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<\/h2>\nPart of military life is the high percentage of receiving your permanent change of station orders.\u00a0 This is also called PCS orders for short.\u00a0\u00a0PCS is the military version of a job relocation over 50 miles away.\u00a0 At least a\u00a0benefit is that the military will pay for the move in these cases.\u00a0 Typically, military families are given 2 – 3 months notice of the duty station change.\u00a0 In order to have a smooth PCS transition, start planning and acting immediately.<\/p>\n
<\/h2>\nFor the end result of buying a new home<\/a>, there are important decisions to make.\u00a0 First of all, what should you do with the current home?\u00a0 Renting or selling the home will affect the new home purchase in several ways, but either could work.\u00a0 Next, is to choose an experienced Realtor<\/a> local to the new duty station.\u00a0 It is very helpful to work with a real estate agent who is experienced in the military PCSing process.\u00a0 Finally and equally as important, is to choose a VA mortgage lender experienced in the PCS process and the VA loan<\/a> options available for every scenario.\u00a0 So let us help in explaining the VA loan options for PCS’d\u00a0service members<\/a>, plus how these options work.<\/p>\n Service members need to make some key decisions within a short timeframe after receiving PCS orders.\u00a0 Often to purchase another property<\/a>, buyers need to rent or sell the current home.\u00a0 In order to make this decision, there are several factors to consider.<\/p>\n While making the decision to sell, it is paramount to choose a listing agent that is familiar with this PCS process.\u00a0 Additionally, look for real numbers on your house.\u00a0 A\u00a0reputable Realtor will show you documentation\u00a0to back up a listing price, plus expected sales turnaround.\u00a0 Of course, not all markets\u00a0support a fast closing.\u00a0\u00a0Plus, there may not be enough equity in the home to sell.\u00a0 One of the worst things would be to plan on selling at a certain figure to find out in a few weeks, there must be a drastic price reduction.<\/p>\n If selling is not an option because of a slow market or limited equity, renting could work.\u00a0 Maybe the rental market is strong for the area and becoming a landlord fits the military family’s goals.\u00a0 Check out a recent article “How to get into real estate investing and build wealth<\/a>“.\u00a0 The article discusses potential for starting a real estate portfolio.<\/p>\n Lastly, speak to your mortgage loan officer for the new purchase.\u00a0 Thoroughly discuss how renting or selling the current home affects the VA entitlement and VA loan qualification.\u00a0 VA will allow 100% of the new contract rent payment to offset the mortgage payment inclusive of principal, interest, taxes, and insurance.\u00a0 This could help a service member use VA again to buy a home, which we discuss in more detail below.<\/p>\n [av_button_big label=’Start the Conversation With One of Our VA Experts’ description_pos=’below’ link=’manually,http:\/\/teammovemortgage.com\/contact-us\/’ link_target=’_blank’ icon_select=’no’ icon=’ue800′ font=’entypo-fontello’ custom_font=’#ffffff’ color=’theme-color’ custom_bg=’#444444′ color_hover=’theme-color-subtle’ custom_bg_hover=’#444444′][\/av_button_big]<\/p>\n Beginning\u00a0the home buying process from afar is tough.\u00a0 Plus it\u00a0takes a lot of trust and nerves.\u00a0 Starting the process by looking at pictures online<\/a> but not knowing anything about the area is difficult.\u00a0 So that is where a local, experienced real estate agent <\/a>needs to be your eyes and your guide!\u00a0 Begin with creating a list of your wants, needs, and a budget.\u00a0 Next, interview agents in the new PCS’d area\u00a0and see which one exceeds the others\u00a0in\u00a0your opinion.\u00a0 Relay your list to the agents and once the Realtor is chosen, the agent should start sending houses which meet your criteria.\u00a0 Because of the relocation situation, Realtors<\/a> in these cases are depended on more than a traditional purchase.\u00a0 This is especially important on a fast moving market as the buyers may go under contract without even seeing the house in person.\u00a0 Talk about trust!\u00a0\u00a0That’s why choosing an agent that is experienced and fully understands your family’s needs is so important.<\/p>\n Keep in mind that a buyers agent will require a prequalification letter from a reputable lender.\u00a0 Plus it is very important for the buyers agent to have a detailed discussion with the loan officer.