USAA Mortgage Rates Review: Today’s Best Analysis

USAA began operations in the 1920s, when 25 Army officers in San Antonio, Texas, created a small cooperative to insure each other’s vehicles. USAA operates offices across the country and internationally to serve customers on duty overseas.

The company also offers traditional mortgage options as well as those only available to service members and veterans.

USAA Mortgage Rate Facts

• Provides support and assistance specifically designed for active-duty and retired service members, as well as eligible family members
• Extends a host of financial education resources and support through the USAA Home Learning Center
• Has a variety of loan products, from VA loans to first-time homebuyer loans, jumbo loans, conventional loans, and ARM loans
• Offers zero percent down payment VA loans and down payments as low as 5 percent with other loan options
• Provides online preapproval as well as real estate agent referral with cash rewards ranging from $350 to $24,000 for qualifying customers

Overall

USAA has operated for close to 100 years, with a consistent mission of offering a variety of financial services to a specific group: active-duty and retired servicemembers, and qualifying family members.

USAA provides home loans across the U.S., originated 63,000 home loans in the first three months of 2018, and ranks No. 20 in Fortune’s list of the World’s Most Admired Companies for 2018.

USAA has more than 12 million members, and clearly defines its share of the overall home loan market. Because a strong majority of its members qualify for VA loans and other programs designed to benefit active-duty military and veterans, the bank can use its experience and expertise to provide highly relevant, targeted services.

Current Mortgage Rates

USAA Loan Specifics

Understanding the mortgage options offered by a lender is crucial to making an informed decision. While mortgage rates play a major role in that process, the loan type is another crucial aspect to consider.

USAA Adjustable Rate Loans

As the name suggests, Adjustable-Rate Mortgages (ARMs) feature a lower initial rate that can increase or decrease with market fluctuations throughout the life of the loan.

USAA offers a five-year guarantee on the initial rate, meaning that borrowers who plan to move or refinance before the five-year period expires will likely benefit the most from this type of loan. ARM Loans have the lowest initial interest rate of any mortgage offered by USAA.

USAA Conventional Loans

This type of mortgage provides predictability by maintaining the same interest rate for the entire loan term. Borrowers can count on the constancy of that rate when making financial decisions, whether related to the loan or general budgeting.

Fixed rate loans are especially useful for those who plan to remain in their home for a long time. They are also attractive when interest rates are low, as they provide greater value over time.

USAA Jumbo Loans

These debt instruments are specifically designed for USAA members who need a loan of over $453,100, the Jumbo Loan lower limit that was recently increased by the Federal Housing Finance Agency.

USAA Jumbo Loans are available for up to $3 million, making them a good choice for those interested in owning a high-value home. Nevertheless, those looking into jumbo loans need to have a significant amount of cash on hand, as these types of loans typically come with a 20-percent down payment requirement.

USAA First-Time Homebuyer Loans

Created with first-time home buyers in mind, these loans are similar to those insured by the Federal Housing Administration, but are not endorsed or secured by that agency. USAA offers attractive terms and conditions for first-time homebuyers, such as down payments as low as 3 percent. Through USAA, borrowers qualify for first-time home buyer loans as long as they haven’t owned a home in the last three years.

USAA VA Loans

With membership limited to active-duty and retired service members and their immediate family, it’s not surprising that VA Loans are a common USAA offering. Current service members, those retired from the armed forces, and certain surviving spouses all qualify for this type of loan.

With no down payments or private mortgage insurance required, and generally lower interest rates than conventional loans with the same terms, VA loans are especially attractive to those who qualify.

USAA Mortgage Customer Experience

USAA earned an overall rating of four out of five stars in JD Power’s 2017 Primary Mortgage Originator rankings, with a Loan Offerings rating of five stars. This overall rating has decreased slightly since 2016, when USAA received five stars.

USAA emphasizes its commitment to its members, and the restrictions on joining help it create a strong sense of community for those who qualify. The lender offers an online home loan preapproval process and a customer service number, 800-531-0341, that leads directly to its department of loan specialists.

By combining these offerings with short, FAQ-style answers to common mortgage questions and longer articles on mortgage loan specifics all on one main page, USAA makes it simple for members to determine which loan product best meets their needs.

The lender also provides an on-site mortgage calculator tool that allows members to input the home price, desired interest rate, anticipated down payment, and the length of the loan term to generate a sample repayment amount.

Although based on assumptions and estimates, this tool can help members understand what they can afford early on. That, in turn, allows them to focus on the types of loans best suited to their needs.

While quotes aren’t available through without going through the preapproval process, completing that step makes it that much easier to explore available options and choose the one that offers the best terms and conditions for individual needs.

With preapproval in hand and loan specialists readily available to answer questions, choosing a loan product with USAA is a hassle-free experience.

USAA enjoys an overall positive reputation for customer service. Unlike a a few other mortgage lenders, it does not appear on the Consumer Financial Protection Bureau’s ranking of Most-Complained-About Companies for Mortgages.

The organization has earned praise from customer service experience software provider Satmetrix in its Net Promoter Benchmark Study as earning the highest score for eight consecutive years, 2000-2017.

However, USAA has also received its fair share of legitimate complaints from members. One drawback noted on its message board forum is the lack of physical USAA offices, requiring borrowers to make contact via phone and email.

Those who have had negative experiences cited issues with interdepartmental communications, extended timelines, and other concerns that caused problems with third parties involved in the home purchase process.

To be fair, some commenters asked for, received, and reported the satisfactory resolution of their issues once they got in contact with the company’s customer service staff.

USAA Lender Reputation

USAA is a diversified financial services group that was founded in 1922. Its Nationwide Mortgage Licensing System ID number is 401058. The banking portion of the company has a Trustpilot ranking of 2.4/10 stars and USAA life insurance is highly rated among the various rating agencies.  Its BBB rating is “A” and the lender has closed 927 BBB complaints in the last three years.

• Data collected Nov. 5, 2018

USAA Mortgage Qualifications

A borrower’s credit score has a significant impact on the rates and terms they are offered. A score above 760 puts borrowers in the highest category and frequently leads to the provision of favorable rates and terms across the industry.

A good score of 700-759 isn’t as strong, but it’s still more of an asset than a hindrance in terms of loan specifics. With “fair” credit, “poor” credit and situations where they have little or no credit history, borrowers should anticipate receiving offers with less-favorable terms and conditions.

Down-payment requirements vary depending on the loan type offered by USAA. Members benefit from more than one type of zero-down loan but also have the option of offering a larger down payment to secure more favorable loan terms.

This flexibility and array of options allows USAA members to choose the loan product that makes the most sense for them in the long term.

USAA Phone Number and Additional Details

Homepage URL: https://www.usaa.com/
Company phone: 210-531-8722
Headquarters address: 9800 Fredericksburg Road, San Antonio, TX, 78288