Should I use my VA loan if I'll be at my current duty station for the next four years?

SPC Private RallyPoint Member — Thu, 31 Mar 2016 11:44:52 -0400

Response by 1SG Private RallyPoint Member made Mar 31 at 2016 11:50 AM

1SG Private RallyPoint Member — Thu, 31 Mar 2016 11:50:03 -0400

Unless you are going to convert the house into rental property when you PCS, I'd advise waiting until you get closer to the end of your career.

Response by SFC Private RallyPoint Member made Mar 31 at 2016 11:50 AM

SFC Private RallyPoint Member — Thu, 31 Mar 2016 11:50:21 -0400

I would. The VA loan saves you the cost of down payment on a house, as well as the cost of Peivate Mortgage Insurance which can get expensive. I'm using it a second time right now on a house I close on in 4 days at my new duty station. I won't be there for another month, but already having the house secured and not having a payment for 60 days on the house is nice. Always be sure to close after the first of the month if you want to not have a payment on the house for close to 60 days. It helps you to save some money, and if structured correctly, your prepaid insurance and taxes can be paid by the seller. Do your research before any real estate deal, and use a good realtor and mortgage broker familiar with VA loans! Good luck!

Response by 1SG Private RallyPoint Member made Mar 31 at 2016 11:55 AM

1SG Private RallyPoint Member — Thu, 31 Mar 2016 11:55:05 -0400

Depending on where you are stationed a rental property can be more costly than purchasing a home. For example for decent places near Fort Riley for rent can exceed 1500 a month and you pay utilities. But you can purchase a house and have a mortgage for about 800 a month. The downside of buying is that you honestly do not know how long you will be at a duty station. It could be 2 years or it could be 7 years just depends on your MOS and the needs elsewhere. So if you are found having to PCS early you run into the issue of rushing to try and sell or finding a renter to move in while you are gone. (And renting your property brings up another whole list of things to worry about) Where if you are renting it only takes a copy of your PCS orders and you can break almost any lease or rental agreement. Another thing you need to think about is maintenance. If you purchase your house then you are responsible for any damages or repairs that are needed. If you rent then all you have to do is call the owner and they are liable to fix anything that goes wrong. Owning a home is a great experience but you need to make sure that you are fully prepared for all the hidden costs that come with it.

Response by Sgt Aaron Kennedy, MS made Mar 31 at 2016 1:06 PM

Sgt Aaron Kennedy, MS — Thu, 31 Mar 2016 13:06:35 -0400

"If" you can get a $0.00 down loan without using the VA loan backing, use that instead. Remember that. Remember the VA funding fee is "progressive" (it's bigger the second time you use it, and chances are your second how will be more expensive as well).

The VA loan guarantee is a great tool, but it's not your only tool, so look at your options.

Response by SPC Private RallyPoint Member made Mar 31 at 2016 1:17 PM

SPC Private RallyPoint Member — Thu, 31 Mar 2016 13:17:26 -0400

Yes and no.

Yes if you shop for the right home and buy something affordable that you can reasonably pay off in time. I just bought a home. Lovely 3bd/2bath in this area for about 55. A bit of elbow grease into it and it's fantastic place to live. My monthly payments are low so I about triple pay my principle.

If you are not good with your money, repayments, investing, or if your attempting to buy some outrageous home... I'd say don't use it yet and just live on post. Defaulting a mortgage will wreck you financially.

If you need more info shoot me a PM here and I can walk you through what to expect, look for, etc.

Response by SSgt Maurice Johnson made Mar 31 at 2016 2:48 PM

SSgt Maurice Johnson — Thu, 31 Mar 2016 14:48:31 -0400

Typically one would purchase a home if they are going to be at a location for 3-5 years, there is potential for the property to appreciate in value, the property can be converted to income property if one was to be stationed elsewhere. The question is do you want to be tied to a property in an area of the country that may or may not hold any long term or short interest to you as becoming a gain in asset value, and liability. If your only getting about a 30% positive response on these questions I would say hold on exercising my VA loan and exercising, a purchase of an attractively priced rental.

Response by CAPT Kevin B. made Mar 31 at 2016 6:52 PM

CAPT Kevin B. — Thu, 31 Mar 2016 18:52:35 -0400

Also work the long game into the equation. Say down the road you want to have a more permanent home and need the VA to do it. If you have refinanced the first unit away from VA (happens when the rates drop), you're good to go knowing there's a occupation requirement. If you need to sell the old place with a VA loan to make the new buy, you're on a contingent purchase which can have hiccups if the sale market in the old location stinks. You can only have one VA thing going at a time so make sure you manage for the long term.

Response by SGT Kristin Wiley made Apr 1 at 2016 1:08 AM

SGT Kristin Wiley — Fri, 01 Apr 2016 01:08:33 -0400

Think of it as an investment, do you want to spend four years paying rent to someone else? Or do you want to spend four years paying off something you will eventually own? I like the freedom of having my own house. You can also reuse your VA loan. Just beware of Homeowner's associations preventing you form making modifications or having unseemly hobbies in the front lawn.

Response by MAJ Private RallyPoint Member made Apr 1 at 2016 8:54 PM

MAJ Private RallyPoint Member — Fri, 01 Apr 2016 20:54:20 -0400

VA Home Loan or not, you need to consider all of the things that a regular home buyer would consider and then some. What is the history of the property value in that area? Economic outlooks for that area? Are you buying this particular home because IT is a good home to invest in or because you are capable of buying it? If you PCS in 4 years, do you want to rent it out or sell it? You cant necessarily expect some big return just because "everyone" says it is better to own than rent. Have you ever looked at an amortization schedule for a home loan? You are mostly paying off interest (definitely in that 4 year time frame). I don't know where you will be stationed, but it may be wiser to buy later in your career when you are in an area where you can purchase in a more solid investment area? I waited until I was 40 to purchase in Alexandria, VA. It was the a great move for me. There is a lot to think about. It may be wise to pump as much money into a traditional and roth ira until the time is right to buy a place..there is a lot to consider.