Hi there! Welcome to the Veteran resources page, and thank you for your service! I hope that you find the information on this page valuable and provide you with great insights and assistance as you begin your quest to find your new home! If I can be of any assistance to you, contact me and I will be happy to help you in any way that I can. Good Luck!
We can all acknowledge that buying a home can be stressful; but it doesn't have to be. Whether you're PCS'ing, ready to move out of military housing, or just tired of renting, receive expert advice and assistance from your trusted real estate professional!
When I purchased my first home as a military veteran, I didn't know what to expect...I asked myself was it worth the effort to buy a home knowing I would be relocating in 3 or 4 years. If you're reading this you may have wondered the same thing. I can tell you now that the answer is absolutely yes! What I have learned over the years is that there are many benefits of home ownership for veterans. Here are 10 reasons why veterans should purchase a home:
1. Payment stability: As a homeowner, you don't have to worry about increased rent prices. With a fixed-rate mortgage, your principle and interest payment will never change over the life of the loan.
2. Home equity: Unlike renting, you own a little more of your home with each payment you make. That ownership stake is known as equity. Over time, that equity can be leveraged by borrowing against it to make a large purchase, or making a profit when it comes time to sell.
3. No money down: Va direct and VA-backed Veterans home loans can help Veterans, service members, and their survivors buy or build a home. VA home loans make it easier for service members to become home owners. Veterans, service members, or their survivors can use VA loans to purchase a home with no money down! The no-money down guarantee makes loans terms more favorable than other mortgage loans. Veterans and service members can buy or build a home with less money needed for closing costs and a lower down payment!
4. Basic allowance for housing: Basic allowance for housing (BAH) is an allowance to offset the cost of housing for active duty service members when you do not receive government-provided housing. Your BAH depends upon your location, pay grade, and whether you have dependents. BAH rates are set by surveying the cost of rental properties in each location. Therefore, BAH rates in high-cost areas will be much greater than those in low-cost areas. BAH is a non-taxable stipend that allows service members to keep up with housing costs. Let the government pay your mortgage for you and take advantage of your BAH and buy your new Texas home! Check your BAH rate!
5. Limits on fees and closing costs: All mortgage loans come with fees and closing costs. However, the VA limits what Veterans can be charged when it comes to these expenses. Some costs and fees must be covered by other parties in the transaction. This helps make homeownership more affordable for Veterans. VA borrowers can also ask the seller to pay all of their loan-related closing costs up to 4% on concessions, which can cover expenses like prepaid taxes and insurance that'll show up on the settlement statements like the ALTA settlement statement, closing disclosure, HUD-1 statement, or the loan estimate. There's no guarantee the seller will agree to the request, but Veterans can certainly ask during the negotiation process. In addition, you can often get the seller to pay for title insurance costs which can be computed using this free Texas title insurance calculator.
6. Lifetime benefit: One of the most common misconceptions about the VA home loan program is that it's a one-time benefit. In fact, those who've earned it can use this program repeatedly during their lifetime! And yes, despite what you've heard, it's possible to have more than one VA loan at the same time. If you have any questions about your VA loan entitlement, contact me and I will put you in touch with a VA-certified lender!
7. No private mortgage insurance: Private mortgage insurance, also called PMI, is a type of mortgage insurance that you will be required to pay on a conventional loan where you put a down payment of less than 20% of the home's purchase price. For example, that means you will have to pay a down payment of $40,000 on a $200,000 home loan to avoid PMI payments. Home owners can request that PMI be eliminated once the loan-to-value (LTV) ratio drops below 80%. The lender must automatically can PMI when the LTV falls to 78%, provided the borrower is current on monthly payments. This happens when the down payment and principle payments equal 22% of the home's purchase price. Similar to conventional loans, FHA loans don't require PMI, but they do require an upfront mortgage insurance premium (MIP) and a monthly MIP payment to be paid instead. Depending on the terms and conditions of your loan, most FHA loans will require MIP for either 11 years or the lifetime of the loan. There are no insurance premiums with VA home loans, which drastically reduces the monthly mortgage payment for Veterans.
8. Property tax exemptions: Did you know that Veterans in the state of Texas receive property tax exemptions based on their disability rating? Texas Veterans with a disability rating between 10% and 100% may qualify for property tax exemptions starting at $5,000 for 10% - 29% disability and ending at a full exemption for those VA-rated as 100% disabled. Those over the age of 65 may also qualify for additional property tax exemption programs. Click to learn more!
9. Tax advantages: You may be able to receive a tax deduction on your property taxes, mortgage insurance and interest paid on the home loan. To determine the best tax benefits associated with homeownership, it's best to consult with a tax professional.
10. Capital gains tax exemption: Sales of property are treated in the same manner as any other property held for investment. If you sell property, then any profit you make on top of what you paid for the property is treated as capital gain, unless an exemption applies. How that gain gets taxed depends on how long you've owned the property. If you have owned the property for a year or less, then short-term capital gain treatment would apply. If you've held the property for more than one year, then any profit will be a long-term capital gain. One of the most common exemptions from capital gains involves personal residences. If you meet the requirements, you're allowed to make up to $250,000 for single taxpayers or $500,000 for joint filers on the sale of your home and not have to pay any capital gains tax on the sale. Consult with a tax professional to determine if you are eligible for the capital gains tax exclusion.
Simply put, homeownership is a great financial investment for veterans, active duty service members and their families!