USAA Mortgage Review

USAA Mortgage logo

USAA Mortgage


Millennial Money rating

Bottom Line

USAA excels as a mortgage lender, especially for VA loans, which give veterans a way to buy a home with no money down and no Private Mortgage Insurance premiums.


  • Competitive Interest Rates
  • Helpful Online Tools
  • Pays Funding Fee for IRRRL
  • Waives Origination Fee for VA Refinancing


  • No FHA or USDA Loans
  • No Home Equity Loans



Application Process


Online Tools


Loan Options


USAA Mortgage logo

Many military families consider only USAA Mortgage when they’re shopping for a VA loan.

But a lot of other banks have the authority to issue VA loans. A lender besides USAA may fit your needs better.

Let’s take a close look at USAA — especially its VA mortgage lending department — to see whether USAA is the best lender for you.

About USAA

USAA has an interesting history. Twenty-five Army officers in Texas created USAA in 1922 to insure each other’s automobiles. (They couldn’t find coverage elsewhere.)

Even as it has grown into a nationwide financial services provider with nearly 13 million members, USAA remains military-first.

Unless you’re in the military, a veteran, or a qualifying military spouse or dependent, you can’t join USAA or use its services.

Since VA mortgage loans are also available only to military members, veterans, and qualifying spouses, USAA and VA lending work well together.

In this review, we’re dealing mainly with USAA Mortgage’s VA lending.

USAA Mortgage Benefits

The U.S. military is a global force, so USAA has always needed a way to connect with its members without the benefit of local branch offices.

Even before the Internet made connecting easier, USAA was a pioneer in remote banking. This legacy continues even in the digital age. USAA has:

  • Great Apps: Online banking is even more accessible on your phone; USAA’s apps are solid and user-friendly.
  • All-Online Applications: You can find more intuitive online applications for loans elsewhere in the market, but USAA’s is efficient and easy to use.
  • Online Prequalification: Getting prequalified helps determine your price range. Details could change in the underwriting phase, but prequalification offers a useful estimate.
  • A Specific Focus on VA Loans: The VA changes its guidelines from time to time. USAA’s focus on VA loans has made the lender an expert on these loans.
  • Good Phone Customer Service: Decades of relying on phone support to interact with customers pays off for most members, though recently, complaints have risen about slow service over the phone.
  • Authorization to Lend in 50 States: Wherever you’re buying a property in the U.S., USAA is authorized to finalize your VA loan.
  • A Network of Realtors Available: Even if you use another lender, as a USAA member you can get help from USAA’s network of Realtors.

Types of USAA Home Loans

You won’t find a full menu of mortgage loans available at USAA Mortgage.

USAA will not offer non-VA subsidized loans such as FHA and USDA loans. The thinking here is that USAA members would prefer using their VA benefits to buy a house. Most of the time, this is true, but if you’d prefer an FHA or USDA subsidized loan, you’ll need to shop elsewhere.

USAA also does not offer traditional home equity lines of credit or home equity loans. You’d need to refinance your entire loan using an IRRRL.

Loans Available with USAA Mortgage

USAA doesn’t have every kind of mortgage, but the association still offers a wide variety of products:

  • Conventional Loans: 10-, 15-, 20-, and 30-year fixed-rate mortgages without government subsidies. For best results, make a 20 percent down payment to avoid paying extra for Private Mortgage Insurance.
  • VA Loans: 10-, 15-, 20-, and 30-year fixed-rate VA mortgages, which have been the focus of this review. USAA is a leading provider of VA loans, offering veterans access to loans with no down payments.
  • Jumbo Loans: Borrowers who need a loan greater than $510,400 will need a jumbo mortgage. USAA provides these loans.
  • Adjustable Rate Mortgage (ARM): USAA has a 5/1 ARM, which means you’ll have a lower introductory interest rate for five years, followed by annual fluctuations for the rest of the loan’s term.
  • VA Refinancing: USAA can refinance your home, and the VA-backed IRRRL loan is a great deal for veterans. But you can’t get an equity loan or line of credit.
  • Conventional 97: Conventional 97 loans require only 3 percent down, which helps many first-time homebuyers access a mortgage without assistance from the VA or another governmental agency.

