Veterans Affair mortgages or VA loans are mortgages guaranteed by US Department of Veterans Affairs which is a state-run organization. Under this scheme, the veterans or their surviving spouses are eligible for a mortgage loan for the purchase of a property with no down payment.

Angus Reed , an expert in real estate finances gave us some information about the program. The state department is itself not the lender, the loan is provided by a private lender which is guaranteed by the state department. Here are some basics of VA loans you need to know:


People who can apply for this loan are the veterans who meet the minimum number of days of service requirement. Although there is no such minimum credit-score requirement for getting this mortgage, most lenders require a score of at least 620.

Members of active-duty usually qualify for this after just about 6 months of service. Reservists and members of the National Guard can apply after 6 years of their service. If they are called to active service before this period, they gain eligibility after 181 days of their service.

It is noteworthy that if you have served the nation on any foreign soil, you are likely to get eligible sooner. Borrowers need to file a form online and get their eligibility certificate.

Benefits And Fees

One obvious advantage of getting a VA loan is that you don’t need to pay any down payment. The other advantage is, you don’t need to require any mortgage insurance. This results in monthly savings because of mortgage insurance alone.

The fee that you need to pay to get the loan is 2.15% of the loan amount if you’re a first-time borrower for Military Veteran and 2.5% if you’re from Reserves/National Guard. This fee is reduced to 1.25% and 1.5% respectively if the borrower pays 10% of the loan amount as a down payment.

Angus Reed – co-founder of Lyons Capital Pty Ltd , added that this scheme has really proved to be beneficial for the veterans which is the reason why it has been in demand lately.