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Benefit Financially through a VA Home Loan

VA loans can save veterans and their families significant dollars over the life of a mortgage. They also honor the sacrifice made by those who served our country.

Created in 1944, the VA Loan Guaranty program provides guaranteed loans to qualified veterans, active-duty service members and some surviving spouses. These loans provide major financial benefits, including the ability to purchase a home with no money down. In today’s real estate market, that’s a highly prized commodity.

Financial Benefits of a VA Loan

That no down payment feature means that veterans can come to the table with less liquidity and cash on hand than most other buyers. VA borrowers in most parts of the country can purchase a home worth up to $417,000 without putting down a single dollar.

The purchasing power VA home loans is all but unmatched in the marketplace. But these flexible, low- and no-cost loans also provide other significant savings for veterans and their families, including:

No PMI. Private mortgage insurance is a monthly cost that conventional borrowers have to pay unless they put down at least 20 percent. There’s no PMI on a VA loan, which means veterans can funnel those dollars into home improvements or other purchases.

Sellers pay closing costs. Veterans can avoid paying most, if not all, of the closing costs associated with a loan. The VA allows sellers to pay up to 6 percent of closing costs and concessions. That means veterans don’t need a pile of cash on hand to cover those final costs associated with their loan.

Great Rates. VA loan rates are frequently lower than their conventional counterparts. Even a slight difference in rates can make a big difference over the life of a 30-year mortgage loan. For example, on $300,000, 30-year fixed-rate mortgage at 5.0 percent, the monthly payment is $1,610 without taxes, insurance and other costs. At a rate of 5.5 percent, the monthly payment jumps to $1,703. Over the life of the loan, that extra $93 per month adds almost $34,000 to the cost of the loan.

No Prepayment Penalty. Unlike some conventional loans, there is no penalty for prepaying your VA loan. That means you can spend extra money each month paying down your principal, which will shave years and thousands of dollars off your mortgage.

Those are just a handful of the big-time financial benefits of VA loans. These powerful lending tools have helped more than 18 million veterans become homeowners in the last seven decades.

For more information about VA Loans: Visit this link for VA Loan rates or visit VAMortgageCenter.com for more information about applying for a VA Loan.

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USAA Supports Wounded Warrior Project Through Co-Branded Credit Card

USAA Bank and The Wounded Warrior Project (WWP) recently announced a co-branded credit card, the USAA Wounded Warrior Project World MasterCard®, to raise awareness and funds for severely injured service men and women. The Wounded Warrior Project provides support and programs to service members with traumatic war injuries.

Wounded Warrior Credit Card

The co-branded USAA Wounded Warrior Project World MasterCard® will be available to USAA members who wish to help support the WWP. You can find a link to all of USAA’s military related credit cards here.

USAA also announced the offer of a free consultation with a USAA Certified Financial PlannerTM for recipients of the Traumatic Servicemember’s Group Life Insurance benefit. This is a great way to help our wounded vets better prepare for their future.

Traumatic Servicemember’s Group Life Insurance benefit (TSGLI) is a military program funded by the government that provides a lump-sum payment of $25,000 to $100,000 for certain combat-related injuries. WWP played a pivotal role in lobbying for this benefit, which is designed to assist service members with combat related injuries, and their families, with the financial burdens associated with recovering from a severe injury.

How it works

The USAA Wounded Warrior Project World MasterCard® works just like a cash back credit card, except that USAA will send a percentage of the purchase amount to the WWP to fund their programs. Essentially, the cash back goes to support WWP in developing and delivering unique programs and services to meet wounded warrior needs.

About the Wounded Warrior Project. The Wounded Warrior Project’s mission is to honor and empower wounded warriors. Its purpose is to raise awareness and to enlist the public’s aid for the needs of severely injured service members, to help severely injured men and women aid and assist each other, and to provide unique, direct programs and services to meet their needs. To learn more, visit www.woundedwarriorproject.org.

About USAA. USAA provides insurance, banking, investment and retirement products and services to 7.4 million members of the U.S. military and their families. Known for its legendary commitment to its members, USAA is consistently recognized for outstanding service, employee well-being and financial strength. USAA membership is open to all who are serving or have honorably served our nation in the U.S. military – and their families. For more information about USAA, or to learn more about membership, visit usaa.com.

