The importance of home ownership can’t be overstated, especially today when at the heart of the American Dream home ownership still reigns supreme. This is oftentimes especially true within the military community, as veterans still own homes at a greater rate than that of their civilian counterparts. Owning a home can be a great way to build equity and secure a future for your family, but with owning a home comes the need to practice responsible home ownership.
Owning a home is a significant financial responsibility and in most cases the single biggest financial responsibility you will ever have. We all want to own a home, but it is important for potential homebuyers to take a serious look at whether or not they are ready for the financial responsibility of home ownership.
The VA program is a great way to buy a home today, if you indeed are a veteran and have access to this program. The program does a great job ensuring that veterans can indeed afford the homes they are purchasing. Statistically speaking the VA loan program has had the lowest foreclosure rate of any mortgage on the market for nearly all of the last decade…. and counting.
Still though, there are no guarantees with the VA loan program. Changes occur over time, people lose jobs, family emergencies happen, health bills can pile up… yet the mortgage still needs to be paid. If you are thinking about getting started with the VA loan process here are a few things to consider:
- Your monthly mortgage payment will typically cover your principal and interest on the loan, along with a portion of your annual property tax and homeowners insurance bills. Use the mortgage calculator on this site to get a rough idea.
- The principal and interest portions won’t change on a fixed-rate mortgage.
- Property taxes and homeowners insurance premiums CAN adjust annually.
- You are responsible for regular maintenance and unexpected repairs, the VA loan does not cover this.
- Homeowners will often budget at or about 1 percent of their home’s value each year for maintenance and repair costs. This is a nice safe number to use and will generally keep you covered. That would be $3,000 on a $300,000 home.
Default Does Happen
Yes, default does happen, even in the VA program. Despite the incredible track record of the VA loan program some home owners do default on their loans. Just keep in mind that things like late payments, loan modifications and foreclosure can really hurt your credit score and have a serious long-term impact on your financial profile.
Because of those potential issues, as well as others mentioned above, it is very important to make sure you have a plan in place and are ready to practice responsible home ownership. The VA loan program has an amazing track record and has put veterans in homes across America. Use it to your advantage to find the home of your dreams, but always practice responsible home ownership.