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VA Loan Repayment Plans

Learn about the available VA Loan repayment plans for your mortgage.

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Available VA Loan Repayment Plans

There are a few repayment options available to qualified individuals who choose to borrow a VA loan. Individuals can consult with their lender upon approval to determine which repayment plan is most suitable to their specific needs.

One repayment option is called Traditional Fixed Payment. With this plan, the borrower will make equal monthly payments for the entire term of the loan until it is paid in full. A portion of each monthly payment will go toward reducing the principal owed as well as accrued interest.

Another option for repayment is called Graduated Payment Mortgage, or GPM. With this plan, the monthly payments start low for the first few years of the loan and gradually increase each subsequent year. The initial payments are made lower by taking a portion of the monthly interest that is due and adding to the principal balance of the loan. This continues until the end of the "graduation period" at which time larger equal monthly payments are made for the remainder of the loan term.

The remaining VA mortgage repayment plan is known as Growing Equity Mortgage, or GEM. This option allows for equal monthly payments to be made each year, where every year the amount of the monthly payments will increase. The annual increase in the monthly payments of the loan will all be applied to the principal balance owed. With this plan, the loan will be paid off early, typically in about half the time of the loan term.

Each of these options are available to qualified borrowers of a VA loan. It is important to carefully consider your financial situation and the repayment options available to choose the plan that is most suitable to your particular situation. Consult with your lender about the repayment options and which option is best for you.