Part of the American dream is to own your own home. For military families, however, this is something not always possible.
The migratory nature of the military lifestyle often means it’s impractical to commit to any one specific location. For families where this is less of an issue, the temptation to make roots can be strong. Furthermore, it can be made easier with the government’s help.
One of the perks afforded to military families comes in the shape of a housing allowance. This is designed to cover at least part of the cost of your monthly rent or mortgage payments and is a tax-free earning.
There are also additional tax concessions offered to military families to help get you onto the first rung of the property ladder. These involve interest-free mortgage deals and loans such as the Veterans Affairs Loan Program which has existed since 1944.
All of these initiatives are designed with the intention of making the house-buying process easier. But how can you tell whether buying is the right option for your family?
The Tipping Point
Due to the costs incurred through solicitor fees, insurance expenses, and other closing fees, there are more financial aspects to consider than simply the price of the house. This means you should plan to keep that house for a minimum of 5-6 years to absorb these costs into the overall price, thus making it cost-efficient.
One way to work around this can be to rent out the property, treating it more as an investment than a traditional family home.
For an active member of the armed forces, there’s also a protection scheme designed to help safeguard investments at times of deployment. The Servicemembers Civil Relief Act (SCRA) can provide great help in avoiding foreclosures for anyone struggling to keep up their scheduled repayments.
When anyone buys their first home, there are several trappings which need to be avoided. More specifically for military personnel, checking you Basic Allowance for Housing (BAH) payments details is a must.
Because they are location dependent, a move into a different neighborhood could see the amount you receive differ, therefore, impacting on your budgeting plans.
If you choose to leave the forces, this too will end many of the benefits you were previously entitled to. This will effectively mean a likely increase in the costs you face with your monthly bills.
Because everyone’s situation is unique to them, there is no one specific answer which can be given to this overarching question. Where buying a house may be the right move for some military families, it could be the exact opposite for someone else in a seemingly similar situation.
This leaves the military’s biggest advantage something which every military family should take advantage of. Within the base community-service office, there will be a personal financial manager who can assess your circumstances. They can provide free expert advice which can also introduce you to options you have maybe not considered or been aware of.