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How to Ace the ASVAB

Are you are planning on joining the military? If so, you will need to first take the Armed Services Vocational Aptitude Battery (ASVAB) or the equivalent qualifying exam for Officers. It is important to do well on this test, not only because you won’t be able to join the military if you don’t pass, but you may need to reach a minimum score to qualify for certain jobs.

Want to ace the ASVAB? Good. Keep reading!

How to Ace the ASVAB

The main thing is to study and be prepared. You’ll find a number of study guides you can use. Also, learn from others who have taken the test and make sure you learn everything you can so you’re educated on the requirements as well as the contents of the ASVAB.

Here are some things you need to know about the ASVAB, and a few tips on how to ace it.

What is the ASVAB?

The ASVAB is the entrance exam required to join the United States military. If you don’t pass this test you won’t be allowed to enlist in the Army, Navy, Air Force, Marines or any branch of the Reserves. This test is given to everyone who is considering enlisting in the US military.

The ASVAB determines whether you have the mental aptitude required to be in the military branch you’re applying to, and it also determines what job you’re mentally capable of performing.

Which topics does the ASVAB cover?

The test covers four specific areas: Mathematics Knowledge, Arithmetic Reasoning, Paragraph Comprehension, and Word Knowledge.

How to Study for the ASVAB

item photo from Amazon

There are several study guides you can use when you’re preparing for the ASVAB. There are many ASVAB study guides available, some of which are easier to understand than others, so you’ll need to find the one that will work best for you and your learning abilities. Here are some of the top sellers:

If you want to save money, check out a copy from the library or browse through an edition at the bookstore before buying – that way you know you get the best version for your study habits. You can also search out free online ASVAB practice tests and study guides, which can help you get the hang of how the test works.

How to Pass the ASVAB

The best way to pass the ASVAB is to study for it just like any other test you need to pass. Read through the book, ask the recruiter questions that may come up, talk to others who have taken the test. If you don’t pass, you won’t be able to join, so you need to take this test seriously.

Can you retake the ASVAB?

Yes, you can. You will want to do your best the first time, because let’s face it, no one wants to spend several hours retaking a test! But if you don’t score as high enough to qualify for the military job you want, or if you don’t score high enough to qualify for military enlistment, you can take it again. Be sure to put in some extra study to prepare for your second test, and try some online practice tests if you can find some.

Is the ASVAB required for Commissioning?

Two of the branches (Army and Marine Corps) require you take the ASVAB, but the Navy and Air Force do not requier the ASVAB. The Air Force has a separate officer qualifying test – Air Force Officer Qualifying Test, or AFOQT.

If you want to enlist, you must pass the ASVAB

Anyone who wants to enlist in the US military must take the ASVAB test to help them decide on the career that fits their abilities. When you’re prepared for the questions, you’ll do better and feel better about your results, and that will help you to be more successful, and happier, with the specific military career you select.

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PerkStreet Financial – Best Rewards Debit Card Program Anywhere

Are you looking for a new debit reward card program?

Many people I know, myself included, prefer not to carry a lot of cash when they go shopping. For some it is the convenience of plastic, and for others it’s the rewards programs. For me, it is a little of both. I currently use my credit card for almost all purchases, and pay it off in full each month. But I know there are many people who have had bad experiences with credit cards and exclusively use cash or debit cards for their purchases. If you are in that last group, or even in the credit card rewards programs camp, then you should take a few minutes to look at PerkStreet FinancialSM, a new online financial services company that currently offers 2% cash back on debit card purchases – better than any other bank I have been able to find.

2% cash back is only the start. The current offer is 2% cash back program on all purchases, and up to 5% cash back on purchases in popular categories.

PerkStreet Financial – Best Debit Rewards Card

PerkStreet Checking Account PerkStreet Financial is a relatively new company, but they are making waves with this offer. They are able to offer a much better debit reward card program than most other banks because they are entirely online and don’t have to pay for maintenance and care for hundreds or even thousands of branches.