\u00a0 The agent, loan officer, and buyer will have thorough discussions to organize a plan.\u00a0 Part of this plan is deciding on VA loan options to meet the overall goals and\u00a0path of the prior home.\u00a0 So let’s discuss those.<\/p>\n Luckily military families have access to probably the best mortgage loan type available.\u00a0 Because of the no money down option and\u00a0no monthly mortgage insurance, it is a very attractive option.\u00a0 But often it is not as easy as “Just give me the VA loan option”.\u00a0 Especially in the case of a PCS scenario as there is usually another property in the mix.\u00a0 How much the prior home rents or sells for plays a huge role in the new VA approval.<\/p>\n One of the first questions an experienced VA loan officer will ask would be the plan for the current home.\u00a0 In this case, if the home will be rented, VA treats this very favorably for the buyer.\u00a0 Let’s say the current home has no equity and the total mortgage payment is $1000 per month.\u00a0 Then if the PCS’d family rents out the current home for $1000, VA considers the payment covered.\u00a0 We would not have to count a payment in a VA buyer’s debt ratio or residual income.\u00a0 Therefore, it is much easier to qualify.<\/p>\n But if the current home has a VA loan on it, then a portion of the Veteran’s entitlement will be tied up.\u00a0 Don’t worry though, because many are still able to purchase with no money down up to a certain amount.\u00a0 The amount depends on the basis and bonus entitlement available.\u00a0 Learn more about how VA Entitlement works<\/a> which is displayed on the Certificate of Eligibility.\u00a0 Plus we will request the COE for the buyer which is usually obtained online within a few minutes.<\/p>\n Many do not realize that it is very possible to have 2 VA loans at once.\u00a0\u00a0So renting out the current home and having two VA loans at once could be done.\u00a0 Having two VA loans at once requires accessing the buyer’s bonus entitlement or 2nd Tier entitlement<\/a>.\u00a0 Basically if the prior VA loan will not be satisfied prior to the new closing, part of the Veteran’s entitlement is tied up.\u00a0 Therefore, a VA lender would use a calculation to determine the total entitlement available for the new purchase.\u00a0 The entitlement and the purchase price will determine the amount of down payment if any at all.\u00a0 Check out another article to learn more called, “Rent your current home and buy your dream home with no money down<\/a>“.\u00a0 Keep in mind this is for the conversion of a primary to a rental.\u00a0 Once a home has already been a rental property for a bit, the tax return numbers must be used.<\/p>\n What if the current home is sold?\u00a0\u00a0This will at least free up the VA entitlement towards the new purchase.\u00a0 Keep in mind that both the sale and the purchase can happen on the same day.\u00a0 Our underwriters would verify the eligibility would be freed up by the simultaneous sale.\u00a0 But what if the PCS orders came\u00a0not long after buying the prior home?\u00a0 The family may have to bring some money to closing or maybe breaks even.\u00a0 Again, at least VA\u00a0offers a no money down\u00a0option.<\/p>\n Unlike other mortgage loans, VA allows the seller to pay all reasonable closing costs without setting a percentage limit.\u00a0 In addition, VA will allow for the seller to pay up to 4% of the sales price towards sales concessions.\u00a0 If buying after receiving PCS orders, there\u00a0could be a creative strategy to help the closing happen.\u00a0 The buyer may lack funds for some painting that needs to be done.\u00a0 Maybe the buyer needs to pay off a debt in order to qualify or just feel comfortable enough to buy the new home.\u00a0 That is where a knowledgeable realtor and lender, plus a willing seller could help make a closing happen for everyone.\u00a0 Learn more about using sales concessions creatively here.<\/a><\/p>\nShould I Rent Out or Sell My Home After Receiving PCS Orders?<\/h3>\n
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Conversation with your VA Loan Officer<\/h4>\n
Choosing a Real Estate Agent at the New Duty Station<\/h3>\n
VA Home Loan Options After PCS Orders<\/h3>\n
How to Use a VA Loan While Renting Out Prior Home<\/h4>\n
Renting Current Home and Using Another VA Loan<\/h4>\n
Selling Current Home and Using VA Loan on New Home<\/h4>\n
Using Seller Paid Costs and Sales Concessions After Receiving PCS Orders<\/h2>\n
Additional Benefits of a VA Home Loan<\/h2>\n