What is a VA Loan?

A VA loan is an umbrella term for a loan that is given specifically to a veteran of the United States Armed Forces. These loans are usually to help individuals who are returning from active duty to purchase a place of residence, usually their first place of residence. The VA program has a history of helping veterans find homes for themselves since after World War II.

There are many advantages to a VA loan that other types of borrowers do not receive. Below are just a few of the advantages that veterans can expect from the VA loan program.

1. Veterans can expect a much lower interest rate from a VA loan. Because of the scaled income of veterans of the armed forces, it is almost impossible for a soldier who was returning from active duty to match a current income to the current housing market. To compensate for the money that an active-duty soldier could have made in the private sector, the government offers lower interest rates on VA loans. These interest rates are usually substantially lower than loans for the average citizen. They extend over the life of the loan and do not function as an introductory program as many low interest rates do for regular real estate.
2. Veterans have longer to pay back their loans than other types of borrowers. The term period of VA loans is much longer Dan normal residential loan package. This means that a soldier who was returning home from war has many years more to pay back the total value of the money borrowed from the private lending institution giving the VA loan on behalf of the government.
3. The VA program has many special benefits such as first month mortgage payment forgiveness. Depending on the type of VA loan that is taken by a veteran, there can be many different incentives on top of a lower interest rate and longer term period. These incentives can include full holidays from mortgage payments during certain months or a "look the other way" clause on late payments from a veteran to a certain extent.