In the military and going overseas? You can still get a mortgage – here’s how
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At any given time, a multitude of U.S. military personnel are stationed or deployed overseas. Although far from home, it’s possible for active-duty military abroad to get a mortgage — a VA loan or other type — and buy a home, thanks to remote capabilities.
- Seventy-seven percent of veterans own a home, a higher homeownership rate compared to the general population, according to a National Association of Realtors (NAR) analysis of 2019 Census data.
- The median home value of veteran-owned homes was $230,000, lower than the median value for homes owned by the general population ($242,000), according to the analysis by NAR.
- Approximately 54 percent of veterans are in the process of paying down the mortgage on their home, compared to more than 60 percent of the general population, according to the analysis by NAR.
- More than 197,000 VA loans were guaranteed by the U.S. Department of Veterans Affairs (VA) in the second quarter of 2022, with an average loan balance of $339,280.
- The VA guaranteed more than 1.4 million VA loans, with an average balance of $310,174, in fiscal year 2021.
- Ninety-five percent of military members know what a VA loan is, but just 32 percent know this type of loan doesn’t require a down payment, according to Navy Federal Credit Union.
- Some 80 percent of VA borrowers are ineligible for conventional loans, according to Veterans United Home Loans.
- The average 30-year VA loan rate is currently
, while the average 30-year VA refinance rate is , according to Bankrate’s national survey of lenders.
What is a VA loan?
A VA loan is a mortgage for active-duty military members, veterans and surviving spouses. It’s guaranteed by the U.S. Department of Veterans Affairs (VA), but the loan itself isn’t originated or funded by the government; it’s offered by VA lenders. VA loans don’t require a down payment or mortgage insurance and in most cases have no loan limit.
Should you get a VA loan?
Even if you’re eligible for a conventional or other type of mortgage, a VA loan can help you buy a home with minimal upfront cost, so it’s worth considering as an option whether you, a family member or member of your household is on active duty or a veteran.
If you are currently on active duty, know that there is a minimum service requirement for a VA loan: 90 consecutive days. If you meet that minimum, you can then apply for a Certificate of Eligibility (COE), which you need to obtain the loan. To do this while on active duty, you need a signed statement of service from your commander, adjutant or personnel officer. Once you have this statement of service, you can apply for your COE through the eBenefits portal.
Why to buy a home while deployed
Part of serving in the military is the possibility of needing to move as required, often on short notice. If you’re currently renting, or already a homeowner and in need of more space, you can still buy a home even in the event you are deployed. The advantages of buying a home include:
- No lease (if you’re a renter)
- Stability for family members, especially children
- Potential tax benefits
What to consider when buying a home from abroad
If you (or a family member) are deployed and you’re in the market for a home, you won’t have the opportunity to look for a property in person. A spouse, other family member or real estate agent can help, and you might even be able to do a 3D walkthrough or video tour yourself.
Beyond the house-hunt, you’ll also need help managing the process of getting a mortgage. Keep these three points in mind:
1. Granting a power of attorney
While you are deployed, you can appoint a person or entity to represent your interests in the purchase of a home with a power of attorney (POA). To grant a POA, you’ll need assistance from an attorney, legal clinic or a Judge Advocate General (JAG). Any of these professionals can also recommend additional legal measures to take, depending on your situation.
In many cases, military members grant a POA to a spouse so the spouse can do tasks like sign paperwork on their behalf. As you consider who to appoint, ask these questions:
- What powers will you allow the person to have?
- Do you want to establish limitations?
- How long will the POA last?
- Can you revoke the POA at any time?
- Can you name a backup?
You’ll also want to confirm with the closing or title agent what POA documentation they’ll need to close your mortgage.
2. Meeting occupancy requirements
A condition of VA financing is that the borrower must live in the home, which can be a concern if you’re deployed.
In general, borrowers have a “reasonable time” to move in once their VA loan closes. “Reasonable” is defined as 60 days, but can be longer if you can certify that you’ll live in the home by a specific date within 12 months of the closing. If you are on active duty and can’t meet the “reasonable” standard, a spouse or a dependent child can live in the home to satisfy this occupancy requirement.
However, if you’re deployed, you already meet the occupancy requirement. As outlined by VA:
“Single or married servicemembers, while deployed from their permanent duty station, are considered to be in a temporary duty status and able to meet the occupancy requirement. This is true without regard to whether or not a spouse will be available to occupy the property prior to the veteran’s return from deployment.”
3. Verifying military status
It’s important to have your military status verification before searching for a home or applying for a mortgage.
VA loans are limited to those with qualifying military service. Under the Servicemembers Civil Relief Act (SCRA), military members have access to benefits such as foreclosure protection. For this reason, when considering a VA loan application, mortgage lenders need to verify the borrower’s active-duty service and other service-related information.
The Defense Manpower Data Center (DMDC) maintains a Verification of Military Service website. There are also commercial vendors that provide this information to lenders. It’s best to consult with your lender for specific details regarding what you need
VA loans have unique benefits that can make buying a home more affordable, and you can still get one while you (or a family member) are deployed, provided your service qualifies you. Appointing a power of attorney can help manage the purchase of the home on your behalf while you’re away, and your lender can advise you about what documentation you need to verify your military status.