USAA Mortgage Review

USAA has excellent customer service and extensive knowledge of VA loans. But if you want an FHA, USDA or conventional mortgage, you’ll have to look elsewhere.

J.D. Power Rating
5/5
Min. Credit
620
Min. Down Payment
3%
SimpleScore
3.8 / 5.0
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SimpleScore USAA 3.8
Perks 4
Credit Impact 3
Customer Satisfaction 5
Product Variety 4
Fees 3

USAA is one of the top lenders for VA loans, but it offers limited mortgage options and membership is only open to military service members, veterans and their families. If you’ve done any research into USAA’s VA home loans, you’ve probably realized that this lender doesn’t operate like your traditional mortgage lending institution. While not a credit union, you do have to become a member and take advantage of what it offers.

USAA was founded in 1922 and provides insurance, loans and bank accounts to military service members and their families. The company is highly knowledgeable about VA loans and provides great customer service. But while its VA offerings are top-notch, it doesn’t offer FHA or USDA loans and has stopped offering conventional loans due to the coronavirus.

Still, this lender has a lot to offer when it comes to VA mortgages, so it’s worth a look if you qualify for membership. You’ll want to get an idea of the whole picture to decide if this lender is right for you.

USAA at a glance

LenderLoan AmountAPR RangeTermsKey Benefit
USAA$50,000 – $3,000,0003.463% (30-Year VA Loan) – 4.873% (VA 5/1 ARM)15 – 30 yearsVA loans specialization

*Rates accurate as of August 2020

What we like about it

USAA is highly knowledgeable about VA loans and can help guide you through the complicated mortgage process. This lender also has a reputation for providing excellent customer service to its members. In both 2018 and 2019, it received a five out of five-star rating for customer satisfaction from JD Power.

USAA is also a great choice if you’re looking to refinance your current home. Its VA Interest Rate Reduction Refinance loans come with no origination fees. This lender will also cover many of the closing costs for you, including the appraisal, title and VA funding fee, which saves customers an average of $2,842.

Things to consider

USAA membership is limited to military service members, veterans, their spouses and their children. If you don’t qualify for membership, you won’t be able to borrow from USAA.

USAA also offers limited home loan options. It only offers VA home purchase loans, VA loans and conventional refinances. If you want an FHA, USDA or conventional purchase loan, you’ll need to look elsewhere. You may also have trouble qualifying for USAA’s loans if your credit score is below 620.

Another drawback of USAA is that it only has branches in a few locations around the country. You can complete the mortgage loan process online, but if you want to apply for your mortgage in-person, this lender may not be the best option.

What you need to know

USAA provides VA loans and VA jumbo loans with competitive rates to members. The APR for its VA loans starts at 3.463%. Additionally, it offers VA Interest Rate Reduction Refinance loans with rates as low as 3.511% for a 30-year term. You can also get a conventional refinance loan if you have an existing USAA mortgage.

As for loan amounts, USAA offers loans starting at $50,000 all the way up to $3,000,000 (through VA jumbo loans), allowing you to finance almost any home, big or small. It also offers a range of term lengths from 15 to 30 years and doesn’t charge you a penalty if you pay off your mortgage early. The only fee the company charges is the funding fee, which is required on VA loans by the Department of Veteran Affairs.

To apply, USAA offers an easy online prequalification process that allows you to get your rate in as little as five minutes. Once you find a home you love and sign a purchase agreement, you can complete your application over the phone.

The company will need a few financial documents from you during the home loan process, including your pay stubs, bank statements and tax returns, which you can upload to the secure online portal. If you’re applying for a VA loan, you will also need to provide a Certificate of Eligibility (COE) or other service-related documents. Once your application is complete, USAA generally takes between two and three weeks to evaluate your application and give you a final decision.

Collateral and criteria

USAA generally requires borrowers to have a minimum credit score of 620. If you have bad credit, you may not qualify for a loan. Since most USAA mortgages are VA loans, you won’t need to save up for a down payment. You will need to have enough cash reserves to cover closing costs like discount points and the VA funding fee, though, which usually costs between 0.50% to 3.30% of your mortgage amount.

USAA mortgages vs. the competition

Navy Federal Credit Union

Navy Federal Credit Union offers competitive rates and high customer satisfaction on its mortgage loans. Its loans provide a fantastic path toward homeownership for military members and their families.

J.D. Power Rating
5/5
Min. Credit
Not Specified
Min. Down Payment
0%
SimpleScore
3.4 / 5.0
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SimpleScore Navy Federal Credit Union 3.4
Perks 4
Credit Impact 4
Customer Satisfaction 5
Product Variety 3
Fees 1

Navy Federal Credit Union was formed in 1933 and currently has over eight million members. Its primary mission is to serve the military community through its financial offerings and provides competitive mortgage rates to members. It holds its headquarters in Virginia and is known for its top-notch customer satisfaction.

  • Navy Federal Credit Union is another lender that serves military service members and their families. It offers a wider variety of loans than USAA, including conventional and military choice. It also has lower rates — its VA loans have an APR as low as 3.224%, and its conventional loans start at 2.338%.
  • Navy Federal also offers a rewards program that gives you cash back for working with one of the real estate agents in its network. USAA used to offer a similar program but recently retired it. You’ll also get great customer service from Navy Federal. Just like USAA, it receives a five out of five rating for customer satisfaction from JD Power.
  • Navy Federal has lots to offer, so unless you’re a loyal member of USAA, its loans are worth considering for those who qualify.

Veterans United

In 2018 and 2019, Veterans United provided more VA loans by total volume than any other company on the market.

J.D. Power Rating
5/5
Min. Credit
660
Min. Down Payment
0%
SimpleScore
3.8 / 5.0
close
SimpleScore Veterans United 3.8
Perks 3
Credit Impact 3
Customer Satisfaction 5
Product Variety 4
Fees 4

Veterans United  is a company with experience working with VA loans and a company that has approved more people each year than any other company.

Veterans United is another leading VA lender. It offers VA loans with competitive rates starting at just 3.021%, as well as FHA and conventional mortgages. Borrowers gain access to 24/7 customer support, which has received a five out of five-star rating from JD Power for customer satisfaction.

If you have below-average credit, however, you may not qualify for its loans. Veterans United recommends a minimum credit score of 660. If your score is lower than that, you may be better served by USAA.

Need more help picking a mortgage lender? Learn how to choose the best mortgage.

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We welcome your feedback on this article and would love to hear about your experience with the mortgages we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.

Jessica Walrack

Contributing Writer

Jessica Walrack is a personal finance writer at SuperMoney, Interest.com, The Simple Dollar, and PersonalLoans.org. She specializes in taking personal finance topics like loans, credit cards, and budgeting, and making them accessible and somewhat fun.