USAA Mortgage Rates & Fees

Like most other VA lenders, USAA charges borrowers a 1 percent loan origination fee. For a $200,000 loan, the fee would be $2,000. Buyers normally pay this fee at closing, along with other non-bank-related fees.

The VA itself charges a separate funding fee, which varies depending on your down payment and whether you’ve had a VA mortgage before.

This fee, due when you close on your loan, could add thousands more to the price of your home.

But the fee can unlock home ownership with no money down — or with a small down payment — without paying extra insurance year after year.

The funding fee breaks down like this:

Down Payment Fee for 1st VA mortgage Fee for Additional VA mortgages
0% to 4.99 % down 2.3% of loan 3.6% of loan
5% to 9.99% down 1.65% of loan 1.65% of loan
10% or more down 1.4% of loan 1.4% of loan

USAA Pays Refinancing Fee

Unlike most other VA lenders, USAA will pay your funding fee if you’re refinancing your mortgage. This feature by itself could make USAA your best option for refinancing a VA loan with an IRRRL. USAA also waives the origination fee on this loan.

How Do USAA Mortgage Rates Compare?

Fees like loan origination and USAA funding fees make borrowing more expensive, but interest rates generate the biggest expense for borrowers.

Because lenders build your interest charges into your monthly loan payments across years or decades, this cost can seem invisible to many loan shoppers.

But even shaving just half a point from your mortgage interest rate can save tens of thousands of dollars over time.

USAA’s rates tend to be comparable with other leading mortgage lenders. However, your credit score and debt-to-income ratio will be the biggest factors when you lock in a loan.

When you visit USAA Mortgage online, you’ll see some great-looking VA loan rates. Keep in mind these rates are available only for well-qualified buyers making large down payments.

USAA Mortgage Application Process

Because USAA excels at remote banking, you can get started quickly and easily from wherever you are.

If you’re already a USAA member, you could have a loan application submitted within a few minutes. If you’re not a member, you’ll have to sign up first, proving your connection to the military in the process.

USAA initiates loans through two avenues:

  • Phone: This is the traditional way USAA has interacted with customers for years.
  • Online: USAA’s Web site and apps offer a strong alternative to calling USAA to start the application process.

Whatever route you choose, be sure you have some basic information about your application available. You’ll need:

  • Certificate of Eligibility. (USAA can help you get this if you don’t already have it.)
  • Your Social Security number.
  • Basic income information — recent pay stubs and W2s.

Later, when you’re ready to finalize the loan, you’ll need more official documents such as Form DD-214 and Form 28-1880. You’ll also need to provide bank statements for the past three months.

To get prequalified, though, your basic information should be enough. Be sure you have about half an hour set aside.


I already mentioned USAA’s current policy of paying the VA funding fee for refinances IRRRL. USAA also charges no loan origination fee on IRRRL refinances. This is a fantastic benefit.

USAA also sells discount points to lower the loan’s mortgage rate. Discount points can help, but this is tricky and dependent on several other variables.

A discount point costs 1 percent of your loan and lowers your interest rate by 0.25 percent.

By lowering your interest rate, discount points will lower your loan’s overall interest charges. But because interest is charged over time, you’d need to keep your loan for several years, at least, to capitalize on these savings.

If you bought 2 discount points on a $200,000 home, you’d be paying an extra $4,000 at closing in exchange for lowering your interest rate by 0.5 percent.

You pay the cash up front to lower your rate, but you may need five years to save $4,000 in interest charges. After five years, however, you’ll be saving more and more as each year passes.

You can also get a lower interest rate — and a lower VA funding fee — by putting your discount point cash toward a bigger down payment. Or, you could put that cash toward renovating part of your home, increasing its value.

My ultimate point here is this: Give discount points some thought and consider the broader perspective of your loan and your financial life before buying discount points.


As a huge financial services provider with a global reach, USAA takes security seriously.

No institution, including USAA, can guarantee it will never experience a data breach. However, USAA shows no warning signs or vulnerabilities.

