When it is time to sell your house that has a VA loan associated with it, you primarily have two choices. The first is to have the new owners "assume" the loan. That means take over the payments with minimal costs involved. However, there are some significant downsides to this option. Mainly, you cannot get your VA entitlement restored as long as that loan is outstanding. This applies even if you no longer own the house. In other words, if you think you might one day buy another house with a VA loan this will be a bad option.

Most people will sell the house and payoff the existing loan at closing. The biggest advantage for this is you can have your VA entitlement restored and are free to use it again.

The 3rd option is if you sell to another veteran and have their entitlement take over the loan. This rare occurrence can help you get the benefits of both of the previously discussed options.