VA Loans or, Veteran Loans, are loans issued by major lending companies to American war veterans and their spouses. The VA is an abbreviation for the US Department of Veteran Affairs, a branch of the government which sole purpose is to help American war veterans start a normal life immediately upon returning home. These loans were designed and issued in order to give veterans an opportunity to borrow money at a better rate than normal and to get that money insured.
Historically, VA loans started in 1944 after World War II, but are more commonly known as the "GI Bill" or the Serviceman's Readjustment Act. This loan provided funding for college educations, new businesses, and new homes for all the people returning from the war. The large government lending created a strong boost for the American economy just a decade after the great depression and helped build one of the strongest nations today.
This borrowing process is still very popular with modern day war veterans but is more heavily focused on home mortgages and home improvements. VA loans of up to $ 417,000 for homes can be issued with no down payment, and just over a 2% VA funding fee for first time homebuyers. The insurance on loans provided by the VA is up to 41% of the borrowers monthly income.
One of the benefits of getting a home loan as opposed to borrowing money through a credit card is the equity homeowners acquire. This home equity can also be borrowed on in order to pay off credit card debt, which charges much more interest over time.