John uses the VA home loan to purchase property. his mortgage is $200,000. then, two years later, john defaults on his loan. The VA will reimburse the lender $200,000.
A loan is a form of debt incurred by an individual or other entitry. The lender-usually a corporation, financial institution or government- advances a sum of money to the borrower.
In return the borrower agrees to a certain set of terms including any finance charges, interest, repayment dates, and other conditions.
In some cases, the lender may require collateral to secure the loan and ensure repayment.
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