Military Homebuying Tips: Agents, Taxes, and VA Loans

military couple in front of home, military homebuying tips

For military families, buying a home can be both exciting and frustrating. PCS moves can make the homebuying process a challenge, since you don’t always have a flexible schedule. However, with the right information and a strategic approach, service members can turn the challenge of buying a home into a rewarding experience. The military homebuying tips here will help you get started.  

Questions Military Families Should Ask a Real Estate Agent 

The first part of any military homebuying journey is finding the right real estate agent. When moving to a new area, military families might not know anyone to recommend a professional agent. If you speak with multiple agents, ask these questions to make sure it’s a good fit. 

Do you understand military-specific needs? It’s crucial to find someone familiar with the unique needs of military families. Ask if they have experience working with service members and if they understand the challenges associated with PCS moves. They should be comfortable with the VA loan process, and possibly communicating from a distance during your home search.  

Are you familiar with military PCS moves? A family with PCS orders often has a strict timeline to move and limited options for house-hunting. Moving frequently affects the equity you’ll be able to build in the home over a short period of time, and it can be difficult to sell a house quickly when you need to move again. Discuss options for contingencies or early exit clauses in case of unexpected changes in orders.  

Which towns do you serve near the military installation? For military families, the distance to base is a key part of the home-buying process. In some cases, popular communities are in different counties on opposite sides of the base! Ask the real estate agent about neighborhoods they recommend near the military installation, considering commute times through the gate, school districts, and amenities. 

Military Homebuying Tips About Taxes 

Military homebuyers can enjoy several tax benefits after buying a home. It’s important to understand how these will impact your mortgage payments or your household budget.  

Military homeowners tax benefits: You may be able to claim several homeowner deductions on your taxes next year, such as mortgage interest, property taxes, and certain home improvements. It makes those expensive home repairs a little easier to bear. 

Capital gains exclusion: The IRS allows a capital gains exclusion for homeowners who have lived in their primary residence for at least two of the past five years. This rule is particularly important for military families facing frequent relocations. 

Tax implications of renting out a home: For military families who own property but are temporarily stationed elsewhere, renting out their home is a common option. Be aware of the tax implications of rental income and potential deductions for expenses related to property management. Also, you cannot use a VA loan to fund a property that will be rented out first. It must be for your primary residence. 

VA Loan Benefits for Military Families 

Military homebuyers have the unique option to choose between using a VA loan or a conventional loan for their mortgage. One option is not automatically always a better choice, so discuss the differences with your real estate agent. Here are essential military homebuying tips about the VA loan. 

No down payment required: One of the most significant advantages of the VA loan is the ability to purchase a home with no down payment. You should still expect other closing fees, but this can make homeownership more accessible for military families. 

Competitive interest rates: VA loans often come with lower interest rates, saving military families money over the life of the loan. A smaller monthly payment on the mortgage can be a significant financial benefit. 

No Private Mortgage Insurance (PMI): Unlike conventional loans, VA loans do not require private mortgage insurance (PMI) because they are backed by the VA. This further reduces your monthly mortgage payments, freeing up your budget. 

Flexible credit requirements: An imperfect credit score doesn’t need to stop you from home ownership. (Don’t know your credit score? Check it for free here!) The VA loan program tends to have more lenient credit requirements compared to conventional loans. This flexibility can be beneficial for military families with unique financial situations due to deployments or other factors. 

Navigating the homebuying process as a military family requires careful consideration. By asking the right questions when selecting a real estate agent, understanding the tax implications of homeownership, and leveraging the benefits of the VA loan program, service members can feel confident they’re making the best decision.  

GoVA wants to empower military homebuyers with free financial tools to help them understand credit scores, interest rates, tax implications, and so much more! Our digital membership platform, The Edge, offers hundreds of interactive and informative articles, quizzes, calculators, or courses. We make membership free to service members, Veterans, and their spouses through scholarships from our donors. Register for The Edge for free today, and take the first step towards military homeownership.  

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About Our Partnership with TowneBank Mortgage

At GoVA, we’re proud to partner with a lender that delivers peace of mind to those who have served and continue to serve our county. Together, GoVA and TowneBank Mortgage are committed to helping our military service members achieve their dreams of homeownership, as well as providing them with valuable resources along the way. As experienced lenders, TowneBank Mortgage understands the need for a quick and easy mortgage process, especially during life’s transitional moments. Headquartered in Norfolk, just miles from the world’s largest naval base, TowneBank Mortgage has had the honor of helping thousands of military families through their VA loan offerings. Their team is knowledgeable about VA products and the local market, and in-house operations allow them to respond to questions and concerns in a timely manner. Together, we can get you to closing in 30 days or less. Trust TowneBank Mortgage and GoVA loans to get you home.

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