USAA Mortgage Review for 2021

USAA has a great reputation as a mortgage lender, with competitive rates and fees and top customer satisfaction scores. But it's available only 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 25 military officers who wanted to insure each other's vehicles. Now, it has expanded outside of insurance, providing a variety of financial services for its 13 million members nationwide.

When it comes to mortgages, USAA has a great reputation.

Given its focus on military membership, USAA is an expert in VA loans. But it provides 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 services (manages) the loans it originates, so military families 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.


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 (Mar 6th, 2021)

USAA Mortgage review for 2021

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

USAA scored highest in J.D. Power’s 2020 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.

With backing from the U.S. Department of Veterans Affairs, 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 financial products. And you can do that only if you’re eligible.

USAA membership is open to veterans and active duty 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 lenders’ sites.

True, you can get pre-approved for a home loan within minutes, all online, provided you’re already a USAA 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.

USAA Mortgage customer service reviews

USAA really stands out 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 887 on a 1,000-point scale — beating out front-runner Quicken Loans by 4 points.

Company
Mortgage Originations 2019
CFPB Complaints
Complaints per 1,000 Mortgages
2020 JD Power Rating
USAA
115,206 49 0.43 887/1,000
Quicken Loans
774,900 187 0.24 883/1,000
Wells Fargo
1,026,800 342 0.33 840/1,000
195,975 95 0.48 867/1,000

USAA also has a low number of customer complaints filed with the Consumer Financial Protection Bureau (CFPB) — less than half of one complaint per 1,000 mortgages.

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 loans typically provide, it’s unsurprising that USAA delivers a lot of them.

Over the years, the bank has built up considerable knowledge and expertise as a specialist lender of VA mortgage 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. Unlike VA loans, conventional fixed-rate mortgages require private mortgage insurance (PMI) premiums if you put less than 20% down
  • 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 — Jumbo loans can help when you need to borrow more than conventional mortgage caps allow, currently $548,250 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, homeowners 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. 

VA IRRRL program (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 to 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.

USAA doesn’t charge loan origination fees on IRRRLs, and it will cover the VA funding fee. 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.

Check your VA Streamline Refinance eligibility (Mar 6th, 2021)

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.

However, USAA has nearly a century of experience providing financial services remotely.

USAA members in all 50 states and the District of Columbia can get a loan from USAA nationwide over the 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, too, including a minimum credit score of 620 in most cases. 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 Department of Veterans Affairs. But rates vary by customer and loan amount, 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 down payment assistance or closing cost grants. 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 Department of Veterans Affairs technically does not require a minimum credit score for VA loans. However, most lenders set their own minimums. Many mortgage companies require at least a 620 FICO score for a VA loan, including USAA. To improve your credit score, be sure to pay debts like personal loans and credit card bills on time, and check your own credit report for errors before applying for a mortgage

What kind of documentation does USAA require?

Like other mortgage lenders, USAA’s underwriting process will ask you to document your income and assets. Your loan officer could ask for bank statements, investment balance sheets, W2 forms, and pay stubs. For a VA loan, you’ll need a Certificate of Eligibility to prove you’re eligible for the VA home loan program. COEs are easy to get; many lenders, including USAA, will help you file the paperwork.

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 (Mar 6th, 2021)

Compare to These Lenders

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Sources:

  1. Average mortgage rates and fees sourced from self-reported data mortgage lenders are required to file under the Home Mortgage Disclosure Act. Rates and fees shown reflect the previous year’s data and may not align with today’s mortgage rates
  2. Monthly principal and interest payments calculated using TheMortgageReports.com mortgage calculator. Payments shown are based on a $200,000 loan amount and assume a “very good” credit score. Property taxes and homeowners insurance are not included. Your own monthly payment will vary
  3. Number of mortgage originations for the previous year sourced from self-reported data mortgage lenders are required to file under the Home Mortgage Disclosure Act
  4. CFPB Complaints reflect the number of mortgage origination or closing-related complaints filed with the Consumer Financial Protection Bureau for the previous year
  5. Complaints per 1000 mortgages reflect the number of official complaints filed against a lender with the CFPB for the previous year, compared to the lender’s total number of mortgage originations for the previous year
  6. JD Power Rating reflects the company’s customer satisfaction score according to JD Power’s most recent Primary Mortgage Origination Satisfaction Study. Survey respondents score their lenders in four areas: application/approval process, communication, loan closing, and loan offerings