Navy Federal Mortgage Review for 2022

Navy Federal Credit Union is a top-ten VA mortgage lender. Find out if it's the right choice for your home loan.

Navy Federal Credit Union
Minimum down payment0%
Minimum credit scoreN/A
Loan Products Offered

Conventional mortgages
VA mortgages
Military Choice loans
Homebuyers Choice loans
HELOCs

Best Features

  • A top VA loan expert by volume
  • Offers a rate-match guarantee
  • Low- and no-down-payment mortgage loans

Drawbacks

  • Membership limited to military-affiliated people 
  • Doesn't offer FHA or USDA loans

Overview

Founded in 1933 and headquartered in Vienna, Virginia, Navy Federal Credit Union (NFCU) has over 300 branches and more than 11 million members.

Navy Federal is one of the ten biggest lenders of VA loans, according to 2021 data, so its loan officers have extensive experience assisting military families.

Furthermore, NFCU is on a mission to “be the most preferred and trusted financial institution serving the military and their families.”


The following table compares average mortgage rates and funding fees from several mortgage lenders in 2021. Compared to the other major lenders, Navy Federal Credit Union offered its members competitive interest rates on a 30-year loan. These borrowers also paid average loan origination fees.

Average mortgage rates at major lenders

Navy Federal CURocket MortgageWells FargoFreedom Mortgage
Avg 30-Yr Interest Rate, 202112.93%3.00%3.14%2.66%
Median Total Loan Costs, 20211$3,527$4,670$3,600$3,880
Median Origination Fee, 20211$0$2,430$1,330$0

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

Navy Federal Credit Union offers a “rate-match guarantee" that can be helpful to borrowers who shop around. If another lender offers a lower rate on your mortgage, Navy Federal will match this rate or give you $1,000.

In addition, NFCU has a rate lock float-down option that allows borrowers to “float down twice as long as the total rate reduction does not exceed 0.500%.” What’s more, this rate lock is provided free of charge.

Keep in mind that average mortgage loan rates fluctuate from year to year based on market conditions, so the rate you receive today will likely be different than the ones shown. Sample rates are for comparison purposes only.

Navy Federal Credit Union is a full-service credit union offering deposit accounts, personal loans, retirement savings accounts, credit cards, and a variety of financial services to its members. It also has a broad range of mortgage solutions for members of the Armed Forces, Department of Defense civilian employees, veterans, and their eligible families.

Navy Federal Credit Union isn’t only committed to helping its members find the right mortgage — the lender also strives to help borrowers save money. For instance, Navy Federal offers a rate match guarantee for borrowers who shop around and a float-down option allowing some borrowers to get a lower mortgage rate if interest rates fall after they lock.

Zero-down home loans

It’s notable that Navy Federal offers other zero-down mortgage options in addition to the federally-backed VA loan.

The Homebuyers Choice Loan is a zero-down mortgage for military borrowers who have already exhausted their VA home buying benefit. Rates run slightly higher than the standard VA loan, and the credit union charges one-half percent in discount points. Still, this is a great deal for veterans who do not have VA loan entitlement remaining.

Keep in mind that this loan does not require private mortgage insurance (PMI). This lowers the mortgage payment considerably compared to an FHA or conventional loan. There are even refinance and jumbo loan options available. Few other lenders go this far to ensure the availability of home financing for veterans.

Low credit score minimums

What’s noteworthy, too, is that Navy Federal doesn’t set a minimum credit score for mortgage approval — though it’s widely accepted that most of its home purchase loans carry a 580 minimum credit score.

Still, according to a credit union representative: “Navy Federal is a relationship-based lender, which means we work closely with our members to find the right mortgage for their needs. We make every effort to perform “true underwriting," and a member's approval isn't determined by just one number — but by several factors.” 

Of course, if your score is particularly low or you have red marks on your credit report, it may still be difficult to qualify for a mortgage. But Navy Federal could be helpful for borrowers with borderline credit or thin credit histories.

You must be a credit union member to be eligible for a mortgage loan with Navy Federal. Navy Federal membership is open to:

  • Active-duty military members
  • Retirees and veterans of the Armed Forces
  • Department of Defense civilians
  • Eligible spouses and family members of service members

Even though the NFCU provides various mortgage solutions, it’s clearly tailored to military needs. For example, it doesn’t offer FHA home loans or USDA home loans, which are popular low-down-payment mortgages for first-time home buyers.

Working with Navy Federal

Once you’re a Navy Federal member, you can apply for a mortgage in person or online. If you’re applying online, Navy Federal makes it simple and convenient to submit documentation via a portal. Information you’ll need to apply for a mortgage includes:

  • Social Security number and date of birth
  • Navy Federal Credit Union account number
  • Recent paycheck stubs
  • W2s and complete tax returns from the past two years
  • Current bank account statements and information on other assets

HomeSquad is the online tool you’ll use to track your loan status, from either your mobile device or computer. Rather than visit a loan advisor in-person, simply upload your paycheck stubs, tax returns, and other necessary documentation for review. Instead of printing multiple bank statements, you can link your bank accounts to the online system. From here, underwriting can verify your assets. Depending on your location and the settlement company, e-closing might be an option, too.

