How Long Do I Have To Pay Back A VA Loan?

When you decide to use a VA Loan, you may be excited about the prospect of buying a home without having to pay a huge down payment. In fact, the VA Loan does not require a down payment at all. This means that you can buy a home without paying anything out of pocket. Closing costs, if they are not covered by the seller, can be rolled into your mortgage.

But within a couple of months, that first mortgage payment comes due. Hopefully, you have worked out with your lender before your final loan approval what that amount will be and you are ready to start making payments. Soon, you may be wondering just how quickly you can pay off your VA Loan.

Understanding Loan Terms

Most home loans, including the VA Loan, are available in 15- and 30-year terms. Many people take out a 30-year mortgage but 15 years is also not unheard of. Some people opt for the less common 8-year mortgage. As long as your lender agrees to the terms, you can use a VA Loan for just about any length.

If you decide on the most common term, which is a 30-year fixed-interest rate mortgage, you have 30 years to pay off the loan. Your lender will determine the minimum monthly payment required to repay the loan in those 30 years. That becomes your monthly mortgage bill. That amount can go up or down slightly based on changes in taxes or insurance rates.

If you make extra payments toward the principal amount of your loan, it can shorten the length that it takes you to pay back the VA Loan. Even small extra payments can make a big difference, especially in the beginning. Each time you lower the principal amount, the interest is recalculated and goes down. This means that you pay less in interest as you pay down your loan. You can see how each additional payment impacts your loan using an amortization schedule, which can be generated by your lender.