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Looking for a Home?

Shop Smart - A lifelong mover shares lessons on homebuying and renting

By Lee Brookman
Courtesy of USAA

Think you’ve moved around a lot? Try talking to Kathie Hightower. The former soldier and Army reservist has relocated 20 times in the past 30 years. Crisscrossing the globe alongside her husband, Greg, who recently retired from the Army, Hightower has learned a bit about when and how to buy a house.

“We were very naive when we started,” says Hightower, a USAA member and co-author of Help! I’m a Military Spouse — I Get a Life Too! “We didn’t think strategically about the right way to buy a house, and we got burned.”

Here, she shares some of her hard-earned wisdom with would-be homebuyers. And June Walbert, a Certified Financial PlannerTM practitioner with USAA, weighs in.

Don’t Jump the Gun

To buy or not to buy: That is the question facing many families as they pursue the American dream — especially military families who move frequently. Buying a home offers the benefit of building equity, Hightower says, but renting might make more sense if it puts you closer to work or in a better part of town. There’s also the length of your stay and the current housing market to consider.

“When we moved to the D.C. area, we chose to rent,” Hightower recalls. “We knew we’d be there a short time, and we thought housing prices couldn’t possibly go any higher.”

If you’re trying to decide between renting and buying, consider whether you would own a house long enough to recoup closing costs and fees related to a purchase. If you know you’ll be moving in a year or two, it might be best to rent. Online tools can aid in the rent vs. buy dilemma. (Check out nytimes.com/interactive/business/buy-rent-calculator.html.)

Related Articles:
MilitaryAvenue.com Resources: Buying a Home

Can I Afford to Buy a Home

“Buying a home is potentially the biggest purchase you’ll make in your life,” adds Walbert. “Don’t rush into it emotionally. If housing prices in the area are declining or even rising too fast, it might not be the right time.”

Crunch the Numbers

If you decide to buy, be careful not to overextend yourself. Homeownership creates a lot of expenses — a mortgage is only one of them, warns Hightower. “As an owner, you have to factor in maintenance and repairs, property taxes, higher insurance and other costs you didn’t pay as a renter,” she says.

Walbert offers additional mortgage advice. “There’s a big difference between what you qualify for and what you can really afford. Your monthly housing costs shouldn’t exceed 28 percent of your gross income. And if you’re married, you should be able to make the payment comfortably on only one spouse’s income.”

Know What You Need

Everyone’s heard the real estate adage: location, location, location. That’s still important, but it takes more digging to find a house that will keep you happy for years to come, and it takes discipline to avoid a purchase you’ll regret.

Some things to look for are in plain sight, says Hightower, like a large kitchen if you love to cook or a big backyard for kids. Then there are not-so-obvious factors. “We bought a house in Tacoma, where it rains all the time,” she says. “We had to make extensive renovations to keep the basement from flooding.”

Avoiding an impulse buy is critical, says Walbert. “Make a list of everything you want in a home and a neighborhood; then conduct your research accordingly.”

Have an Exit Plan

Even before you buy a house, think about your next move. “You have to think a step ahead, especially if
you move around frequently,” says Hightower. “Could you sell the house quickly or rent it out if you needed to?”

In hindsight, had they purchased a house near D.C., it could have made a valuable rental property given the flow of military families through the area.

Walbert cautions against the assumption that a quick sale will be easy or profitable. She advises buyers to prepare for the possibility of being “underwater” on their mortgage — owing more on the house than it’s actually worth.

“Real estate is a long-term investment of at least seven to 10 years,” she says. “That’s not to say frequent movers should never buy a house. But be prepared to own it as long as necessary to avoid a financial setback. If you must move, renting may be a viable option.” »

USAA makes it Easier

Buying or renting a home can be intimidating. So USAA launched Home CircleTM, a free program to help members find their dream home with usaa.com or their iPhone®. Learn more at homecircle.com.

Search the Multiple Listing Service (MLS). USAA members now have access to MLS listings — the same source used by real estate agents — at homecircle.com. Tailor your search by comparing schools, proximity to military bases or businesses, and amenities like shops and restaurants.

Buy or sell your home with USAA MoversAdvantage® and you’ll have access to a local real estate expert, plus you can qualify for up to $3,100 when you buy and sell with the program.

Use the USAA Mobile App for the iPhone® to search for a home that meets your specifications — including convenience. Find a great place that’s close to your workplace, school or shopping.

Research demographic information to find a neighborhood that’s right for you. You can search school rankings, crime statistics and other pertinent facts.

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posted 9.28.10

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