Qualify for a Mortgage by Combining BAH with a VA Loan

Military families make many sacrifices while serving their country; the dream of home ownership doesn’t have to be one of them.

Military families who deal with frequent may think they have to settle for renting instead of buying. But, depending on the real estate market, constant renting can be financially draining and can cause you to miss out on the longer-term investment of real estate ownership.

With proper financial planning, military families can purchase a home easily relying on the combined support of the VA Home Loan Program and your military Basic Allowance for Housing benefit.


BAH CAN HELP YOU QUALIFY FOR HOMEOWNERSHIP

First, use your military BAH benefit to help you qualify for a VA home loan; it is secure, measurable proof of income. While BAH is often applied to a rental circumstance, many servicemembers don’t realize that BAH can also help put them at the income level needed to qualify for and support a VA mortgage.

BAH rates depend on your pay grade, dependent status, and geographic location.

BAH rates are based on rental market prices and cost of living in your designated area, and therefore have not traditionally been enough to support costs associated with homeownership including mortgage, homeowners insurance, property taxes and more.

In order to determine the mortgage payment you can afford, find your military pay grade and location on the 2010 Military BAH rates table.

IS A HOUSING DOWNTURN YOUR HOMEBUYING OPPORTUNITY?

A housing market downturn may be the perfect opportunity to employ your monthly BAH towards homeownership.

In a real estate downturn, where prices of homes drop significantly, you may find the cost of homeownership comparable to renting. Thus, you may find it easier to afford the home you want and then to sustain it without needing much more than your monthly BAH.

In the 2010 housing market, real estate prices decreased significantly, making it easier for many to find the home they wanted at a price they could manage. Considering that VA mortgages are no down payment mortgages that also offer low interest rates, your monthly mortgage may require no more than your monthly BAH to support the payments.

BAH PLUS A VA LOAN CREATES A WINNING STRATEGY

It is entirely possible and can be financially beneficial for military families to be homeowners while serving in the armed forces, according to Ken Hudspeth, a San Antonio Real Estate Agent who helps military families use their BAH allowances plus VA loan benefits to achieve successful homeownership.

In fact, he attests, with a winning strategy that combines the benefits of a VA loan with your BAH allowance, military servicemembers can sometimes pay their mortgage from monthly BAH benefits with minimal additional out-of-pocket expense to support your homeowner expenses.

Hudspeth has built his career guiding military families towards making the most of their VA mortgage and BAH benefits, and he offers free consultations to military families who want to make homeownership a sustainable financial move.

GET MILITARY SUPPORT FOR YOUR HOUSING PLAN

Paying a mortgage using BAH requires planning, patience and support.

Less optimistic real estate experts warn military service members that they may need to make sacrifices when depending on BAH to support homeownership. But if you are willing to re-prioritize and find a home within your BAH-supported price range, then military homeownership can be a win-win strategy for your military family.

Before starting to shop for a new home, ask your lender and real estate agent to help you determine your affordability range. A real estate agent specializing in military relocation can be a great help, regardless of which military branch you are serving. Then meet with your VA Home Loan representative to develop a mortgage strategy that matches your military pay, your monthly BAH, and your desire for a home of your own.

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