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Module 2 Discussion: Comment on a Case Study
  • 5. Corporate Michael and Jennifer Reyes, a young couple in their 20’s, have been married for four years and are the parents of a toddler, Anna Marie. Corporate Reyes, although not currently deployed, serves in a Marine unit that has a reputation for fast deployments. Jennifer is a bookkeeper in a medical office. Anna Marie is enrolled in a child development center on the base; her dad drops her off in the morning and her mom picks her up in the afternoon. They currently rent an apartment in military family housing, but it is cramped and short on both storage and parking space. They need room to park two cars plus the new motorcycle Michael just purchased. Jennifer has been studying the numbers. They don’t have a lot of savings, but with the combination of two incomes and housing allowance plus no money down VA financing, they might be able to buy a home.

    • What are the issues involved in this scenario?
    • What questions would you ask?
    • What guidance would you offer the Reyes family as first time home buyers?

    After you have posted to this discussion, review your colleagues’ comments and reply to at least one other post.
  • They should rent in new area before purchasing.
  • Issues: Jennifer will seek new employment upon the move. Current home does not have enough space to accommodate their expanding lifestyle. They don't have a lot of savings.

    What is your rank?
    How long before your next PCS?

    You may want to consider renting in your new area until you have more savings available for the purchase of your home.
  • Jennifer should get the job first and then see if they can afford the mortgage and other costs associated with purchasing a home.
  • The family cannot qualify without Jennifer's income, and should rent until she obtains employment.

    If the BAH is appropriate for the family's needs they will need to save money for closing costs and additional cost before buying a home.
  • The Maddox family has active children, and need to live in a community that allows them to continue to thrive.
  • rent with short term lease until circumstances improve.
  • I would still look to a mortgage professional and get a preapproval and a better understanding of their income ability. Then strategize to rent or buy.
  • Issues: Potential reassignment or deployment with very little notice; not much put away for a home purchase or move; commuting to and from work/child care affects both parents; current situation is not meeting their needs.
    Do they plan to continue using on base child care? What is the maximum commute time desired to and from child care then to work? Have they spoken with a VA lender to determine what they can afford with or without a down payment? Can they afford a home that offers more space than what they currently have available? When do they anticipate a new PCS?
    Meet with a VA lender to explore financing options, costs to obtain loan and basic moving costs. If home purchase is best option, they need to purchase a home that can be sold quickly or has some rental appeal. If costs exceed their ability, they should continue to rent but may want to consider moving to off base housing that has more storage and parking.
  • *corporal not corporate

    I would have them get preapproved but also look at their location. A large amount of active duty marines are young so your going to have to have a good civlian based market.
  • I would refer them to a lender to determine if they can buy and at the same time look for temp housing. if they can't buy, help them find long term rental and if they can, help them buy
  • The Air Force couple - I would ask them why they chose conventional over VA, and if they had considered VA purchasing when they purchased the previous home. In our area, if they purchased in the right area, they could stand to earn quite a bit of equity over a period of a couple of years.
  • Depends on the rental market in the area. In some neighborhoods here it is more to rent than a mortgage costs. Opportunities would be if the neighborhoods' markets are stable allowing for equity to grow should they need to sell. If they move and cannot sell she may not have a job in the new market.
    Meeting with a lender to find out what it would cost to buy would be good to compare to renting.
  • In THIS scenario, the Reyes family is living in military housing inadequate for their needs. As Corporal Reyes' Marine unit is known for fast deployments, keeping their housing options flexible by remaining renters may be the more prudent option at this time, in light of the following factors:

    - unpredictability of deployment or PCS timing
    - low savings
    - uncertainty of how quickly Jennifer could find employment if PCS is issued to a new location
    - uncertainty of childcare costs in a new area if there is a waiting list at the CDC in their new area
    - they are a young family and very likely to receive PCS orders several more times before settling in one area

    Questions:
    - When do they expect their next PCS?
    - If Corporal Reyes is deployed, do they have enough savings for Jennifer to maintain the household should his deployment exceed benefited time periods
    - have they spoken to a lender to learn if they qualify for a home loan, and if so, for how much could they get pre-approved?

