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How to be a Responsible Homeowner

For many, owning a home is the main ingredient to the American Dream. Military service members and veterans display this value even more so, owning homes in greater percentages than civilians. While homeownership is exciting, it’s also the most expensive item you will ever purchase and finance. It can also potentially be your biggest asset. Because of this, there are several things you must remember in order to ensure you are financially responsible while preparing for and living with homeownership.

Unexpected situations can happen

While the requirements for obtaining a VA Loan help to ensure service members and veterans are able to afford their payments and while the VA Loan has the least amount of foreclosures in the last 6 years amongst all available mortgage options, still unplanned situations arise and there is certainly no way to guarantee success.

Saving money for when you need it

When you own a home and have a mortgage, you will have monthly payments that need to be paid. There are a number of unexpected situations that could impact your ability to make a payment and that can have a detrimental impact on your credit score, along with other consequences. Whether it’s because of a loss of income, medical bills, family issues, or any other financial struggles, the mortgage will still need to be paid. So, ensure you are saving up a nest egg to combat any unexpected financial difficulties, should they arise.

What are you paying for each money on your VA Loan?

Remember, your monthly payments are going toward more than just the principal and interest of your home. Parts of each payment goes toward: property tax and homeowners insurance. The commonly used acronym used for this is PITI (principal, interest, taxes, insurance).

While taxes and insurance premiums can go up or down, the principal and interest payments will stay the same as long as you have a fixed rate mortgage.

Other costs to factor in are repairs and regular maintenance, which is typically 1% of the home’s value on an annual basis. For example, on a $300,000 house, the yearly repair and maintenance would be $3,000.

How can you ensure success?

Although borrowers of the VA mortgage program have very low default percentages, for some people, default is a reality. You want to take all the precautions possible to protect yourself from this reality. Defaults, though, aren’t the only thing that will hurt your credit. Loan modifications, foreclosures, and even late payments, will significantly impact your credit and financial profile. So, stay on top of your mortgage and call your loan specialist if you have any questions or concerns.

2 comments

  1. Thanks and good Reading. I found responsible-homeowner.com through a radio broadcast and here I am. Retired USAF Chief 30 Years service Kermit D. Allen Address: 11150 Trinity River Drive #39, Rancho Cordova, CA 95670
    Purchased a Condo VA Loan in 2001, Loan from Wells-Fargo Home Mortgage PO Box 51120 Los Angeles, CA.90051 Loan #0536152184
    Issue: this is a Series of 50+Wood Apartment 2 Story Apartments. Most are Rental by Private Owners but there are a few of us Owner- Occupied residents.
    This is a “Trinity Woods condominium Home-Owner Association complex Managed by Kocal management Co. Folsom ,CA. I am currently providing $255per month to Kocal Management as my share of the HomeOwner Association Monthly Fee which has doubled in 10 years.
    This week I received a letter of notification from Kocal Management Co, on behalf of the HomeOwner Association that it has determined that Extensive Damage and Dry-Rot of the Condo Buildings has been discovered and will result in approximately Millions of dollars to repair. We do not have that amount in our treasury so it is proposed in the letter that WE borrow the funds necessary to perform subject maintenance-repair. I do not concur for several reasons which I will not discuss now. MY QUESTION: TO WHOM SHALL I ADDRESS THIS ISSUE an Non-concurrence. Should it be through legal channels or should I address it to the Loan Company or direct to Kocal Management and the Homeowners Association? Awaiting your response and Thanks You.
    Kermit D. Allen USAF (Retired)

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