There are many myths about VA home loans–it’s easy to believe things that have been misunderstood and passed along as fact.

For example, people unfamiliar with VA home loans or other government loan programs such as FHA guaranteed loans tend to think that the VA or FHA is responsible for issuing the loans themselves. The reality is that VA home loans, FHA mortgages and similar programs are involved with insuring and guaranteeing the loans rather than issuing credit.

Another VA loan myth has to do with the disposition of the VA mortgage if the borrower dies. Some might believe that the VA loan guaranty is designed to pay off the mortgage should the borrower die before the loan has been satisfied, but this is not true.

According to the VA official site, “The surviving spouse or other co-borrower must continue to make the payments. If there is no co-borrower, the loan becomes the obligation of the veteran’s estate. Mortgage life insurance is available but must be purchased from private insurance sources.”

In other words, a VA insured mortgage is no different than any other financial obligation a veteran has; if the borrower dies his or her car payment, credit card bills, and yes, VA mortgage loan, would become the financial responsibility of the surviving spouse where applicable or the person’s estate.

The quote above mentions mortgage life insurance–borrowers should know this is not a requirement of the VA as a condition of getting a VA mortgage. It is an option available to the borrower from private sources should he or she choose to take advantage of it. It’s a decision left up to the borrower and like a VA home loan itself, plenty of comparison shopping and research should happen before you commit to such insurance.

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