About USAA Mortgage
USAA Mortgage provides four different home loan products for active and former military members and their families, including former spouses of USAA members and cadets or midshipmen.
According to the company, they’ll be there for you every step of the way, including when you first choose to pre-qualify for a loan online.
As a homebuyer, you probably recognize that there are hundreds—perhaps even thousands—of different loan options available to you. But as a member of the military, is there anything unique that USAA Mortgage delivers?
After spending a few minutes reading what we learned during our research, you should be able to answer this important question—and many others!
How Does a USAA Mortgage Work?
In a nutshell, the USAA Mortgage lending process works over five steps:
Step 1: Pre-Qualify for a Home Loan
Here, you’ll be able to gain a better understanding of your budget, which will help you know where to look and to better negotiate with sellers when you find the right property.
USAA Mortgage will also ensure that you know what to expect during the application process, before finally handing you a pre-qualification letter and to-do checklist (assuming you meet their underwriting criteria).
Step 2: Find a Real Estate Agent
Now that you have a pre-qualification letter, you’ll be in a position to negotiate a purchase contract. First, though, you’ll need a real estate agent.
To accomplish this, you’re more than welcome to find one on your own, although if you work with an agent through the USAA Real Estate Rewards Network, you can get a $350 to $6,000 reward when you buy or sell your home.
Important note: Keep in mind that in order to qualify for the $6K, you’d have to buy or sell a home for $1,000,000+. On average, USAA tells us that the average Real Estate Rewards Network client earned $1,150 in 2015.
To take advantage of the Real Estate Rewards Network, you’re not required to be a USAA Mortgage customer (although you will need to be a USAA member).
Step 3: Search and Make an Offer
Now is the fun part! Here, you’ll get to shop for the home of your dreams, negotiate an offer, and sign a contract.
Step 4: Prepare and Review Documents
Now that you’ve decided on a property, you’ll need to collect and submit required documents, “such as pay statements, bank statements and tax returns, along with your application packet.” Once received, USAA Mortgage will review your documents and keep you updated throughout the process.
During this step, you’ll lock in your interest rate, be assigned a mortgage processor, and have an appraisal completed on the property.
USAA Mortgage notes that it’s important to respond quickly to requests for additional information (if needed) to ensure the process goes as smoothly as possible.
Step 5: Get Ready to Close
Finally, you’ll prepare for closing by reviewing your closing disclosure, signing closing documents, and paying any closing costs you’re responsible for. This can be paid either via a certified check or wire transfer.
Speaking of your costs…
What Types of Loans Does USAA Mortgage Offer? What Are the Rates & Fees?
Overall, USAA offers four different loan programs (these include Jump loans ($417K+) and those for second/vacation homes).
Keep in mind that what’s listed here doesn’t include standard fees like a VA funding fee (will be calculated as a percentage of your loan amount), mortgage insurance (if your down payment is less than 20%), points, and closing costs.
USAA Mortgage’s VA Loan provides 100% financing for veterans and active-duty military members, without a down payment. On top of this, you’ll be able to roll the funding fee into your loan amount, and no mortgage insurance is required.
USAA’s VA Loans are available in 15 and 30-year terms, with interest rates ranging between 3.25% and 3.5% at the time of our research. Points ranged between -0.625 and 0.5.
Important note: Remember that any numbers advertised on the USAA Mortgage website are based on a very specific set of criteria (e.g. a particular loan amount, credit score, state of residence, etc.). So, unless you match these criteria, your rates might vary.
Comparatively, USAA Mortgage tells us their Conventional 97 program provides down payments as low as 3%, with the lender paying any private mortgage insurance.
However, Conventional 97 loans are only available in 30-year terms and can only be used for primary residences. Rates were around 4.3% at the time of writing.
Even if you’re not a member of the military, the Conventional Loan program through USAA Mortgage can get your down payment as low as 5%, with 10, 15, 20, and 30-year terms available. If you put less than 20% down, you will be required to pay PMI.
During our research, we found Conventional Loan rates between 2.75% and 3.625%.
USAA Mortgage Loan Refinancing
Whether you’re looking to lower your monthly payment, cash out some equity, or reduce the term of your loan, USAA Mortgage offers two different refinance programs.
Their VA Interest Rate Reduction Refinance Loan (VA IRRRL) comes with no origination fee, less/simpler paperwork, and lower closing costs. This way, we’re told Members save an average of $2,700.
You’ll also be able to refinance up to 100% of the value of your home, choose between 15 and 30-year terms, and fixed rates at 3.125% and 3.375%, respectively.
On the other hand, USAA’s Conventional Home Refinance Loan allows you to cash out between 80% and 95% of the value of your home, depending on what you’re looking to accomplish with the money.
Conventional Refinance Loan customers can choose between 10-, 15-, 20- or 30-year terms, with interest rates that ranged between 2.875% and 3.875% at the time of our research.
Still have questions? You can speak with a USAA Mortgage loan officer at 877-865-8839.
The Long & Short of USAA Mortgage Reviews
While there weren’t any star ratings involved, 995 USAA Mortgage customers had left reviews on the company’s website at the time of writing. Scrolling through the first couple dozen, several phrases were frequently repeated:
- “Worst experience of my life.”
- “Terrible/bad customer service.”
- “Horrible experience.”
- “Waste of time.”
Elsewhere online, USAA Mortgage had 274 customer reviews and a 1-star average rating on Consumer Affairs. There, most complaints appeared to reference long, confusing processing times and less-than-stellar service.
Based on seven reviews, USAA Mortgage seemed to have a slightly better average rating of 2.3 stars on LendingTree.com, where more than one customer reported a pleasurable experience. Among those who complained, common points related to being turned down for loans and inattentive customer service.
How does this compare to USAA Mortgage’s competition?
Are There Other Military-Focused Lenders Competing With USAA Mortgage?
The reality is that most national lenders offer some type of VA loan program, so USAA Mortgage certainly isn’t unique in this aspect. However, if you’re dead-set on a VA loan, Military Times recommends only looking for one that’s approved by the VA.
Even though these lenders offer VA loans, keep in mind that no two will have the same underwriting criteria, which revolves around a unique mix of credit score, loan amount, term, and lender’s fees.
With this in mind, although USAA (as an organization) has been serving veterans and their families since 1922, perhaps the company’s biggest competition is NewDay USA, which offers many of the same perks and programs.
As mentioned above, though, if you’re looking to score the lowest rate, along with fees and other costs that fall within your budget, you’ll want to continue exploring other non-military mortgage providers as well. Don’t forget to investigate some of the new peer-to-peer lenders like SoFi, Upstart, and more!
Let’s carry these thoughts over to the next section as we wrap up our review.
Is a USAA Mortgage Right for You?
Based on what we just discussed, we can see that when it comes down to it, no single lender will meet everyone’s needs. And for that matter, not every applicant will match every lender’s underwriting criteria.
As a result, USAA Mortgage might be an ideal fit for you, while not meeting your neighbor’s needs as well as some of the company’s competition. This is something we can see firsthand in USAA Mortgage’s online customer feedback.
And while their overall rating might initially appear low, it’s important to keep in mind that USAA Mortgage has originated hundreds of thousands of loans for customers, many of which seem satisfied (or, at least not dissatisfied enough to write a negative review), so there’s no certainty that you’ll experience the same.
Did you apply for a USAA Mortgage loan? How’d the process go? Were you approved? Tell us all about it by writing your review below!