USAA Mortgage Review for 2020

USAA has a sterling reputation as a mortgage lender, with competitive rates and fees and top customer satisfaction scores. But it's only available to eligible military members.

Lending flexibility 3.0
Customer service 5.0
Ease of application 4.5
Online experience 4.5
Minimum down payment 0%
Minimum credit score 620
Loan Products Offered

VA mortgage
Fixed-rate mortgage
Adjustable-rate mortgage
Jumbo mortgage
"First-time homebuyer loan"

Best Features

  • Sterling customer satisfaction
  • Low- and zero-down payment loans
  • Serious expertise in VA mortgages

Drawbacks

  • No FHA or USDA loans
  • Very few brick-and-mortar branches
  • Won't consider "alternative" credit information for qualification

Overview

USAA was founded in 1922 by just 25 military officers who wanted to insure each other's vehicles. Now, it has expanded outside of insurance and serves 12.4 million members nationwide.

When it comes to mortgages, USAA does a great job. Given its focus on military membership, USAA is an expert in VA loans. But it does provide other options, too — like a first-time homebuyer program and vacation and investment property financing.

It also has an unbeatable reputation for customer service.

And unlike many lenders, USAA continues to service (manage) the loans it originates after closing, so you can continue to enjoy its high service levels for the foreseeable future.

Despite these other perks, USAA's rates and fees aren't noticeably lower than other major lenders. But remember, rates vary a lot from person to person.

You'll have to get a custom rate quote to see how your own rate and closing costs from USAA compare.


Compare USAA mortgage rates

VA mortgages typically come with lower rates than most loan types. And you don’t have to pay monthly premiums for mortgage insurance.

So USAA already has a head start when it comes to rates and costs, assuming you qualify for a VA loan.

30-year fixed VA mortgage rates at major lenders

 
USAA Mortgage
Wells Fargo
Quicken Loans
Average 30-Year VA Rate, 2019
3.85% 3.68% 3.88% 3.56%
Monthly P&I Payment*
$1,199 $1,174 $1,203 $1,157
Median VA Loan Costs, 2019
$5,613 $5,293 $6,251 $5,884
Median Origination Charge, 2019
$949 $1,199 $2,805 $0

Those who use a conventional loan — whether through USAA or another lender — will usually pay higher interest rates.

VA mortgage rates vs. conventional mortgage rates

 
USAA Mortgage
Quicken Loans
Wells Fargo
Average 30-Year VA Rate, 2019
3.85% 3.68% 3.88% 3.56%
Average 30-Year Coventional Rate, 2019
3.98% 4.16% 4.22% 4.0%

Average rate and fee data were sourced from public rate and fee records required by the Home Mortgage Disclosure Act (HMDA).

*Monthly principal and interest payment based on a $250,000 home price, with 0% down, at each company’s average 30-year VA interest rate for 2019. Your own rate and monthly payment will vary.

Verify your new rate (Sep 19th, 2020)

USAA Mortgage review for 2020

Judging just by the name, the United Services Automobile Association (USAA) may sound an unlikely source for mortgages. But, in some ways, it may be the best.

USAA scored highest in J.D. Power’s 2019 mortgage satisfaction study, which ranks lenders on everything from their customer service to their pricing and loan products.

In fact, USAA scores highest on this survey just about every year. Customers seem to have very little to complain about.

That’s likely because USAA is so specialized. It only serves current and former U.S. armed forces members, and is uniquely attuned to their needs.

In terms of mortgage lending, that means USAA is deeply familiar with the ins and outs of VA loans — which are often the best choice for qualified home buyers.

VA loans have flexible credit and income requirements, competitive rates, and often require 0% down payment and no mortgage insurance.

USAA Mortgage eligibility

Probably the biggest drawback to USAA is that it’s not available to more people.

You have to join the USAA to access its products. And you can only do that if you’re eligible. That includes veterans, and current or honorably discharged members of the:

  • U.S. Air Force
  • U.S. Army
  • U.S. Coast Guard
  • U.S. Marines
  • U.S. Navy
  • U.S. National Guard and Reserves

Many widows, widowers and un-remarried former spouses can also qualify.

