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PCS Resources

It’s PCS Time — Should We Live on Base? Rent? Or Buy?

2022-06-03

When you get PCS orders, you might wonder if you should move to base housing, or rent or buy off base. Those questions aren’t easy to answer and your decisions will involve many factors like where you are in your career, your finances, your family size, and how long you think you’ll live in an area.

Generally speaking, each option offers advantages and disadvantages and you’ll need to weigh the factors that matter to you and your family to make the best decision. To get you started, here’s a quick look at each option.

Related: Low Interest Rates Make Buying More Attractive Than Renting

Living on Base

On-base neighborhoods are essentially gated communities. The benefits include being close to work and schools, a grocery store (Commissary), gym, and coffee shops. Plus, you’ll be surrounded by military families who understand PCS moves and deployments and will be welcoming to new neighbors since they’ve “been there, done that” and may have recommendations for local dentists, doctors, veterinarians, and the like.

You may have to pay “rent” for base housing, but it won’t be more than your basic housing allowance (BHA). You also won’t have to pay for water, sewer, electricity, trash pick-up or major repairs.

The drawbacks include the age and condition of some base housing (of course this varies widely) and the long waiting lists (sometimes over a year!), with some housing options only available to those at certain ranks or with families.

Renting

If you’ll only be in a location for a short time, say two to three years, it may not make sense to buy a home because of the associated fees and closing costs.

Renting may be a better option. And it’s easy: You sign a lease agreement, pay a security deposit, and make the first rent payment. Each subsequent month in the term of your lease, you pay the rent as specified in the lease.

Your rent payment is likely fixed for the term and won’t increase without proper notice. Also, you won’t be responsible for any major repairs unless they’re necessary because of your harm or negligence. Plus, if you receive orders to PCS, you’ll have the option to terminate the lease with 30-day notice.

Buying a Home

Buying a home with a VA Home Loan can be a smart option if you plan to stay in an area for a while, or plan to rent your home if you get PCS orders.

Most lenders will require a credit score of at least 640 and a debt-to-income ratio of less than 50% (which means that your monthly debt payments are not more than 50% of your pre-tax income) to qualify. In addition to lender and real estate agent fees, you’ll pay a VA funding fee that varies based on how much you’re borrowing and the amount of your down payment (if any).

Related: Current VA Funding Fee Extended to 2022

The good news is that with a fixed interest rate, you’ll have a set monthly mortgage payment, which could include setting aside funds in an escrow account to have your mortgage company pay your property taxes and homeowners insurance — so you don’t have to worry about remembering to make those payments. Of course, if your property taxes or homeowners insurance premiums change, then your monthly payment amount may vary. You also get more benefits like choosing where you live, remodeling to your liking, and building equity.

As a homeowner you’ll be responsible for all maintenance and repairs, so you’ll want to have sufficient emergency savings for these unforeseen issues and you might consider a home warranty service if you don’t have much saved.

We’re Here to Help

Whether you’re just thinking about buying, ready to start home-shopping in earnest, or thinking about refinancing, an AMS Military Mortgage Advisor will be happy to provide you with an honest and fair comparison of your mortgage options, including a wide range of low-rate and low-cost mortgages designed to meet your needs.

Ensuring AAFMAA Members obtain the best mortgage possible is our mission. Get your free mortgage assessment today or give us a call at 844-244-0564!