The United States government offers many benefits to veterans and service personnel; VA home loans are one of them. VA home loans can be used to purchase a new home or refinance an existing home mortgage. These loans are available to all honorably discharged veterans and active duty military personnel.

The Department of Veterans Affairs (VA) does not actually lend out money, but they guarantee or assure the funds that are loaned to a veteran by a VA-accepted financial institution. A veteran can go to any bank or advance company that participates in the VA loan program to apply.

The VA home loans offer several advantages over a straight home loan. One of the most important advantages is that VA loans do not require a down-payment. As of January 1, 2006, you can buy a home for up to $417,000 without any down-payment. While there are some no down-payment home loan programs in the market, you will have to pay a higher interest rate for obtaining the benefit. You pay the same market rate whether you are making a 10% down-payment or $0 down-payment. In addition, you will find that in most cases, the VA interest rates are similar to or even lower than conventional loan rates.

VA home loan members also enjoy the luxury of not having to pay advance insurance. In contrast, with a standard loan you will have to pay advance insurance if you put down less than 20% as a down-payment. Advance insurance can add a significant amount to your monthly payment, so not having to pay this is really a plus to borrowers who use their VA loan benefit.

The aim of the VA home-loan program is to help veterans finance the purchase of homes with favorable loan terms and at a rate of interest that is comparatively cheaper than the rates charged on other type of mortgage loans.