3 Ways Veterans Can Save Money On The Biggest Purchase of Their Life!

If you didn’t already know, my husband, Jeremy, is a local Realtor.  He specializes in working with home buyers, and believes in taking a no pressure, educational approach to the home buying process.

In recognition of Veteran’s Day, he wrote this post about ways veterans can save money when purchasing a home – whether you use him, or not! :)

As we approach Veteran’s Day, lots of places offer military discounts that allow you to save $10 here and $25 there – certainly a nice gesture of appreciation, but not something that is going to change your family’s budget.

What about the biggest purchase most people ever make: their home?  Yes, you can effectively get a “military discount” when buying your home, too.  Here are three tips that, as a veteran, can save you thousands of dollars when buying a home.

1. Cash Bonuses at Closing

A few agents offer cash bonuses to military clients when buying a home.  I personally offer up to a $1,700 cash bonus for military buyers as part of RE/MAX Properties Military First program (exact amount is determined by home value).  If you don’t want to use me, you can also get a similar cash bonus by getting an agent referral from USAA, if you use their preferred agent.  (This is because the agent has to pay USAA a referral fee.)

This money is credited to you at closing and can be applied toward the purchase price, effectively “discounting” the home, pay for closing costs, or can even be paid directly to you in most cases.

2. No VA Funding Fee

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If you have a military related disability of at least 10%, you don’t have to pay for the VA funding fee.  Since the funding fee is 2.15% of the loan (on your first VA loan with 0% down), this means you save over $4,000 on a 200k home.

Often a 10% disability takes the form of chronic back pain, sleep apnea, PTS, or other medical problems that aren’t often thought of in terms of a “disability”.  This applies to a lot of military personnel.

If you’re considering buying a home in the near future and think you may have a military related disability, you should seek a determination now as it could save you thousands of dollars when it’s time to buy.

3. First Time Buyer Credit Still Available If You Were Deployed

If you were deployed for at least 90 days (Between Dec. 31, 2008 and May 1, 2010), the $8,000 tax credit is still available for first time buyers or buyers who haven’t owned a home in the past 3 years.

If that applies to you, you just have to be under contract to purchase a home no later than April 30, 2011 and close by June 30, 2011.  You then claim the credit on your tax return.  (Note: this is a tax “credit”, not a “deduction”, so you actually pocket the entire $8,000.)

Putting it all together

Option 1 applies to all veterans.  Depending on your situation, option 2 and 3 may apply as well.  So just for fun, let’s look at how you can use all 3 of these tips together.

Here is what that might look like if you’re buying a $200k home:

RE/MAX Properties Military First Cash Bonus: $1,000

No VA Funding Fee: $4,300

First Time Buyer Tax Credit: $8,000

Total Potential “Military Discount”: $13,300

Questions?  Feel free to give me a call at 719.231.9043, or visit my website to begin searching for homes!