    The primary guidance I would offer is to consider these factors. We could compare the current real estate and rental markets to see which makes the most sense for their current situation. If there is a probability of their moving to a new area within 2 years or less, finding a larger more suitable rental may be the better option as it will offer more flexibility should they need to move quickly. This will also keep their housing allowance readily available should Corporal Reyes receive a PCS order that offers greater stability.
  • I would get them to a lender and see if they would qualify. Once that is determined, I would see if there is anything that would meet their needs in their price range. If not, then I would try to find them a rental in their price range.
  • When is their next expected PCS? If he deploys, will she follow, or stay here? How quickly can Jenn find gainful employment? Get them to a lender to assess their buying power. I can often get sellers to pay most, if not all, of buyers' closing costs. So, with VAs 0-down, they could potentially get into their own home. If it looks like an iffy propostition, it may be better for them to continue renting until they are slightly more stable and have more funds on hand to purcahse their home.
  • What is your rank? When did you get your orders to move here and when do you expect your new PCS orders? Are you willing and can you afford to spend more than your BAH? What size home are you looking for? Have you spoken with a lender yet? Having done the numbers if they are living in this area for at least 2 years or more based on last PCS orders it may be a good idea to buy if less that 2 years I would consider renting unless you want to have an investment property and rent it out when you get your new orders,
  • I would first ask when their next PCS is. If they are only just arrived locally and looking to buy then, suggest they speak with a lender to access their financial situation. Also, if they are eligible, ask them to apply for a PenFed grant.
  • Same as everyone else. All the questions are relevant.
  • With both of them active duty they are in a position to maximize BAH. Rent is high in our area. They can buy a modest home that on BAH will cover. Use 2 BAH to pay down the principal in the home. If something happens and they move they have a rental property. We have a nice golf community with single family attached homes, new construction as well as resale. You can purchase new construction 2000 SF home for $180,000; tile flooring, granite counters, walk in pantry, tile shower/baths, 3 bed, 2 bath, living, den, dining, screened porch, 2 car garage and fenced yard. HOA fees are $600 a year and include lawn care and amenities. These homes rent for $1500 a month and there is a waiting line. With a 30 year loan their payment will be about $1200. Pay double and they can pay off their mortgage in 10 years.
    The house is NEW, so there are no immediate expensive maintenance. Not only does this make an excellent rental but also a great retirement home to come back to.
  • There are two options- One, I would advise them to rent a larger home, they are young and need to save. Or, purchase a home VA depending on the amount of rent they are going to pay outside the base, and start acquiring an investment property for the future.
  • When is next possible PCS?
    Find out if they have talked with a VA lender. If not, give them lender info so I can find out how much of a home they would qualify for.
    Space is cramped so I would ask exactly what they are looking for - bedrooms/baths/acreage, etc.
    Childcare is currently on the base, are they willing to relocate their daughter to another childcare or not.
    etc.

  • I would ask them to speak with a VA lender to find out if they qualify for the VA financing. Lenders will also pay for some of the closing costs so the funds at closing may be zero. At the same time I would speak with Property Management companies who could manage their property should they need to leave on short notice.
  • I agree with Linda Rupee. I might use the rent vs buy calculator to help in the decision making process.
  • Advise them of renting until their financial situation improves, but might also consider VA financing. Use rent vs buy calculator to help with their decision.
  • first I would have them speak with a qualified lender to determine what they can afford. Once we knew what they could afford it would help determine if in the area they lived in could they find suitable living arrangements. If not renting may be their only opinion.
    I would ask when the next possible PCS could be?
    What they plan to do about daycare?
  • Pre-approval with a lender would definitely be my first step. In this area in general, a monthly mortgage runs about the same as a rental. If not less than a rental. However, with very little cash on hand, it still might be wiser for them to do a short term rental. Speaking with a lender is key with this family.
  • The issues I see in this scenario are as follows:
    - Michael has to be ready for fast deployment & that puts everything in Jennifer's lap
    - the currently unknown timing of the next PCS
    - base housing does not meet their needs, cramped, no storage, limited parking
    - they don't have a lot in Savings but with 2 incomes, BAH might be able to do VA
    - they have a toddler and utilize base daycare (Child Development Center) with each parent doing either drop off or pick up

    Questions:
    Michael, do you have any idea when your next PCS will be?
    If they are in off base housing, does Jennifer have a support system if Michael deploys?
    Do they plan to still utilize Child Development Center if they are in off base housing?
    Have they spoke to any Loan Officers about a VA Loan?
    If a PCS is coming up soon, can they tolerate base housing until next PCS?
    Would they be willing renting off base now and save up and increase their deposit and closing cost funds for home purchase at next PCS?
    Would off base rental housing with more room, storage and parking still allow them to save up for the required funds to purchase at next PCS?
    What would they have to give up if they went off base? i.e. Child Development Center, support system for Jennifer if Michael deployed, and any other sacrifices they may need to make to accomplish this.

    The guidance I would give the Reyes family would be influenced by current market conditions and time to next PCS.

    As first time home buyers with little in savings for down payment and Closing Costs, socking away money right now so they can purchase at the next PCS may be their best bet.

    The current market is a Seller's Market and price is continuing to rise and interest rates have begun to rise, making housing less affordable and decreasing buying power.

