USAA Mortgage Loans Review: Rates, Fees, & Pitfalls

USAA Mortgage Loans Pros and Cons

Finding the right VA mortgage lender and going through the process can be confusing.  To help you make a more informed decision on your choice of lender, we’ve listed some of USAA’s benefits and drawbacks below:

Pros:

• Sleek online interface
• Plenty of experience with veterans and VA loans
• Best in class customer service
• Plenty of low or no money down loans

Cons:

• Only military members, veterans, and their families can bank with USAA
• Federal Housing Authority (FHA) and US Department of Agriculture (USDA) loans are not available through USAA
• You can only get a USAA conventional loan through a refinance
• Incredibly limited footprint in terms of physical branches

USAA Mortgage Overview

Since its earliest days, USAA has been an advocate and profound supporter of the military community, veterans, and relatives.

Its mortgage vertical is just another sign of the bank’s unwavering commitment to America’s soldiers, sailors, marines, and coastie’s.

Offering various mortgage loans, USAA is arguably the best place for those who qualify to apply for a mortgage.

What Types of Mortgages Does USAA Offer?

As we mentioned before, USAA’s specialty is, of course, the VA loan. However, VA loans aren’t the only type of loan that they offer. They also offer VA Jumbo loans and mortgage refinancing.

Additionally, they have designed a few programs to help their customers reach their dreams of homeownership.

The VA Interest Rate Reduction Refinance Loan (IRRRL for short) is a type of refinance loan that waives all mortgage origination fees, along with the VA funding fee and title and appraisal fees.

Additionally, USAA also has a mortgage known as their Conventional 97 Loan.  This mortgage is designed to be their alternative to an FHA loan.

The Conventional 97, also known as their “first-time homebuyer loan,” allows you to get the low-down-payment benefits (you can put as little as 3% down) of an FHA loan without having to deal with the associated hassle.

USAA Mortgage Loan Qualification Requirements

USAA is a bit unique with its qualifications because they don’t accept you as a customer unless you are a military member, veteran, or a family member of a military member/veteran.

Unfortunately, this makes a significant amount of the population ineligible for a USAA mortgage.  However, if you are eligible, then chances are that you probably meet the criteria for a VA mortgage.

USAA Mortgage Rates and Fees

Much like any other big bank, USAA publishes its mortgage rates on its website. While you can’t get a rate quote tailored to your situation online, you can call them up on the phone to request a quote.

When it comes to the rates their charge for their mortgage products, USAA is a good bit higher than their competition.

It is important to remember that USAA doesn’t charge any origination fees with their mortgages.

This upfront cost savings has the potential to offset any difference in rate but be sure to do the math to be sure!

>> More: Compare the Best VA Mortgage Lenders

Refinancing Mortgages with USAA 

Refinancing your mortgage is easy with USAA, and they’ve also designed helpful programs like the VA Interest Rate Reduction Refinance Loan to help customers reduce the interest rate on their existing mortgage.

USAA Mortgage Loan Features and Benefits

Aside from some of the unique mortgage options they have, USAA prides itself on the fact that they don’t charge any origination fees for their mortgages.

These fees are often very expensive and can eat into a home buyer’s savings, but luckily, USAA doesn’t pass these fees on to their customers.

Get Preapproved Beforehand

Like most other online mortgage lenders, USAA makes the preapproval process quick and easy. All you must do is enter some basic personal and financial details, and USAA can preapprove you for a loan in just a few minutes.

Available USAA Mortgage Loan Officers

Although USAA only has a handful of physical branches, they have a team of loan officers that you can talk to on the phone if you desire.

Phone lines are open from 8 a.m. to 11 p.m. EST Monday through Friday and from 9 a.m. to 8:30 p.m. on Saturday.

Great Customer Service

Since USAA’s client base is very select, they can uphold a customer service standard much higher than that of other big banks.

Additionally, their limited physical footprint also drives them to have stellar customer service. Their phone lines are open Monday through Friday to assist clients with any questions, and their mobile app and website have a helpful chat feature that is available for use 24/7.

Years of Experience Serving the Military Community

The mission of USAA is to facilitate the financial security of its members, associates, and their families through the provision of a full range of competitive financial products and services.

Ever since its inception in 1922, USAA has been committed to serving the men and women who serve our country.

>> More: How to Apply for a Mortgage

How Does USAA Compare to Other Mortgage Lenders?

Now that we know all about USAA and what they stand for, let’s see how they stack up against some of their competitors.

Below we’ve compared USAA to some of our favorite mortgage providers with the hopes of helping you make a more informed decision.

#1. USAA Mortgage Loan vs. Veterans United

If you’re looking for a mortgage from a broker that supports our country’s veterans, then you’ve likely come across Veterans United.