The PerkStreet Financial Offer

PerkStreet offers a free online checking account with no account minimums, no minimum monthly balance requirements, a wide network of free ATMs, and more. PerkStreet Financial also offers free overnight shipping for checks deposits, which will be available the next day. (Simply take your check to a UPS store or MailBox, Etc. and you can use PerkStreet’s account to ship your deposit overnight).

Sound good? Check out these details about PerkStreet Financial:

  • The PerkStreet FinancialSM Debit MasterCard® gives you awesome rewards: 10x the average debit card**
  • $25 deposit and 5 minutes to open
  • Free checks
  • No minimum balance requirement
  • No monthly fees when you use your account
  • Nation’s largest surcharge-free ATM network
  • Free online banking and bill pay

PerkStreet Financial Debit Rewards Program Details

1%-2% cash back program (5% for special categories). The PerkStreet debit card rewards program offers 2% cash back rewards for the first 6 months, and 1% thereafter. However, you will receive the full 2% cash back if you maintain a balance of at least $5,000.

You can also earn up to 5% cash back for spending in select categories. The bonus spending categories during the remainder of June and through July include ice cream from Ben & Jerry’s, Culvers, Dairy Queen and Cold Stone Creamery; home improvement goods from Lowes, Home Depot and Menards; and gas paid for at the pump. Match that with your Home Depot and Lowe’s Military Discount and you can get some serious savings!

Here is the fine print:

“When your Account Balance at the start of the day is $5,000 or more, you’ll earn 2% cash back for all non-PIN debit card purchases you make on that day. When your Account Balance at the start of the day is less than $5,000, you’ll earn 1% cash back on all non-PIN debit card purchases you make on that day. To determine your starting Account Balance, we use your closing balance after all settled transactions from the previous business day. Pending purchases and funds from deposited items that are not yet available are not included in your Account Balance. There is no limit to the total amount you can earn, unless otherwise specified in specific category bonus terms and conditions.”

Receiving your rewards. You can redeem your rewards for cash, a gift card, or gift cards from popular stores such as Amazon, Target, Best Buy, and more.

Open a PerkStreet Financial Account to take advantage of this cash reward program! Opening a PerkStreet Financial Account is free and easy (it takes about 5 minutes). Click here to open you PerkStreet Financial account.

Who Should Take Advantage of the PerkStreet Offer

PerkStreet Financial is great for anyone who doesn’t like to carry large amounts of cash and doesn’t use credit cards. If you are already a debit card user, then PerkStreet could end up putting a lot of your hard earned money back in your wallet.

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Can’t Make Ends Meet? Try a Three Fold Approach to Better Finances

We recently received an e-mail from a reader who was having trouble making ends meet. Due to setbacks in the economy, he was having trouble finding stable work and had to move from a house to a small apartment to make things work. Even then he is having trouble with student loan bills, car payments, and other expenses.

The best advice I have for those with financial difficulties is to hang in there – things will get better.

3 Ways to Solve a Finance Problem

Solving a financial problem is much easier if you have a strong working budget in place. Here are some tips on how to make a zero based budget. Once you have a working budget, you can see, on paper, where your money is coming from and where it is going. Once you have your budget in place, you can really start making progress toward improving your financial situation. For this, I recommend a three fold approach: reduce expenses, earn more money, and sell things.

1. Reduce expenses

There are many ways to reduce expenses, but the best way depends on where you are currently spending money. This is where you will need to refer to your budget. Look for areas where you can eliminate expenses, or where may be spending more than you could be. For example, cut off cable TV, reduce your cell phone minutes, cut back on subscriptions, etc.

If you have a lot of credit card debt, you may be able to transfer your credit card balance to a 0% balance transfer credit card, which could save you hundreds, or even thousands of dollars in interest payments.

2. Earn More Money

Another great way to improve your financial situation is to earn more money. I know this is easier said than done, especially in a tight economy, but there are almost always ways you can earn more money, even if only temporary. You can take a part time job, you can tutor, do freelance writing online, consulting, seasonal yard work, work over time, etc.

3. Sell Things

Another way to earn money to improve your financial situation is to sell things. Many people have items around the house or in storage they don’t need, but may be able to sell. Check your closets, basement, attic, storage, or where you keep the items you no longer use. If it isn’t a family heirloom and doesn’t prevent you from doing your job, then consider selling it for extra cash.