    I would recommend they sit down and evaluate all 3 options after speaking with a VA Lender. Make a list of pros and cons for staying put, moving off base/renting and home purchase, taking into consideration the upheaval (emotional and physical) that would be involved in the process.

    Take a look at the numbers for each option as well as the sacrifices they would need to make for each option.

    Once they are able to quantify the above, the best choice will be pretty clear.
  • Get them pre-approved and show them the options, they might be able to buy something and their payment will be less than what they get in their BAH
  • Month to month rent possibly rent to own find a home with enough parking for the cars and motorcycle some room for the child to play.
  • Review all scenarios. Speak to a lender for better understanding of their position / preapproval. If unable to buy see what they need to do to be in a better buying position in the future if that is their desire.
  • Talk to a lender to see how much home they can afford.Talk to them about the possibility of deployment, and if they will still be able to finance the home if he is deployed. The wife will need to find work in the new place, or find a place where she can commute. The day care for the child might need to be changed, so they need to figure it out. They migh just rent a bigger place, and wait and see how things go with the deployment.
  • Depends of the rental market, they need more space so they should contact a lender and see how much money they get approved,
    Renting vs buying monthly payments
  • Check out the Penfed, BAH, need more answers about their possible PCS. Everything could be in place for a reasonable purchase if in a very active community. Drawback to childcare provision now on base would require more morning commute for working Mom or higher cost if provided closer to new home.
    Ideally, in a supportive community where perhaps other military personnel and families are in place; with an active, desirable marketplace. We do not want to tie up their future VA loan potential by leaving a rental here if and when transferred. Sell, develop a good mortgage history, and utilize the benefit in full again.
  • What are the issues involved in this scenario?
    Well the issue her is the lack of funds saved to handle a closing. They will require extra funds to put towards closing.

    What questions would you ask?
    I would ask if they would be open to renting for another year, their ideal location, any pending or perceived PCS coming up, etc.

    What guidance would you offer the Reyes family as first time home buyers? I would advise them to find a home to rent for another year to save more money for down payment and closing costs. I would encourage them to take a first time home buyer class to take advantage of any state-availabe down payment assistance.
  • What are the issues involved in this scenario?
    They do not have a down payment saved, they are new to an area, the spouse is unemployed, two young children and a high chance of deployment. I think they are not in a position to buy but would put them with a VA lender that can help them with that financial goal to buy eventually. While they are saving, I would look for larger rentals close to the base, new job and childcare.

    As first time home buyers I would encourage them to get their financing squared away as they drive through neighborhoods and talk to friends and other military families. Connect to the local Facebook group to have a support group when the spouse is deployed. Find a job that will get to where you want to be - close to schools, childcare, base, and a new home. Work with a VA lender to have reasonable time frame and price range for your new home.




  • Renting would be an obvious solution and they should gauge their economic structure and housing choice based on the husband's income in the event of deployment or change of duty station.
  • Reserves (savings) for a future home purchase are very important. It is important to weigh their options and to also see if they are interested in renting.
  • I would assess the market first. If there is a good chance of a short term market increase, I would advise buying, but would caution there are no guarantees. If not, rentals for shorter terms might be the better option. Pre-approval for VA loan, then questions regarding loan expenses would be used in the equation. If buying looked good, we would get a picture of where they would need the market to be at the time of future sale in order to pull a profit after closing costs and Realtor fees. We could also look at the current rent cost to determine if buying and holding as a rental makes sense as an investment option. If they chose this option we would go over the risks involved with renting a property. The rest would be standard proceedure...where, how much, needs, likes and dislikes.
  • Determine the market first and what homes are going for and if that falls into his
    BAH amount. Are they looking at this as a potential rental in the future or are they
    wanting to sell when it comes time to PCS? What are their long term and short term
    goals if they were to buy.

    The issues of him potentially deploying, can they afford a house now, with one
    income or do they need the second income to qualify. I work with a fabulous lender
    and would suggest that they at least got a second opinion from her if anything, to
    get her input and see what the lender recommended as far as purchasing or holding
    off until they were in a better position.

    I'd let them know what current homes in the area they want are renting out for so
    that they'd have an idea of what the future could hold if they were to rent it out.
    There are no guarantees & I would stress that to them, but it would allow them to
    have an idea of what the current rates are should they decide to go that route.


