Debt Ceiling Debate Could Impact Veterans' Benefits

Debt Ceiling Debate Could Impact Veterans' Benefits

For most Americans, the recent debate over raising the federal debt ceiling could seem insignificant. Still, the outcome could have a severe impact on the lives of active-duty troops, veterans and their families.

As a government entity, the government can only accrue debt of a specific size. According to financial sources, there are currently 28.4 trillion dollars in the global economy. Last week, a statement stated that "extraordinary measures" had been taken to keep those debts below the $1.5 billion figure, but that resources were getting exhausted.


The mortgages that are backed by VA also do not need to be insured by PMI. An applicant for a conventional loan must either pay a 20% down payment or purchase Private Mortgage Insurance (PMI). If PMI isn't mandatory, the VA may still require a small funding fee to cover operational expenses.


An essential advantage of VA loans is that they do not require you to have a high credit score to qualify for them. In addition, these benefits are also available to those applicants who may have previously had their home foreclosures experienced.


Even though private lenders offer VA loans, the department ensures that the interest rates are the lowest available. As part of the mortgage, the VA guarantees a significant amount of money to the lender if the borrower defaults. As a result, lenders can offer lower-interest loans.

In conjunction with the risk of higher inflation, the debt ceiling limit has been the subject of ongoing debate, which has contributed to yields of upwards of 1.52 percent of US Treasuries as of 30 September 2021. During 2011 and 2013, when a similar discussion took place, the treasury yields had seen a spike similar to the current one.