You can even sell large ticket items to get out from under monthly payments. For example, if you have a car with high payments, sell it if you can, and buy a less expensive car without payments. The same goes for a house – if you can sell it without losing too much money, you could probably save money by moving into an apartment or smaller house. Other items include things like boats, 4 wheelers, jet skis, etc. Don’t sacrifice your quality of life for a luxury item – it’s not worth it.

It takes sacrifice and hard work. I’m not going to lie to you – getting out of debt or fixing a finance problem is not always easy. Sometimes it means making the tough decision of selling something dear to you or moving to a smaller home or apartment. But remember these things are for the greater good and will hopefully only be a temporary setback.

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Military Finance Network Rebrands as The Military Wallet

Many readers might have recently clicked on an article link and wondered about the new name at the top of the page. I started this site a couple years ago with a domain name that I had originally purchased for another use. I decided to go the cheap route and use a poor domain name instead of doing the smart thing and buying a domain better suited for the task.

The Military Finance Network has now been moved to TheMilitaryWallet.com.

Why the change? In my opinion, the name, The Military Wallet better reflects the goal of this site – to provide a source of financial information for military members, veterans, retirees, and their families.

What is new, and what will change? The site is essentially the same. All the old articles were moved and all the links pointing to the old domain are automatically redirected to the corresponding link on this domain. From a reader perspective, the only difference is the domain name found in the url. This move is mostly about branding.

From a technical standpoint, there are a few underlying differences (none of which affect the reader). What we did was redirect the links from the old site to this domain, and we also stripped the dates from the urls. This gives the article url a cleaner look, and also makes it easier to bring timeless content to the front page again to bring, or bring updated articles to the front page. (Doing that with articles that have dates in it will either break the old link or require a redirect; neither of which is efficient).

As for changes, there will soon be a new logo and a new design which should both be more user friendly and cleaner on the eyes. There will also be an increased production of new content. This site has been a hobby for the last couple years, but the goal is to spend more time and attention here because I think the military finances are underserved in the web space. If you have requests for articles, questions, or comments, please leave them in the comment section and I will be happy to respond or try to write content that meets your needs.

Are you a blogger? If you have previously linked to Military Finance Network the links should automatically point to the new links on this site. However, Google and the other search engines will index the new site more quickly if you are willing to change the links to the reflect the new domain.

There were two changes made: 1.) New domain, from militaryfinancenetwork.com to themilitarywallet.com, and 2.) the dates were removed from the urls. The changes can be made easily through one of two methods: 1.) a manual search and replace: go to posts in WordPress and search for this string: militaryfinancenetwork.com, then replace it with themilitarywallet.com. The old urls will also need to have the dates removed. Method 2.) Use the Search Regex Plugin, which is easy to do and takes less than 5 minutes. Instructions here.

Feel free to contact me with any questions regarding the move or how to make changes to the links. Your assistance is greatly appreciated!

Thanks for your service and support of our country and thanks for reading. I look forward to serving you through financial content that benefits you!

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Roth IRA Conversion

Should you consider a Roth IRA Conversion?

Moving your money held in a Traditional IRA into a Roth IRA is called a “Roth IRA Conversion.” Many people choose to do a Roth IRA conversion because Roth IRAs have a tax advantage over Traditional IRAs in that the distributions are not taxable income. During the conversion process, the money you rollover from a Traditional IRA into a Roth IRA is added to your annual taxable income for that year.

When you pay taxes on the money you rollover, you pay taxes on the current value of the money, making it possible to take advantage of economic down turns through a Roth IRA conversion.

Future distributions from the newly created Roth IRA will be the same as any other Roth IRA, which is to say, they will be nontaxable. Investors who are in a low tax bracket often decide to invest using Roth IRAs because they expect to be in a higher tax bracket when they retire. Paying taxes on the money in a lower tax bracket will save money over paying taxes later when you are in a higher tax bracket. Many people choose to convert a Traditional IRA into a Roth IRA when the economy is struggling because their Traditional IRA will have less value than in strong economic times and it results in a lower taxable amount.