  • Meet with a VA lender and find out the possibilities.
  • No real issues with the scenario but some things I would want to highlight are: Ensure they relocate to an area with great school support system; Ensure the spouse has a comfortable support system along with an area with robust commercial amenities - preferably close to her job and the child's school; lastly, ensure that there are no pending PCS orders (deployment okay) but quick turn around PCS orders are troublesome for VA due to primary residence restrictions.
  • The issues might be:
    1. Jennifer needs to find a job in the new location
    2. Their home purchasing and financing depends on BAH and income, so not being able to sell a home in the market could mean stress on the family
    I would ask what their plans are and when they expect a PCS. I would also provide rental and purchase options for them. In some areas, rental prices are much higher than mortgage payments, and a family with one child can also find a home with lower market value and ample garage and storage space. It really depends on the location and market as to how quickly a home can sell and whether purchasing and home with the expectation of PCS in 2-3 years is feasible. In the market here, homes can go under contract in 2 days -1 week. 15 miles away, homes sit on the market for months. Again, knowledge of the local market DOM and price points makes a very big difference. The BAH for this area can mean different things, depending on the local real estate market. And schools differ as well. For $300,000 you can buy a home in a very poorly rated school district (these homes appeal to professionals without children) and homes in top quality school districts with 3-5 bedrooms.
    I can't really respond to this scenario without knowing the local market, BAH, client plans, potential for PCS, and ultimately, what their short and long term goals are.
  • Help them get pre-approved and have a solid amount of loan amount in order to find a home with their wants and needs. Hopefully having this information we can find something quickly so they can get settled in and begin their lives.
  • Is there any mention of a move in this discussion? or is this for where they are currently as i read it?
    They have been married for four years but how long have they been at current location and when do they anticipate a PCS?
    They Just bought a motorcycle with no savings and 2 additional cars concerns me.
    I would want to see their debt to income to evaluate what they can afford.

    In a PCS situation having a savings plan would be vital for their success, finding a home close to school/daycare and employment would be important as well,for when there is a rapid deployment.
    We would show them homes for sale and rent to find the best fit for the family financially and logistically.

  • Arrange a meeting with a VA experienced lender to evaluate their purchase readiness.
  • How long have they been stationed here? First and foremost-
    If they have a good chunk of time left, or expect to stay put for a while I would have them talk to my preferred lender to see exactly where they stand financially. Will they purchase something that is right at their bah level or want to come out of pocket for a more expensive home?
    Next, I would talk to them about the market trends thus far, and bring to their attention if a PCS happened, there would be a need to sell or rent their home.
    Worst case scenario- can't sell and don't find a renter in time, there could be financial strain and they should consider having a safety fund in that event.
    They may want to stay close by due to their child going to the day care on base, and if not, locate some day care options and find out pricing on those because daycare is expensive and that will cut into their home buying fund.
  • *theres a good chance he will be transferred shortly after buying a home. Will they have funds/equity to sell this home to buy a new one, would they want to be landlords.

  • • What are the issues involved in this scenario?
    Finding a home in the right area, safe in their eyes and close to the CDC and stay within their price point
    • What questions would you ask?
    How long they will be stationed there, what are their plans once that time is up, are they open to renting if the move is faster than they anticipated.
    • What guidance would you offer the Reyes family as first time home buyers?
    I would explain the home buying process and VA loan, also discuss the VA funding fee and type of home they would need to find to qualify for VA loan. I would also discuss being careful with new purchases since he just bought a new motorcycle. I would also make it a point to talk about what red flags to avoid in homes since they don't have a lot in savings.

  • @penelope the one thing a lot of people don't realize with deployments though is that they make a bit more money and usually tax free so him getting deployed may be a way they can put money towards savings.
  • . Corporate Michael and Jennifer Reyes, a young couple in their 20’s, have been married for four years and are the parents of a toddler, Anna Marie. Corporate Reyes, although not currently deployed, serves in a Marine unit that has a reputation for fast deployments. Jennifer is a bookkeeper in a medical office. Anna Marie is enrolled in a child development center on the base; her dad drops her off in the morning and her mom picks her up in the afternoon. They currently rent an apartment in military family housing, but it is cramped and short on both storage and parking space. They need room to park two cars plus the new motorcycle Michael just purchased. Jennifer has been studying the numbers. They don’t have a lot of savings, but with the combination of two incomes and housing allowance plus no money down VA financing, they might be able to buy a home.

    • What are the issues involved in this scenario?
    Issues are lack of savings, lack of space in current location, and possibility of deployment
    • What questions would you ask?
    Questions I would ask are:
    1. Do you know your VA Eligibility?
    2. Have you spoken to a lender to get pre-approved for a VA Loan?
    3. How much could you afford for a monthly payment?
    4. What is your plan for child care if you move off base?
    • What guidance would you offer the Reyes family as first time home buyers?
    My guidance would be to look into first time home buyer assistance with PenFed Credit Union for closing costs and to consider a VA Loan where they have the no money down option. I would suggest if they have items they do not need, that they sell them and put that money in savings so they have it for earnest money.