Many millennial and Gen Z consumers are putting off buying a home right now. Housing prices have gone up and saving up for the big down payment to purchase your first home takes time, so for many, buying a home can seem out of reach right now.
While there are a lot of factors to consider, for young military members and veterans, owning a home may be more achievable than you think. There are a number of specific resources and offers available to help you purchase your first home, so here is where to start to become a young veteran home owner.
Determine How Much You Can Afford
One of the most important considerations in beginning your home buying search is understanding how much you can afford. A general rule of thumb is that a military family can afford to purchase a home up to 3 times their annual household income. Also consider how much you receive for your BHA and where you’re looking to buy. Depending on the city, your BHA may cover more of a mortgage payment.
To get a more detailed idea of what you can afford with your military salary, you can start by getting prequalified for a mortgage. Doing so is a quick and easy way to see how much you may be able to borrow, and there are many lenders that specialize in these offerings.
Young Veteran Home Owner: Take Advantage of a No-Down-Payment Loan
In response to the increasing costs of homes across the U.S., veterans no longer have a price cap on a zero-down home loan with Blue Water Navy Vietnam Veterans Act of 2019 – which can be especially helpful for younger homebuyers.
Under the program, qualifying veterans with sufficient income and credit can receive a no-down-payment loan when buying a home. VA loans are zero-down mortgage options from private lenders and backed by the Department of Veterans Affairs. In order to be eligible to qualify for a VA loan, you must meet one of the following requirements:
▪ have served 90 consecutive days of active service during wartime
▪ have served 181 days of active service during peacetime
▪ have served six years in the National Guard or reserves
▪ are the spouse of a service member who died in the line of duty or a service-connected disability
Since there is no longer a limit on much a young veteran homeowner can borrow, VA loan a great resource to take advantage of for those who qualify.
Anticipate Closing Costs
Understanding closing costs and anticipating them up front can help you keep more money in your pocket after closing on a home. Closing costs are the final fees paid during the closing of a real estate transaction.
Your actual closing costs depend on a number of factors, but a young veteran home owner should expect their closing costs to range from 3-5% of the final cost of their home.
A Trusted Real Estate Agent Who Knows Military Needs
Buying a home can seem very stressful for anyone, but can feel especially demanding for many young military members and veterans, so working with a trusted guide will help. According to new research from Realogy and PCS Grades, 97%* of active-duty service members and their spouses say it is important to work with real estate professionals who have expertise working with active-duty military and their families.
The Realogy Military Rewards program can assist you with the entire home buying experience and was created specifically to help support military members of all kinds. You’ll get the opportunity to work with an experienced real estate agent familiar with the unique military homebuyer’s needs who can guide you through every step of the way, as well as $350-$7,500 in cash back after closing, and local community insights from military and veteran families at PCSgrades.
The Realogy Military Rewards program is ready to help you become a homeowner – no matter your age or rank. When you’re ready to get started on your home buying journey, please call 1-800-752-3642 to speak with a Realogy Military Rewards Advocate, or visit Realogy Military Rewards today and hit “Sign Up”.
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* The survey was conducted by Wakefield Research on behalf of Realogy and PCSgrades among 250 U.S. active-duty service members and 250 spouses of active-duty service members, between February 25th and March 3rd, 2021, using an email invitation and an online survey.