Who is Eligible for Roth IRA Conversions?

You must meet a few eligibility requirements for converting a Traditional IRA into a Roth IRA, including:

  • Living separate from your spouse for the entire year if your tax filing status is “married filing separately”.
  • Your modified adjusted gross income must be less than $100,000 in the years before 2010.
  • You cannot convert a Traditional IRA if you inherited it from someone other than a spouse.
  • You can convert Traditional IRAs to Roth IRAs even if you have made a rollover within the same year.
  • You can convert a portion of the Traditional IRA into a Roth IRA but not just the nontaxable part.

Two Options Converting Traditional IRAs into Roth IRAs

There are two ways to move money from a Traditional IRA into a Roth IRA. You can rollover the funds yourself by taking a distribution from the Traditional IRA and rolling it into a Roth IRA within 60 days; or you can contact the bank or broker who manages your Traditional IRA and instruct them to transfer the money into a Roth IRA for you.

Whether you choose to rollover the funds or do a transfer, it’s necessary that you use the entire Traditional IRA distribution amount to fund the Roth IRA to avoid early withdrawal penalties and fees. You can’t decide to keep some of the money out as pocket cash or to take a vacation, for example.

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Homebuyer Tax Credit Extension for Military and Overseas Federal Employees

The 2010 Homebuyers Tax Credit’s April deadline has passed for the majority of first-time homebuyers and sellers – but there are some groups still eligible to qualify for the tax break.

If you are a member of the military, the Foreign Service or part of the intelligence community serving outside the US, you can still take the $8000 credit for first time buyers or $6500 credit for sellers and repeat homebuyers for an additional year.

The Original Home Buyers Tax Credit

homebuyer tax credit extensionAfter the Obama Administration extended the original Homebuyer tax credit from November 2009, the new guidelines required qualified purchases to include having a binding sales agreement in place before April 30, 2010 with a closing date set by June 30, 2010. Those who qualified for the tax credit had the option to include it on either their 2009 or 2010 tax forms. Those who did not meet those qualifications are no longer eligible for the tax credit.

Extension Plans

After the April 30th date, many hoped that the plan would be again extended to all people. The housing market was looking up again as so many took advantage of the tax credit and became first time homebuyers. Additionally, people were willing to sell their homes for a credit of $6500, helping the market to restabilize. Individuals that qualified for the credit had the option of claiming the credit on either their 2009 or 2010 return. In light of the better housing circumstances and because the government had more pressing issues to deal with, the extension did not come to pass.

However, those who are in service with the military or are employees of the federal government’s intelligence agencies or a member of the Foreign Service have to option of an extended tax credit. Those who are on extended duty outside of the United States for at least 90 days between December 31, 2008 and ending May 1, 2010. Those who are forced to return to the United States for medical reasons before fulfilling their original duties may qualify for a one year extension.

Extension Requirements

Eligible military or federal employees have an extra year to purchase a home in the US and still qualify for a credit. Contracts must be entered into by April 30, 2011 with a closing date of not later than June 30, 2011. Military and government personnel and their spouses are eligible for the credit if at least one of them has been serving overseas. Homes to be purchased can not exceed $800,000 and purchases must be made by someone at least 18 years of age.

To Claim First Time Homebuyer’s Tax Credit

In order to claim the tax credit, a copy of the properly executed settlement statement is required to be attached to the income tax return and Form 5405 First Time Homebuyer Credit and Repayment of the Credit needs to be completed.

For those who are purchasing new homes or mobile homes and do not receive a settlement statement, the following requirements apply:

  • Mobile homes – who include a copy of the executed retail sales contract showing all parties’ names, property address, purchase price and date of purchase.
  • Newly constructed homes – include a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.

For more information about the extension of the Homebuyer Tax Credit, visit the IRS website where you can also download appropriate tax forms.

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TheMilitaryWallet.com is not connected with the Department of Veterans Affairs or any government agency and is for informational and entertainment purposes only. The content on this site should not be considered professional financial advice. References to third party products, rates, and offers may change without notice. We may receive compensation through affiliate or advertising relationships from products mentioned on this site. However, we do not accept compensation for positive reviews; all reviews on this site represent the opinions of the author.