USAA Mortgage Lender Review

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-rate VA mortgage estimates at major banks

 
USAA Mortgage
Quicken Loans
Wells Fargo
Interest Rate1

3.25%

3.375% 3.25% 3.0%
APR2

3.556%

3.837% 3.571% 3.281%
Mortgage Points3

1.0

2.25 0.375 1.0
Monthly P&I Payment

$1,304

$1,321 $1,304 $1,272

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

30-year VA loan rate estimates vs. 30-year conventional loan rate estimates

 
USAA Mortgage
Quicken Loans
Wells Fargo
VA rate estimate

3.25%

3.375% 3.25% 3.0%
Conventional rate estimate

3.625%

3.99% 3.75% 3.625%

Loan assumptions

We compared USAA side-by-side with the biggest banks and lenders in the U.S., and found that its rates and monthly payments fall roughly in line with the average for major lenders. However, average rates can differ based on the types of clients and programs a lender specializes in.

Rates shown here are current as of 11/15/2019. Monthly principal and interest payments are based on a home price of $240,000 and zero down payment for a home located in Washington. 

These numbers are a snapshot meant for general comparison only. Your own mortgage costs will vary depending on your loan, your finances, the economy and other factors.

Compare personalized rates from major lenders. Start here (Dec 8th, 2019)

USAA Mortgage review for 2019

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.

USAA Mortgage Learning Center, USAA Mortgage Review from The Mortgage Reports

USAA has some helpful resources that are specific to VA 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 Originations4
CFPB Complaints5
Complaints per 1,000 mortgages6
2019 JD Power Rating7
USAA
63,000 42 0.67 900/1,000
Quicken Loans
396,000 171 0.43 880/1,000
Wells Fargo
312,000 419 1.34 837/1,000
71,000 45 0.63 882/1,000

It doesn’t do quite as well with the Consumer Financial Protection Bureau, which records official complaints filed against lenders.

USAA had 42 complaints filed against it in 2018. But that’s still fewer complaints per 1,000 mortgage customers than some other major lenders have, like Wells Fargo, Chase, and Bank of America.

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 $484,350 in most areas

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

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.

USAA Mortgage Branch Locations, from USAA Mortgage Review by The Mortgage Reports

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.

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.

Compare (Dec 8th, 2019)

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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.