Working with USAA Mortgage

The USAA mortgage website looks as modern, informative and welcoming as any other. But, beneath the surface, it offers less functionality than some more innovative ones do.

True, you can get pre-approved for a home loan within minutes, all online, provided you’re already a member. And there are helpful online articles tailored to VA mortgage borrowers.

But other web-based services currently seem limited.

You should probably expect to spend more time on the phone with your real estate coordinator and loan officer than you might with many other lenders. Some borrowers will be just fine with that. But tech-lovers might find the experience frustratingly old fashioned.

On the plus side, the USAA Real Estate Rewards Network offers to introduce you to an experienced local real estate agent.

With this offer, you might stand to receive a $350-$24,000 reward after closing, based on the sale price of your home. The average reward is $1,278, according to the USAA’s website.

USAA Mortgage customer service reviews

USAA really comes into its own when it comes to customer satisfaction.

J.D. Power doesn’t technically include USAA in its customer satisfaction ranking, because the company isn’t available to many borrowers. But it gives USAA Mortgage a score nonetheless.

And USAA crushes it. This year, It scored 900 on a 1,000-point scale — beating out front-runner Quicken Loans by a full 20 points.

Company
Mortgage Originations 2019
CFPB Complaints
Complaints per 1,000 Mortgages
2019 JD Power Rating
USAA
115,206 49 0.43 900/1,000
Quicken Loans
774,900 187 0.24 880/1,000
Wells Fargo
1,026,800 342 0.33 837/1,000
195,975 95 0.48 882/1,000

USAA Mortgage loan products

Pretty much everyone who qualifies for USAA membership is also eligible for a VA loan. And, given what great deals those typically provide, it’s unsurprising that USAA delivers a lot of them.

Over the years, the bank has built up considerable knowledge, expertise and experience as a specialist lender of these products.

However, it also has other types of loans in its portfolio, most of which provide for low down payments:

  • VA mortgage — VA mortgages are available to qualified service members and veterans. They offer competitive rates, flexible credit and income requirements, and may let you buy with 0% down
  • Fixed-rate mortgage — Fixed-rate mortgages have a stable interest rate over the life of the loan, which is typically 15 or 30 years
  • Adjustable-rate mortgage — Adjustable-rate mortgages have a fixed interest rate for the first few years, and then the rate floats with the market for the rest of the loan term
  • Conventional 97 (“First-time homebuyer loan”) — These loans let you borrow up to 97% of the home’s value (thus the name) and may allow as little as 3% down. A good alternative to an FHA loan
  • Jumbo mortgage — For when you need to borrow more than conventional mortgage caps allow, currently $510,400 in most areas

USAA can also help you to finance or refinance investment properties and second homes.

USAA home equity loans 

USAA does not offer home equity loans or home equity lines of credit (HELOCs). However, you can get a cash-out refinance from USAA. This is another way to tap the equity in your home and use its cash value to make a large purchase, pay off other loans, pay for a child’s college, etc.

However, unlike a home equity loan, a cash-out refinance involves re-starting your mortgage. So you need to carefully consider the long-term costs in principal and interest before committing to one. 

USAA construction loans 

USAA offers VA loans, which can be used for home purchases as well as new construction. A USAA construction loan lets you pay for the lot and construction, then roll the balance into a mortgage once the home is completed. 

USAA VA IRRRL (streamline refinancing)

USAA offers the VA IRRRL as a refinance option. The VA IRRRL (or “interest rate reduction refinance loan”) is a type of streamline refinance that makes it easier for VA loan holders to switch into a lower rate and monthly payment. 

Using the VA IRRRL, you can refinance a VA loan without a home appraisal, income check, or employment verification. This generally makes it faster and cheaper than a traditional refinance. 

If you’re getting a VA IRRRL from USAA, but your original mortgage was from a different lender, you may still be required to get a home appraisal. 

Where can you get a mortgage with USAA Mortgage?

