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!
Can't let you have two borrowers on same loan
Have been working with a USAA lender. The original call was specific. Myself and my dad on the same loan for a home as co-borrowers/co-owners. He would move to Oregon right after closing. After the initial call, we conversed via email only (except when I called in the end).
In the email, it was summarized. I live in Oregon, my dad in Texas, and as soon as we got a house he would be moving to Oregon and that I had no place for him until then. On the initial call, this was fine.
As soon as we started delving into the particulars of the loan, i.e. DTI, income, school loans etc., things started changing.
It was an act of Congress to simply get my question of "if you don't have pmi then who pays that PMI? Does my interest rate increase?" That took almost two weeks to answer. That in itself raised a red flag on timeliness and transparency.
Then right before we went to pull credit, the news was sprung on me that only my income would be counted, not my dad's. "Why would we co borrow if his income wasn't counted?" "Well, so you both could be on the loan" was the answer. Why put someone on the loan when you weren't counting his income and why run his credit when he wasn't going to be listed as a true co-borrower, not a cosigner.
Then the whammy answer, "we cannot include your dad on the loan because he won't be living in Oregon at time of close." "Well, didn't we go over this in the beginning?" "Yes, but I looked into our policy further and he must live in Oregon."
At this point, I strongly said "you do not pull my credit."
I called and pretended I was a new potential client and was told that without my USAA number they could not help me or give me answers for a potential home loan.
Yeah, you know what, screw this, some other lender has my home loan now, with my dad as co-borrower, co-owner and we close on Memorial weekend, and in September, he moves to Oregon.
This experience has made me shy away from having any of my accounts with USAA to include my auto insurance, in which they told me that since I got a speeding ticket of less than 10 mph over the limit that I lose all discounts for 5 years. The only ticket in many, many years! They also did this more than a year after my ticket.
Their insurance is now a $92 increase a month. I pay more than $200 a month for one car, one ticket, good credit.
I've always liked USAA but now, between bad home lending information, timeliness on answers, changing answers and now the auto insurance, I'm walking away.
Bottom Line: No, I would not recommend this to a friend
0 out 1 people found this review helpful
Just closed my VA loan with USAA and the experience was smooth as glass. If you have all of the information in order and don’t require any special treatment, a VA loan via USAA is the way to go.
Bottom Line: Yes, I would recommend this to a friend
3 out 3 people found this review helpful
Painfully long process
I am still in the process of attempting to close on my refinance through USAA. It's been 2 months now, with USAA continually putting their hand out for more money to extend the rate lock.
At the beginning, they sent me a list of services I could shop for, one being a title company. I specified a local title company at the very beginning, but USAA did not honor my request and instead selected their own third-party vendor. I paid $525 up front for an appraiser of their choosing. My home appraised for double the amount we are seeking to borrow, but they wanted a new survey and required me to parcel a portion of my land because my 90-year-old mother lives in a mobile home on the property. This caused a delay and resulted in three extensions for the rate lock at $148 each, plus $1299 to the surveyors.
Additionally, they required me to put a railing around the deck on my home for a deck that is maybe 2 feet off the ground. That cost me an additional $500 in materials. Then, their closing agent/title company required a new inspection to make sure the repair was done. We were on track to close last Friday until the closing agent decided they wanted a new appraisal because we parceled 4/10 of an acre.
But, the absolute worst thing they did was lie to me and say that the original appraiser was out of his office for an extended period of time and the only other appraiser they could find could not come out for 2 weeks and it would cost me $900 for a new appraisal. I had the phone number for my original appraiser and personally called him. Surprise! He was willing to come the following day and called his contact with the 3rd party vendor to request the work order.
USAA attempted to continue their deception by declaring they were able to get my appraiser the next day. I quickly corrected the processor on this and demanded to speak with the supervisor. Of course, the response has been unsatisfactory, and they continue to insist they have acted within the confines of the law. However, it will cost me an additional $148 to extend the rate lock an additional week.
USAA is bleeding me dry, and if I hadn't already sunk so much time and money into it, I would pull the plug on the whole deal. I've already made it clear this is absolutely the last time I extend even though interest rates have already gone up and I am considering backing out of it anyway and going to a small local bank. I absolutely would NEVER go with USAA again.
Bottom Line: No, I would not recommend this to a friend
1 out 1 people found this review helpful
I have a mortgage with USAA that requires an escrow for taxes and insurance. I also have a son with leukemia, and for that I need flexibility at times with my bills. I called them in hopes of getting overage in my escrow account paid to my loans principle and reassessing my mortgage payments. Not a huge difference in my monthly payment, but sometimes an extra 50-75 dollars a month DOES make a difference in hard times. I have always paid my creditors on time and want to continue to do so even with my son's leukemia.
I found out they paid my taxes and will not pay my insurance even though it is also through them until the end of the year (about 35 days from now). I have requested that they pay my insurance early and apply any remaining overage in my escrow to my mortgage principle to reduce my monthly payments once applied and re-evaluated. They will NOT pay my insurance early or reassess my monthly payment until 12/31/17.
n their decision, people are screwed over by paying more than they would have to in interest and monthly payments than if they had done as I requested. It seems they are more interested in screwing customers over and making extra money than helping them continue to afford their mortgage in rough times.
Bottom Line: No, I would not recommend this to a friend