VA loans: How do they work, and who is eligible? - Business Insider

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VA loans don't require a minimum down payment, and they charge lower interest rates than most types of mortgages

. You won't apply directly through the VA — you'll apply through a private lender, just as you would with most other mortgages. The VA is in charge of compensating the lender should you fail to make mortgage payments. This makes giving a loan less risky for a lender, so it can offer mortgages with no down payment and better interest rates.

You aren't limited to getting just one VA loan in your lifetime. If you either a) sell your home and pay off the loan, or b) sell your home to another veteran who takes on the VA loan, you can get another VA loan. If you completely pay off your mortgage and move later, you are limited to one more VA loan to buy another home, as long as the new home will be your primary residence.You must be associated with the military to receive a VA loan, but there are a few restrictions.

You're a spouse of a military member who died in active duty or in another military-related incident.You don't necessarily need to have your Certificate of Eligibility in hand when you apply. The lender should be able to look up your COE electronically to check whether you've served enough time to qualify.

 

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