If your military retirement date is coming up, congratulations, and thank you for your service! You are likely thinking about settling down and using your VA benefits to buy your “forever” home. However, you may have some questions about the process. This article will look at how to overcome some of the common challenges, tips on buying after military retirement, the perks of a VA loan, and how to get started on the road to your new home.
Tips for Buying a Home After Military Retirement
If you’re planning to purchase a home for your next chapter, here are some tips that will make the process easier.
Evaluate your financial situation.
Before you go house hunting, it’s essential to determine if you’re financially ready to buy a home. For example, if you want to get a VA loan, you’ll typically need a credit score of at least 620 and a debt-to-income ratio of 41% or less. And, although you won’t have to make a down payment, you’ll need enough savings to cover closing costs.
Consider your financial transition before moving forward with a home purchase. If you’re in the process of changing career paths or searching for a new job, it’s wise to wait until you can show at least 6-months of employment history in the new position and proof of income stability.
Give yourself time to get settled.
It may take some time to decide where you want to live after retiring from the military. You will likely need to relocate for a new job, to be closer to family, or to live in a location that you desire. Before you commit to a mortgage, be sure that you plan to stay in that location long enough to plant your roots.
Getting pre-approved before you go house shopping will help you understand the rates and terms you can get. It also puts you in a position where you can make an offer as soon as you find your perfect house. This can be an advantage in a competitive housing market.
Find a knowledgeable real estate agent.
Finding a real estate agent who works with military families can make the home buying process go much more smoothly, especially if you plan on using a VA loan. They’ll be able to help you find a property that meets the VA’s appraisal guidelines, help you in the negotiation process to protect your interests, and answer any questions you have along the way.
Using a VA loan to buy a home after military retirement
Your VA loan entitlement is a lifetime benefit, so you can use it to purchase a home even after you’ve retired from the military. VA loans have many advantages, including no down payment requirement or private mortgage insurance, which makes them an attractive option.
Using your VA Loan for the second time
At this point in your career, it’s likely that you’ve already used your VA loan benefit. If so, you’ll need to determine how much entitlement you have to use for this purchase. Check out this blog post to learn more about using a VA loan more than once.
Get familiar with VA occupancy rules.
It’s also important to keep VA occupancy rules in mind. Typically, VA occupancy rules require the borrower to occupy the residence within 60 days after closing. This can get tricky if you begin shopping before you’re officially separated from the military. If you’re on deployment or stationed in an area outside of your next home’s location, you may not be able to occupy the residence right away. There are exceptions to this rule. For instance, your spouse can occupy the residence while you are away.
How long will I need to wait to buy a home after military retirement?
You may be wondering if you will be able to qualify right away or if you will have to wait. The good news is that, in many cases, you can use your pending military retirement income before you begin receiving it.
We can use pending retirement benefits as qualifying income with proof of your rate of pay along with a signed statement from your commanding officer. If you are earning a full-time income, you will qualify based on the lesser of your pending retirement income and your current income. Feel free to contact us to talk about your situation.
The bottom line
Navigating the home buying process after retiring from the military can be a challenge. But don’t worry, we’re here to help guide you and answer any questions you may have along the way. Give us a call or start your online application today!
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