and then the monthly payments after. If you're getting so tight, it's not good. Remember Murphy is always there. If possible have a little put aside for unexpected things which always come up.

Response by Sgt William Kelley made Oct 31 at 2016 4:04 PM

Sgt William Kelley — Mon, 31 Oct 2016 16:04:37 -0400

1) Find and work with individuals that are competent and that you trust. (Realtor, Loan Officer, Attorney, Inspector)

2) Find a loan officer early! - Discus your finances well before you actually intend on buying a home. Ask your loan officer for tips on how to be best prepared when the time comes to buy. Learn what products and loan options are the best for you and your situation. Any loan officer that is competent and trustworthy should be willing to take the time to do this with you. -- Don't forget to discus 5)

3) Your purchase is an investment, take the time to educate yourself on the market you are in. - Go to open houses and meet the different realtors in your area. Find a real estate agent that is educated on the market and trustworthy before you commit to working with anyone. -- Don't forget to discus 5)

4) Take the time to figure out what you need and want in a home; make a list. - Really think about what is a good home for you and why. Make a list of things that would be ideal and things that are absolutely necessary to your comfort.

5) Make decisions with the future in mind. - A lot of variables come into play when you start thinking about the future and your finances, especially when you are an active duty military member. This is something you should discus with your loan officer (future borrowing) and realtor (resale-ability?). Work with people that have been in your shoes or have experience with military/ veteran populations, this will go a long way when it comes time to making decisions.

Response by A1C James Cain made Aug 3 at 2019 10:17 AM

A1C James Cain — Sat, 03 Aug 2019 10:17:31 -0400

Location, location, location. When considering buying a home, go there at different times of the day. See what the traffic is like during rush hour.

Drive around the neighborhood see what it is like during the day and after

Buy the worse house in the best neighborhood, if you plan to remodel, this will give you the best return on your resale.

Response by LT Scott O'Shaughnessy, MBA made Aug 5 at 2019 10:09 AM

LT Scott O'Shaughnessy, MBA — Mon, 05 Aug 2019 10:09:29 -0400

If you are single or just you and the spouse, look into a duplex, triplex or 4-plex. Your VA certificate is valid for up to a 4-plex, they are still financed as a single family residence. This way you can start building some long term wealth. Then in a year or two if the family grows, you can move into a house and still have that asset

Response by CMSgt Tammy Gordon - Realtor made Aug 15 at 2019 11:56 AM

CMSgt Tammy Gordon - Realtor — Thu, 15 Aug 2019 11:56:37 -0400

Do your homework to find the best Lender & Real Estate Agent that has experience with VA Home Buying process long before you start looking for homes. Unfortunately many times Buyers get so excited about a home they see online and click "More Info" and end up missing out on many great benefits they have earned. This is the biggest financial decision most people ever make so they need to take their time and become prepared and knowledgeable about the process.

Response by CPT Steven Cunningham made Mar 18 at 2021 11:14 AM

CPT Steven Cunningham — Thu, 18 Mar 2021 11:14:36 -0400

Best advice. Hire a good inspector.

Response by MAJ A. Sam Gerber made Oct 18 at 2021 5:02 PM

MAJ A. Sam Gerber — Mon, 18 Oct 2021 17:02:58 -0400

Hire a good real estate buying agent. It does not cost you anything. Beware that not all RE agents are the same. I can give you advice. I am holding a real estate license in Georgia.

Response by SPC Kieran Jackson made Mar 1 at 2022 1:24 PM

SPC Kieran Jackson — Tue, 01 Mar 2022 13:24:38 -0500

Try not to make any big purchases several months before purchasing a house. Such as buying a car. Keep your financial olbigations (loan debt to income ratio) as low as possible.

Research all of the programs that may be available to 1st time buyers in the market you want to purchase in.

Find an agent AND lender that are knowledgeable with the VA process.

I had a Veteran I was working with a few years ago. The lender had written the pre-approval, and we were working to close the escrow. This particular client was renting in Los Angeles (an expensive market) and was purchasing in one of the bordering cities where the cost of living is significantly lower. At the last minute, the lender decided the Veteran didn't make enough income to be able to make the payments. The payment would have been slightly higher than the rent the Veteran was accustom to paying. However, the other cost of living expenses would have been considerably lower in the area they were purchasing in. There is a stipulation for VA loans where they allow that to be a consideration. Also, the Veteran was making the purchase in a development that did have an HOA. The VA appraisal was done. We were at the very end of the process, and the lender cancelled the loan, saying the development wasn't approved for VA lending. This was false. The appraiser said, verbatim, "VA doesn't schedule appraisals in developments that are not approved." It was challenging, but we were able to save the deal at the last minute by bringing in a new lender that DID accept the stipulation that while the mortgage payment was higher, groceries, utilities, fuel, insurance etc was all lower in the Veteran's new neighborhood. Proving that the development was actually VA approved, was very challenging. I didn't give up, and eventually found a communication path with the VA where they were able to confirm the development was approved. It was very challenging. I'm certain, a real estate agent with no knowledge of the VA process would not have been able to get this escrow to close.

I hope this information helps.

Hoorah!

Response by LTC Private RallyPoint Member made Mar 2 at 2022 6:47 PM

LTC Private RallyPoint Member — Wed, 02 Mar 2022 18:47:32 -0500

Find the right agent whom you can trust