RealtyPlus

In addition to online tools like mortgage and refinancing calculators, you’ll enjoy other membership perks like NFCU’s free RealtyPlus service. This program can offer up to $9,000 cash-back when you purchase a home with one of its preferred real estate agents.

According to J.D. Power’s 2021 U.S. Primary Mortgage Origination Satisfaction Study, Navy Federal Credit Union ranks high for overall borrower satisfaction. It scored 861 on a 1,000-point scale. The credit union also had fewer than one customer complaint filed for every 1,000 mortgages in 2021, according to the Consumer Financial Protection Bureau (CFPB).

Customer service reviews at major lenders

CFPB Complaints, 20214Complaints Per 1,000 Mortgages, 20215J.D. Power Satisfaction Score, 20216
Navy Federal CU1500.91861/1,000
Rocket Mortgage3760.24876/1,000
Wells Fargo4880.58832/1,000
Freedom Mortgage2620.35829/1,000

Mortgage loan products at Navy Federal

Navy Federal Credit Union offers its members several home loan options, including:

  • VA loans: Backed by the Department of Veterans Affairs, home buyers can get a 10- to 30-year VA loan with no money down. The seller can contribute up to 4% of your closing costs
  • Conventional mortgages: A loan conforming to guidelines set by Freddie Mac and Fannie Mae. Apply for a 10- to 30-year fixed-rate loan with a minimum down payment of 5%, which is higher than most
  • Military choice: An ideal solution if you’ve exhausted your VA loan benefit. Choose between a 16- to 30-year term with no money down and no PMI required. The seller can contribute up to 6% of your closing costs
  • Homebuyers choice: Get a 10- to 30-year term with no money down and no private mortgage insurance. The seller can contribute up to 6% of your closing costs
  • Jumbo loans: Let you borrow above standard conforming loan limits. Currently, a jumbo loan is any mortgage above $ in most parts of the U.S.
  • Adjustable-rate mortgage: Do you plan to move within the next few years? You may enjoy a low initial fixed rate with a 5/5 ARM. Down payments range from 0% to 10%
  • Investment property loans: Real estate investors can finance the purchase of rental or vacation properties
  • Second home loans: Own your own vacation home with a second-home mortgage loan

Navy Federal Credit Union mortgages are heavily focused on military homebuyers. However, its membership requirement means the restrictions on these loan types won’t be an issue for most applicants.

Refinancing with Navy Federal

In addition to home purchase loans, homeowners who are looking to refinance their current mortgages have options, too. Navy Federal Credit Union offers a few types of loans to help borrowers lower their monthly payments, own their homes sooner, or tap their equity.

  • Rate-and-term refinance: Exchange your original mortgage with a new one that offers more favorable loan terms or a lower interest rate. You could reduce your monthly mortgage payment or pay off your loan balance quicker
  • Cash-out refinance: Access your home equity by replacing your current mortgage with a new, larger loan amount, and then receiving the difference as a lump sum of cash
  • VA cash-out refinance: Similar to a traditional cash-out refi, but designed with VA loans in mind
  • VA IRRRL: Also known as the Veterans Affairs Interest Rate Reduction Refinancing Loan, this is a low-doc, low-cost mortgage refinance

NFCU also provides refinance loans for its specialty Military Choice and Homebuyers Choice mortgages. Refinance loan terms range from 10 to 30 years, and you may be eligible with a loan-to-value ratio (LTV) of up to 95% or 100% (depending on the loan type).

For those who want access to their home equity without refinancing, Navy Federal Credit Union offers both home equity loans and home equity lines of credit (HELOCs). A HELOC can be beneficial if you have ongoing expenses you want to finance at a low rate. You can borrow from the credit line over time as needed, and during the first few years, you pay interest only on what you borrow.

HELOCs with Navy Federal Credit Union are available for primary residences, second homes, and investment properties. The credit union doesn’t charge any upfront fees for application or origination. The standard Navy Federal HELOC comes with a 20-year draw period that is followed by a 20-year repayment period. But it also offers an interest-only HELOC with a slightly higher APR.

Navy Federal HELOC requirements

  • Borrow up to 95% of your home’s equity. The maximum LTV for primary and second homes is 95% and 70% for investment properties
  • Loan amounts between $10,000 and $500,000
  • Rates between 6.5% APR and 18.0% APR
  • No origination fees

The lender doesn’t publish its HELOC credit score requirements, but expect to need a FICO somewhere around 620 to qualify. However, Navy Federal has a reputation for evaluating a borrower’s credit history on a case-by-case basis, so a loan officer will likely examine your creditworthiness based on your overall financial situation.

Where can I get a mortgage with Navy Federal Credit Union?

Unlike some credit unions, which have branches in only a few states, Navy Federal Credit Union has branches and ATMs nationwide and internationally. The credit union currently operates over 300 branches around the globe, including international locations and military base installations. They also have a network of more than 30,000 fee-free ATMs.

Is Navy Federal the best mortgage lender for me?

If you’re eligible for membership and you’re looking for a no-money-down mortgage, Navy Federal could be a great option. The lender offers competitive rates on average, a variety of zero-down loans, no private mortgage insurance, and a rate-match guarantee.

But just because Navy Federal is best for some military home buyers, doesn’t mean it’s best for all. Always shop around and get additional rate quotes from at least three lenders.

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