LACKLAND AIR FORCE BASE, Texas –
With gas and other commodities soaring in price, people around the country are struggling to pay their mortgages. Airmen are not immune to the nationwide problem.
According to a recent article featured on Air Force Link, the Department of Veteran's Affairs is working hard to keep veterans and Airmen from foreclosing on their homes. Anthony Davis, a financial advisor at the Airman and Family Readiness Flight, offered some tips to help those who are thinking about buying a home.
According to Mr. Davis the first step is to have a written budget plan.
"Ninety nine percent of my clients don't have a written budget plan, but you've got to know what your discretionary money is, how much money you have after you paid off your bills," Mr. Davis said.
Mr. Davis also warns that there are several hidden costs involved in owning a home.
"You have to pay property taxes and the home owners association," Mr. Davis said.
According to Mr. Davis, the most important move that a home buyer can make is to get a fixed mortgage rate.
"Don't be fooled into getting a fixed rate for the first few years only," Mr. Davis said. "Make sure the rate is fixed for the length of the mortgage."
Buying percentage points off the interest rate of your mortgage is another way to ensure that your house payment will be affordable.
"You are probably going to have to ask your real estate agent about buying points," Mr. Davis. "He or she is not likely to come out and talk about it. They usually cost $1,500 each point."
Mr. Davis urges home buyers to be certain that their agent is working in their best interest.
"Some agents are also representing the seller, which they shouldn't be doing, but you've got to make sure they have your best interest at heart," Mr. Davis said. "Some agents will split half of their commission with you. If after a few months your agent keeps showing houses that you haven't asked to see, it's time to move on."
Home buyers should also keep an emergency fund in case there is a problem with a major house appliance.
"Just because you have a new home doesn't mean you won't have problems," Mr. Davis said. "If you have more than 35 percent of your paycheck going out to other bills, you might want to reconsider buying a home, because you want to have money saved the first time an emergency comes up."
Because Airmen are assigned to new locations often, they must ensure that their houses can sell quickly. "Airmen need to be asking themselves a few questions: If I have a permanent change of station, can I sell my house? If not, can I afford two mortgages? Is this my last assignment? Is the house in a good location so I can sell easily? If you don't like the answers to these questions you might want to consider renting instead," said Mr. Davis.