VA LOAN CAPTAIN BLOG & Learning Center

VA Loan Considerations

By: Grant Moon 09/07/12 03:19 pm

VA Loan Considerations


Homeownership is synonymous with the American Dream for many reasons. It literally allows you to own a piece of our great nation. While there are many benefits associated with homeownership, you should carefully examine your situation prior to committing to this big responsibility. Below are some questions to answer prior to buying a home.


What does your financial picture currently look like?  

Most financial planners suggest that your monthly housing payment should be no more than 1/3 of your gross monthly income. However, in some case those may be able to qualify for a more expensive home that creates a payment that is more than 1/3 of your gross monthly income.  As we have seen in the last housing down turn it is always a good idea to live below your means which means living with less than you can afford.

Having a thorough understanding of what you can afford is critical to understand prior to purchasing a home. You have use a host of Budget Calculators to help you determine what you can afford or speak with a free certified counselor here.

Do you pay more in rent than what it would cost to own?

With the housing downturn in 2008 home affordability increased. If your rent exceeds the cost of owning a home then this may be a good opportunity for you to buy. A simple way to determine this is to get a good faith estimate from a lender which provides an estimate of your monthly payment in owning a home based on the size of the loan that you would take on. Then compare the estimate what you are paying in monthly rent.


How stable is your employment?

Having a good understanding of your employment situation and outlook is a key determining factor of whether you should consider homeownership. Those with temporary or unstable jobs should not risk taking on a mortgage. Also, if your household has two incomes knowing what you can survive on if your spouse or partner were to lose their job should be evaluated.

How long will you live in the home?  

Closing costs and fees to get your home may not be worth it if you only plan on living in your home for less than two years. You should examine your situation and the likelihood of moving any time soon. In some instances owning a home for a short period of time can be risky. Also, it is always important to have a fall back plan for instances renting your home in the event of a sudden move. Knowing the market bearing rents in your area is critical to estimate what you could rent your home in the event of a sudden move.


Through a careful examination of your situation you can determine if homeownership is right for you. While you can never anticipate all of life’s events, the better you understand your situation the more likely you are to make the right decision for you and your family.


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