In 2004, Scott was living in Charleston, S.C., and getting tired of the renter's grind. So after looking into his homebuying options, he decided to apply for a mortgage through the U.S. Department of Veterans Affairs.
For a roving Coast Guardsman like Scott Dow, renting was a way of life. But after 21 years of service, Scott knew it was time for a change.
And thanks to the unique perks afforded to veterans through the VA loan program, he was able to not only buy his first home, but also trade up for an even better property.
VA loans are guaranteed by the Veterans Affairs office and provide qualified servicemembers with several perks that civilian buyers don't have. For instance, buyers who qualify for VA loans are not required to pay a down payment at closing, nor do they have to pay private mortgage insurance for falling short of 20 percent equity in the house. (Learn more about VA loans here.)
"You can go 'no money down,' which is something that's pretty rare today," says Scott, "especially with the housing situation the way that it is."
Armed with his VA home loan pre-approval, Scott found a two-bedroom townhouse unit that seemed like the perfect starter home. But if Scott did his homework on loan products, then he may have skimped on researching the ins-and-outs of townhome living.
"There are some pitfalls about townhomes I didn't really think too much about -- noise factors, bumping on the walls, those types of things," he said. All the types of nuisances that you're likely to encounter while living under one roof with four families.
Not quite satisfied with his first purchase, Scott decided that he could do better. So with the momentum of the 2004 housing market at his back, he decided to make a gutsy move, and trade up to a better home.
In the summer of 2005, Scott had only been living in the townhome for six months when he put it on the market. To his delight, the home not only sold, but the buyer paid substantially more than what he had bought it for.
"I purchased for $145,000 and sold for $185,000," Scott says. "And I was content with just taking the $40,000 and putting it in the bank, and just take a little bit of time, rent a place around the corner, and then be a little bit more selective on another trade-up home."
But once he got a taste for homeownership, the prospect of returning to a life of renting suddenly seemed less than appealing. Upon arriving at the temporary rental, he knew it wouldn't work out.
"It was just filthy and there was just no way that I would be happy living there -- nor would my fiancée Jackie," he says. With little time to find a suitable rental, Scott and his fiancée were forced to live in hotels while they searched for a new home. Then, just as suddenly as he sold his townhouse, Scott found what he was looking for.
"I just came upon this cute little house -- two stories, wrap-around porch," he says. At around 1,600 square feet, it was just what Scott needed for his growing family. But this time around, there was a slight hitch in the buying process.
After talking the seller down by several thousand dollars off the list price, Scott informed him that he'd be using a VA loan for the purchase. But the seller remained unconvinced of one of the loan's more popular features.
"I was not obligated to put a down payment down, and I tried to explain that to the seller of the home -- and he wasn't buying it." So in the interest of closing the deal fast, Scott relented, and agreed to pay a $10,000 down payment.
Of course, had he known what he'd find in the home, Scott might have thought twice before obliging.
"About a year later we discovered why the owner did not want us to live in the house prior to the sale of it ... there was no cold water supply to the guest bathroom," he said.
In hindsight, Scott says, he would have paid for a home inspection before closing on the deal.
But barring these minor missteps, he and Jackie say that they're thrilled to have their own home, and are most certainly glad for the options offered by the VA loan program.
"I just can't overemphasize what a tremendous value it is to the veteran and his family," he says.
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