Final answer:
The guarantee made by the VA on a loan of 100% of the estimated value of the property will cost the borrower nothing.
Step-by-step explanation:
The guarantee made by the VA on a loan of 100% of the estimated value of the property will cost the borrower nothing.
When the VA guarantees a loan, it means that the VA promises to repay a certain portion of the loan to the lender if the borrower defaults on the loan. This guarantee reduces the risk for the lender, allowing them to offer better loan terms to the borrower, such as a lower interest rate or no down payment requirement.
In this case, the VA is guaranteeing 100% of the estimated value of the property, which means that if the borrower were to default on the loan, the VA would repay the full amount to the lender. Since the borrower is not responsible for repaying the VA for this guarantee, it does not cost them anything.