Customer Support

Customer service has been and continues to be a hallmark for USAA. The company prides itself on taking care of its members because its members have been the guardians of freedom for decades.

USAA is in the midst of a digital transformation, slowly shifting away from its traditional, phone-heavy customer support strategy. The association has put more emphasis on its apps and online experience.

In recent years I’ve noticed an uptick in customer service complaints from USAA members. Long wait times and inefficient phone customer service usually top the list of complaints.

Overall, almost all members get the help they need over the phone, so this increase in complaints represents only a tiny fraction of USAA’s 13 million or so members.

If you’re a USAA member and have noticed changes in your level of customer service, you’re free to share your experiences in the comments section below.

Pros and Cons

USAA wants to provide the best financial services, insurance, and banking products for military families. But no single association can be the best at everything. Here are some pros and cons of USAA:


  • Waives origination fee for IRRRL (VA loan refinancing)
  • Pays VA funding fee for IRRRL
  • Competitive interest rates
  • Good educational tools for first-time buyers
  • Help finding a home from Realtors if needed
  • Guidance providing VA loan eligibility if needed
  • Solid online tools


  • Fewer options outside of VA loans than most lenders
  • No USDA or FHA loans
  • No HELOC or home equity loans
  • Simple underwriting process doesn’t consider alternative criteria

Alternatives to USAA Home Loans

Your military connections qualify you for USAA, but they don’t limit you to USAA. If you’re not happy with the association’s mortgage products, you have plenty of other options.

Some of my favorite mortgage lenders — all of which have VA loans — include:

  • Quicken Loans / Rocket Mortgage: This former upstart now leads the nation in mortgage originations, mostly generated over the phone like USAA. Quicken’s all-online subsidiary, Rocket Mortgage, uses the same underwriting and offers the same options, which include VA loans along with a full menu of loans.
  • Chase: I often recommend Chase for people who want modern online access but also a neighborhood branch. Chase also offers just about every kind of mortgage.
  • LoanDepot: This lender excels at meeting challenges for borrowers who are building new construction.
  • LendingTree: LendingTree isn’t a lender; it’s a service that can connect your loan application to a variety of lenders so you can more easily compare rates. Be sure to indicate you’re looking for a VA loan.
  • Navy Federal Credit Union: Navy Federal works a lot like USAA — only people with military connections can join. Navy Federal tends to undercut USAA’s mortgage rates, but it doesn’t usually offer the same level of customer care USAA can provide.


Most of the following information is already available in this review, but these questions continue to come up about USAA, so the answers are worth repeating:

Is USAA Good for Mortgages?

Yes, USAA excels as a mortgage lender, especially for VA loans, which give veterans a way to buy a home with no money down and no Private Mortgage Insurance premiums. This combination of factors is practically unheard of for civilians.

Does USAA Pay Closing Costs?

No, as a USAA borrower, you will still need to pay closing costs on your loan. Closing costs include legal fees as well as lender’s fees. Sometimes the home’s seller will agree to help pay a portion of closing costs, though the VA limits this practice.

You could finance your closing costs into your loan, but this adds to your debt and your monthly house payments.

Is USAA a VA-Approved Lender?

Yes, USAA has the authorization to issue VA loans. In fact, VA loans make up a sizable chunk of USAA’s mortgage loans.

A lot of other banks have VA authorization as well.

What Credit Score Is Needed for USAA VA Loan?

You’ll need a credit score of at least 620 to qualify for a VA mortgage with USAA. A higher credit score can often lead to a better interest rate, saving you thousands of dollars throughout the term of your loan.

Who Should Use USAA for a Mortgage?

For most USAA members who are shopping for a VA mortgage, USAA offers a winning combination: competitive interest rates, VA-knowledgeable staff, and easy access to loans.

But members who want the lowest interest rate in the marketplace should consider comparing rates on LendingTree or joining Navy Federal Credit Union.

Members who’d like to meet with a loan officer at a local branch office should consider Chase or another leading national bank.

Members who want the very best and fastest online access to a VA loan should consider Rocket Mortgage.

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