JOINT BASE SAN ANTONIO–LACKLAND, Texas —
For some, a part of the American dream means owning a home.
When making that jump from renter to homeowner, there are some factors to consider, especially for a first-time homebuyer.
“I’ve been brought up thinking I should have my money doing something for me,” said Rayjan Espinosa Tamo, 90th Cyber Operations Squadron computer programmer.
Tamo is a client at the Military and Family Readiness Center at Joint Base San Antonio-Lackalnd. He is currently renting a room, but decided to explore whether buying a home would fit his financial lifestyle.
The M&FRC counselors outlined some factors to consider:
Pros of renting:
- No financial obligation for maintenance
- Easier to move out due to short-term rental lease options
- Resident is not responsible for selling home
Pros of home owning:
- Building home equity
- Tax breaks
- Being able to make property changes
- Pride of ownership
Buying a home will likely be one of the largest financial decisions someone will make and being in good financial standing is important, said Kevin Keith, 802nd Force Support Squadron personal finance manager.
“Your credit score is going to determine your interest rate,” Keith said. “You want to give yourself the best shot possible and if there’s some stuff on your credit report that can be fixed, it will give you a better credit score and lower your interest rate.”
Some other things to consider is whether a potential homeowner has enough income to support a house payment, if they choose that option, Keith said.
House payments are made up of mortgage, property insurance and property taxes, as well as possible homeowner association fees. If a potential homebuyer can’t meet the basics, they would be “house poor.” The term means homeowners have so much money tied up in the home, they have little left for other expenses, which could cause further financial hardship.
Making a list of your financial debts is important, Keith said.
“From the beginning my main question was ‘how would I know how much of a house I could afford?’” Tamo said.
For those who don’t have the basics in order, Keith urges potential buyers to be patient, because they’ll save money in the long run.
“They can probably get a mortgage, but they’ll end up paying at least half a point of interest, which is an enormous amount on their monthly bill for no reason,” Keith said.
There are other considerations to take into account before any money is spent.
Because some military assignments are temporary, Keith urges potential homeowners consider whether investing time and money in a home is right for them if they’re continuously moving.
“You may have to rent it out and be the landlord if you leave,” Keith said.
When the purchasing process begins, Keith recommends buyers surround themselves with qualified lenders, real estate agents and people they trust.
“If you’re making the most expensive purchase of your life and you’re not getting advice from people you trust, you’re probably going to make a mistake,” Keith said.
For now, Tamo said he’ll continue to prepare his finances for that eventual step of home ownership.
“I feel like I’m still at a place where I’m better off renting and building up my credit, but I have more information now so that I can do more efficient research,” Tamo said. “It’s that full step towards the stability, house and family thing; that image of success.”
For assistance regarding home renting or buying options, call 210-671-3722.