They are the largest VA home loan lender in the entire country. However, that is not all they do!  Veterans United also offers a suite of conventional, adjustable-rate, FHA, and USDA loans.

So, if you’re a veteran that’s looking for a non-VA mortgage, then Veterans United is probably worth a look!

Much like USAA, Veterans United doesn’t offer home equity loans or lines of credit, but they do offer refinances.

They also have a small physical footprint and some slightly higher than average credit requirements and rates.

#2. Rocket Mortgage vs. USAA

Much like USAA, Rocket Mortgage is a large, popular online mortgage broker. With Rocket Mortgage, every step from preapproval to closing and everything in between is done online.

They also have a much broader spectrum of mortgage products to offer. With Rocket, you can get a conventional mortgage (without refinancing), adjustable-rate mortgage (ARM), Federal Housing Authority loan (FHA), jumbo loan, or VA loan.

However, they are geared more towards a general home buyer, meaning they don’t necessarily have a niche customer base, like USAA.

When you’re working with USAA, you can rest assured knowing that you are working with a seasoned VA loan professional.

>> More: Rocket Mortgage Review

#3. Freedom Mortgage vs. USAA Mortgage

Freedom Mortgage is another mortgage provider whose mission is to help support the troops. Much like USAA, they have a robust VA loan program that caters to veterans all across the country.

Their mortgages are available in all 50 states; however, they don’t have nearly as many physical branches as Freedom mortgage.

One of the major differences between USAA and Freedom Mortgage is that Freedom Mortgage offers much more than VA loans.

They also offer conventional, FHA, and USDA loans, which is likely very appealing if you are a veteran that’s not looking to get a VA loan.

>> More: Freedom Mortgage Review

#4. NASB Mortgage vs. USAA

Much like USAA and Freedom Mortgage, North American Savings Bank (NASB for short) is another mortgage broker that looks to serve the men and women who served our country.

They offer a wide range of mortgage options, including conventional mortgages and refinances and VA and FHA mortgages.

Where they really shine is when it comes to the rates they offer. NASB’s rates are competitive and incredibly transparent, which is an incredibly important factor when you’re shopping around for a mortgage.

Their online services require some updating, though, as you can’t track your mortgage process online.

>> More: NASB Mortgage Review

USAA Mortgage FAQs

When you’re going through the home buying process, you will undoubtedly have a myriad of questions.  To put your mind at ease, we’ve answered some of the most asked questions about USAA mortgages below:

Is USAA a Good Choice for VA Loans?

Since USAA deals almost exclusively with VA loans, they are one of the best mortgage brokers out there if you’re looking for one! Few mortgage lenders know VA loans better than USAA, which is important if you’re looking to use one.

VA loans are a bit different than conventional loans, so it’s key that your broker is experienced with them.

The last thing you need is an inexperienced broker making a mistake with your mortgage and delaying the process.

How Do USAA Mortgage Rates Compare to the National Average?

As we mentioned before, you will likely pay a bit of a premium when you’re working with USAA. Their rates are a good bit higher than their competitors and the national average. However, it’s important to remember that you won’t be paying any origination fees with USAA.

Does USAA Offer Mortgage Refinance?

USAA does offer mortgage refinance products; however, they do not offer second mortgages (home equity loans) or home equity lines of credit (HELOCs).

This means that if you want to leverage the equity you have in your home, you will have to go through the entire mortgage process all over again.

What Credit Score Do You Need for a USAA Mortgage?

USAA has a minimum credit score requirement of 640.  This is quite a bit higher than what most other big banks are looking for.

This means if your credit could use a little work, you might want to look elsewhere for your mortgage.

Does USAA Charge a Mortgage Origination Fee?

When applying for a mortgage through USAA, you won’t be charged an origination fee.  However, you will have to pay a VA funding fee, typical for most VA loans.

However, if you are looking to truly put no money down, you can typically finance this fee by rolling it into your mortgage.

Bottom Line: USAA Mortgage Review

If you’re looking for a VA mortgage, then USAA is a great option. If you’re familiar with VA loans and the home buying process, then you might want to look elsewhere since their rates are higher than the national average.

However, if you’re a first-time home buyer and you want to be walked through the home buying process by a team of experienced professionals, then USAA might be the right choice for you.

No matter where you fall on the spectrum of home buyers, you can rest assured knowing that USAA knows what they’re doing when it comes to VA loans. Additionally, they have robust systems built out that make the online application process a breeze.

You can be preapproved in just a few minutes, uploading documents can be done in a snap, and when your closing time rolls around, all your documents can be e-signed from wherever you are.

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