You’ll have to be very lucky to have a USAA branch around the corner from home. It has only five. They’re in Colorado Springs, CO, West Point, NY, Highland Falls, NY, Annapolis, MD and San Antonio, TX.

Map showing USAA mortgage availability. USAA is licensed in 50 states and has branch locations in 4 states

USAA only operates physical branch locations in four states: New York, Maryland, Texas, and Colorado.

That being said, you can get a loan from USAA nationwide via phone or online. And, given its website’s limited functionality, you may end up spending a lot of time on the phone.

Still, USAA’s exceptional customer satisfaction score suggests that’s not a problem for its members.

USAA mortgage FAQ

Is USAA good for mortgages?

USAA is a good mortgage lender to check out if you’re VA loan-eligible. In J.D. Power’s satisfaction survey, USAA is top-rated by its mortgage customers year after year. It has special expertise serving veterans, military members, and their families, and would be a great resource for all your VA loan needs. 

Just be sure to compare USAA rates with other top VA lenders to make sure its pricing is competitive for you. Veterans United
and Navy Federal Credit Union are good options for VA loan comparison shopping.  

Who can get a USAA mortgage?

To get a USAA mortgage, you need to be a current U.S. service member, a veteran, surviving spouse of a military member, or have other military ties. VA loans have their own specific eligibility guidelines, which you can find here. USAA also offers non-VA loans (like conventional mortgages), but you still need to be affiliated with the military to work with the company.

What are USAA mortgage rates?

USAA mortgage rates are generally lower than other major lenders.’ That’s because USAA primarily offers VA loans, which have below-market rates thanks to their backing from the Veterans Association. But rates vary by customer, so you’ll need to request a rate quote to find yours.

Does USAA pay closing costs?

USAA will not pay your closing costs for you. But there are other ways to get closing cost assistance. You can apply for a down payment assistance or closing cost grant. You could ask a family member for gift funds. And if you’re refinancing, you might be able to roll the closing costs into the loan balance and pay them over time. Talk to your loan officer about options.

What credit score does USAA use for mortgages?

USAA requires a FICO score of at least 620 to get a mortgage.

What credit score do you need to qualify for a VA loan?

The Veterans Association technically does not require a minimum credit score for a VA loan. However, most lenders set their own minimums. Many mortgage companies require at least a 620 FICO score for a VA loan, including USAA.

Is USAA the best mortgage lender for you?

If you’re eligible for USAA membership — meaning you’re a current or former member of the U.S. armed forces, or an eligible spouse — USAA might just be the best mortgage lender for you. It has incredible customer satisfaction scores and competitive VA mortgage rates.

But remember that rates vary a lot by borrower and by company. Even if you’re set on USAA for your mortgage, get a couple loan estimates from other lenders anyway — just to make sure you’re getting the best deal on your rate and closing costs.

Verify your new rate (Sep 19th, 2020)

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  1. Interest Rate: The rate you pay in interest per year based on the current loan balance.
  2. APR: The total cost of getting the loan including the interest rate and closing costs.
  3. Discount Points: Mortgage points, also known as discount points, are fees paid directly to the lender at closing in exchange for a reduced interest rate. - Read More
  4. Mortgage Originations: The number of mortgages this lender closed. The most recent data available is from the 2017 Mortgage Market Activity and Trends, Consumer Financial Protection Bureau (CFPB), published May 2018.
  5. CFPB Complaints: The number of mortgage origination or closing related complaints filed with the Consumer Financial Protection Bureau in 2018. We ignore complaints about issues that don't concern mortgage applications and closings, such as loan servicing, since some lenders don't service loans and therefore would have an unfair advantage in complaint numbers.
  6. Complaints per 1000 mortgages: The number of mortgage-related complaints compared to this lender's total mortgages originated. Due to data availability, we're comparing 2017 originations with 2018 complaints to arrive at the number of complaints per 1000 mortgages originated.
  7. JD Power Rating: On a 1,000 point scale, consumer insight company JD Power scores large banks across six factors: channel interactions, deposit accounts, credit accounts, investment accounts, convenience, and problem resolution.