USAA Bank Mortgage Review: Serving Our Military Community

USAA Bank has a long-standing reputation for delivering excellent value and outstanding customer service. USAA focuses entirely on serving the military community with its banking, insurance, and investment products. You can get a VA loan or a conventional mortgage here.

Check out our USAA Bank Mortgage review to find out whether this might be the best mortgage lender for your next home loan.

This mortgage lender is a good fit for: USAA members or anyone who is eligible for USAA membership.

Top perks

Customer satisfaction

USAA earns an A+ from the Better Business Bureau, which says that when people lodge complaints, the company is responsive.

No down payment for VA loans

The VA mortgage has no down payment requirement (for most borrowers). But you will need to contribute some cash toward closing costs for a VA purchase loan.

VA mortgage experts

USAA's superpower is serving the military community. Its employees know how to help service members get the right financial product. This lender is truly a VA loan expert.

Lower your interest rate

USAA offers the VA interest rate reduction refinance loan (IRRRL). This program permanently lowers the mortgage interest rate on a VA loan. At USAA, IRRRL borrowers pay no appraisal fee, title fee, or VA funding fee, and the origination fee is currently $0.

Low or zero origination fee

USAA doesn't charge an origination fee for VA loans. For conventional mortgages, the origination fee is 1%, up to a maximum fee of $1,295.

This is a selling point to compare when you're loan shopping. Some lenders charge an origination fee equal to 1%-3% of your loan amount. A 1% fee (the maximum lender fee for a VA loan) on a $500,000 loan would be $5,000.

Conventional loans

If you aren't eligible for the VA loan, or you've used your benefit, USAA also offers conventional loans, including a low down payment program.

Information and education

Between the website and USAA's knowledgeable staff, borrowers can easily get information about VA loans, conventional loans, eligibility, required borrower paperwork, affordable payments, or anything else related to VA loans.

Fast pre-approval

Mortgage loans from USAA Bank Mortgage are available to USAA members. If USAA already has the borrower's financial information (because the borrower is already a customer), pre-approval can happen quickly.

What could be improved

Members only

Not everyone can get a USAA Bank Mortgage. USAA membership is free, but it's limited to these people:

• Serving members of the military
• Those who have received an honorable discharge from the military
• Pre-commissioned officers
• Eligible family members of the above, including spouses, divorced spouses who haven't remarried, widows, and children

No online custom rate quote tool

USAA Bank Mortgage rates are published, but they will only apply to the most well-qualified applicants. If you don't have excellent credit, or you fall short on another requirement, your rate might be higher. There is no DIY rate quote tool on the site. The only way to get a personalized rate is through a USAA Bank Mortgage pre-approval.

Minimal loan options available

The current loan options at USAA are limited. They are:

• VA loan
• VA jumbo loan
• VA IRRRL
• VA cash-out refinance
• Conventional loan
• Conventional refinance loan
• Low down payment purchase loan for first-time home buyers
• HomeReady low down payment mortgage

The HomeReady loan program is a 3% down mortgage for lower-income borrowers. If you qualify for the program, you can put the down payment together from multiple sources, including gifts and grants.

USAA doesn't offer adjustable-rate mortgages. Also, USAA does not offer USDA loans or home equity loans.

To qualify for a mortgage at USAA Bank Mortgage, you need to be a member. When you're ready to apply, much of your application can be prefilled based on your member profile. Any asset accounts or debts (such as an auto loan or a personal loan) with USAA will automatically show up. The application process includes a chance to upload any necessary documents.

USAA also needs to know where you want to buy a home and the expected purchase price.

The three main components of your mortgage application are credit score, debt-to-income ratio, and down payment.

USAA requires a 620 credit score. There is no down payment requirement for a VA loan. For a conventional mortgage, USAA requires 3% down.

An ideal debt-to-income ratio for a VA loan is 40%-43%. That means that no more than 43% of your gross pay each month should go to debt payments (like credit card bills and your proposed housing payments). USAA says that some applicants can be approved with a higher DTI if other compensating factors are present. In other words, USAA will consider your entire application, including your credit score, the amount of your down payment, and other factors.

The VA loan doesn't require a down payment. However, for a purchase loan, you need to come to the table with 2% to 5% of the loan amount for closing costs. For a VA purchase loan, only the VA funding fee can be rolled into the loan. Other closing costs must be paid at closing. For an IRRRL, you have more flexibility to roll out-of-pocket costs into the loan.

USAA's refinance rates are usually lower than the national average. When we checked, the VA refinance rates were the same as the VA purchase loan rates. The rate for a conventional refinance was a little higher than the VA loan rate.

USAA's mortgage rates trend lower than the national average. Like most lenders, USAA charges mortgage discount points to get the lowest advertised rate. Each point costs 1% of the loan amount. In exchange for that fee, you get a permanent discount off your mortgage interest rate. The discount is usually one-eighth to one-quarter of one percent.

You're affiliated with the military. Generally speaking, USAA's prices are difficult or impossible to beat. Plus, USAA has a stellar reputation for customer service. If you qualify, a USAA mortgage should be on your comparison list.

The mortgage process stresses you out. With its emphasis on customer service, USAA Bank Mortgage can make the potentially stressful mortgage loan process easier. USAA gets top marks -- by a landslide -- for customer service. That should tell you that the experience of working with USAA is not just satisfactory -- it's downright pleasant.

If you're a member of that special club that USAA serves and you want a very positive home loan experience, USAA might be right for you.