Putting down roots Even if you’re no longer subject to PCS orders and are ready to put down roots, there still is much to consider when buying a home. Go ahead and see whether you prequalify for a mortgage and at what rate. The upside of the housing bubble burst is lending standards, once again, require sound credit, a solid job history, and a “skin-in-the-game” down payment, which will help pre- vent you from making an ill-advised purchase. (A good portion of foreclosures resulted from financial institutions extending loans to applicants who had no real financial ability to sustain mortgage payments over the long haul.) Declaring home ownership as a symbol of America’s
strength and stability, our political leaders have, for de- cades, been putting their money where their mouths are by creating — or refusing to end — tax breaks like the mortgage-interest deduction, property tax deduction, and capital gains exclusion. Yes, these incentives likely will decrease your tax bill, but with interest rates so low, unless you’re buying an expensive home, you might not see as much of a break as you think. Pull out last year’s tax return, and recalculate it with these deductions to get a ballpark figure of what you’ll be saving. If you’re at the stage in life where your home needs to be closer to the pickleball court than to work, the pur- chase of a retirement home necessitates answering some additional questions. If you’ve taken the right steps in preparing for retirement, you know what your budget al- lows for housing costs. Ask yourself: What do you want your golden years to look like? If puttering around your vegetable garden and grandchildren sleeping over is what you yearn for, then a home of your own might make sense. But if you expect to travel extensively or just prefer a low- maintenance lifestyle, then renting might be more suitable. It’s also smart to think about your further-down-the-
road needs, when health issues might come into play. What if you suddenly have to move out of your home be- cause you require assistance with daily living activities? As with a military move, you risk being on the losing end financially if you must sell your house quickly. Aging in place is an option growing in popularity.
There’s no reason help can’t come to you; numerous agencies cater to the medical and everyday needs of the
elderly. Adapting your home to become more senior- friendly through remodeling and assistive technology certainly is an option. However, consult with a contractor before you purchase a home to make sure your house is conducive to changes within your budget. For example, is there space for a bedroom on the first floor when you no longer want to climb stairs? Continuing-care retirement communities (CCRCs) offer another solution. A home purchased in a CCRC guarantees housing for life. Initially, your home might look like any other, and you’ll have many social activi- ties in the community to choose from. But as your health status changes, you have the option to migrate to assisted living or skilled-nursing care right there on campus. CCRCs offer more than one contract option, and the en- trance fee can be hefty, so financial planning is essential.
Help from the VA Regardless of the option you favor, ask your private lender about the VA home loan program. For service- members, veterans, and eligible surviving spouses, this VA program offers many benefits, such as guaranteeing a portion of a loan or not requiring a down payment, re- sulting in more favorable interest rates. For many, a home is a rite of passage — a sign that
you’ve arrived — and provides intangibles that go beyond the dollars and cents of it. But making sure you’ve cov- ered all the financial bases will let you enjoy your home, sweet home.
MO
— Vera Wilson is a freelance writer from North Carolina. Her last article for Military Officer was “Water Scarcity/Security,” January 2016.
MOAA Home-Buying Resources
If you’re still trying to decide whether or not to purchase a home, you can access additional home-buying articles on MOAA’s blogs (
www.moaa.org/blogs) under the Military Benefits and Military Family Affairs categories. MOAA Premium and Life members also can download MOAA’s Financial Planning Guide at
www.moaa.org/publications.
APRIL 2016 MILITARY OFFICER 63
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