VA loan
VA loan stands for veteran affairs loan and is also called GI loan. It is the kind of a mortgage loan in the United Stated that is guaranteed against default by the Veterans Administration. The VA loan was designed to give long-term financing specifically to United States military personnel, who are active, discharged, and veterans or their surviving spouses, only if they do not remarry. VA loans do not require down payment and offer lower interest rates than conventional loans.
There are several benefits to VA loans. For instance, if the VA loan has been paid off and the property has been sold, home benefit eligibility can still be restored for future use. Moreover, the VA offers a one-time only bonus. This eligibility can be restored if a prior VA loan has already been paid in full and you still own the property.
The general rule is that all loans insured by the Department of Veteran’s Affairs be used only to acquire a primary residence. It is still possible to buy another home using the VA loan guaranty. It is a matter of semantics. As in various cases regarding the use of real estate, the definition of primary residence is where you live “most of the year.” In this case, if you use your home more than six months out of a year, then it can be defined as your primary residence.
It is good to remember that the law was not meant to help people enter the real estate business to buy lots of homes. The law was established to help people afford the home they will be living in. In such case, a VA loan can help buy that next home or retirement home that can be considered vacation home since in their retirement years, people often spend more time in their vacation home. The one requirement is that you have to move into the home in a “reasonable” amount of time so that it becomes your primary residence.
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