USAA is one of the top mortgage loans providers for current and former members of the US military and their families.
But apart from mortgage financing, they also provide most other financial services you and your family will need going forward.
It’s an excellent organization to connect with early in life.
About USAA Mortgage
USAA – short for United Services Automobile Association – is a diversified financial organization, providing insurance, banking, investing, and retirement services to its members. They also provide exclusive benefits, products, and discounts for US military members and their eligible family members.
But you must qualify for membership to join. Membership eligibility includes active military, former military, cadets and midshipmen, and family members of any of the above.
Family includes widows, widowers and remarried former spouses who join USAA before or during the marriage, and individuals whose parents joined USAA. If you are already a member, your children may also be eligible.
The company was founded in San Antonio, Texas in 1922, by a group of 25 US Army officers. The objective of the company was mutual self-insurance for auto insurance, because military personnel were often unable to get coverage through the general market.
The company has 12.4 million members, and total assets of more than $155 billion, including $128 billion in assets under management for its members.
USAA has a Better Business Bureau rating of “A+”, the highest rating on BBB’s scale of F to A+, and has been on file with the agency since 1950.
USAA Mortgage Loans Products and Services
USAA offers a variety of home loan types, including VA Loans, and alternatives, such as conventional mortgages. Here is more about the different loan types they offer:
VA Loans. These are loans for active military personnel and veterans who have a valid Certificate of Eligibility. You can get 100% financing on a property up to $484,350.
Even better, there’s no monthly mortgage insurance with this loan type.
The USAA VA Loan is available for both purchases and refinances of a primary residence, and comes in terms of 15 years and 30 years. They can be either fixed-rate or adjustable-rate mortgages.
Because of their focus on the military, USAA is one of the top VA Lenders and generally one that many people turn to for VA mortgage quotes.
Interest Rate Reduction Refinance Loan (IRRRL). This is a special refinance program available only to refinance existing VA loans. The purpose of the loan is to provide the veteran with a lower interest rate or to convert an adjustable-rate loan into a fixed-rate.
No cash out can be taken on this loan type.
An IRRRL involves a streamlined application process. Not only is less income and credit documentation required, but an appraisal is not usually necessary. USAA charges no origination fee, but there is the VA Funding Fee of 0.50%. However, the borrower can pay that fee through the loan. Some veterans with a service-connected disability rating are also exempt from paying the funding fee.
Conventional mortgages. These loans typically have stiffer credit and income requirements than other loan types. They also commonly require down payments of at least 5% of the purchase price.
But they can be used for the purchase or refinance of a primary residence, second home, or investment property. Loan amounts are available up to $484,350, with terms running from 15 to 30 years.
First-Time Homebuyer Loans. These are conventional loans designed specifically for first-time homebuyers. You can purchase a home with as little as 3% down, on a loan amount of up to $484,350.
The loans are fixed-rate, with a 30-year term, and the lender pays the mortgage insurance premium. Rates on these loans are slightly higher than what they are on other loan types.
Jumbo Loans. These mortgages are available for the purchase or refinance of properties over $484,350. They’re available for loan amounts up to $3 million, and typically require a down payment of at least 20% of the purchase price.
They’re fixed-rate loans with terms of 15 to 30 years, and are available for both military and non-military members.
USAA also offers VA Jumbo Loans. These are also for loan amounts over $484,350, and are available in a 30-year term. Like a regular VA loan, there is no monthly mortgage insurance required, any property can be purchased with 100% financing.
Adjustable-Rate Mortgage (ARM) Loan. This is a 30 year 5/1 VA loan – the initial rate and term are fixed for five years, then the loan becomes a one-year adjustable for the balance of the term.
The initial rate on an ARM loan is generally lower than what it is on a 30-year fixed-rate loan. But because an ARM loan has a variable rate, it’s best for borrowers who plan to stay in the property no more than five years.
USAA Features and Benefits
USAA Banking Services. USAA provides checking and savings accounts, certificates of deposit, credit cards, auto loans, and personal loans.
This will give you an opportunity to maintain your banking with the same company that holds your mortgage. They provide reimbursements for ATMs nationwide, as well as military pay available in advance with direct deposit.
USAA Insurance Services. USAA is first and foremost an insurance company – that’s how the company got started. They provide all types of insurance, including life, auto, home, renter’s, condo, valuable property, and umbrella. Several of these coverages, including home, condo, and flood insurance may even be necessary for the purchase or refinance of your home.
They even provide insurance for your small business and medical coverage for your pets.
USAA Investments. USAA is particularly well known for its long list of mutual funds.
But they also offer stocks, options, ETF’s, and annuities, as well as IRAs and targeted retirement funds. Once you purchase your first home, you’ll become increasingly interested in diversifying your financial assets into various investments and retirement accounts. USAA can help with that when the time comes.
Real Estate Rewards Network. Once you have your mortgage pre-approval, USAA can connect you with real estate agents in your area, who match your particular needs. They work with a network that includes more than 16,000 best-in-class agents from real estate brokerage firms across the country.
You can use the program to get a reward of between $350 and $24,000, based on the sales price of the property you’re buying or selling. (The average reward is $1,230).
The reward is based on a sliding scale.
For example, a property price of under $100,000 will get the $350 bonus. $250,000 – $399,999 will get a bonus of $1,250. The top bonus of $24,000 is for properties at $4 million and up.
Customer Service. Member Support is available by toll-free phone, 24 hours a day, seven days per week.
USAA Mobile App. You can handle all your financial affairs on the app, including banking, insurance, and investments. You can also make mobile deposits, pay bills, send money, and locate ATMs. The mobile app provides a Mobile Wallet for Apple Pay, Samsung Pay, and Google Pay. It can be downloaded at the App Store or on Google Play
USAA Mortgage Loans Borrower Education
For homebuyer education, USAA offers Homebuying 101. If you’re a first-time homebuyer, it can give you a thorough snapshot of what the home buying process will look like. This includes everything from tips on how much home you can afford and buying your first home, to tips for a smooth closing.
You can always enlist the services of experts in the homebuying process – real estate agents, mortgage loan officers, and appraisers – but it’s always a big advantage to have at least some basic knowledge before starting the process.
If nothing else, it will help you to understand the basics, and to ask important questions where necessary.
USAA Mortgage Rates and Fees
USAA Loan Fees. USAA typically charges an all-in origination fee of 1% of the new loan amount. They don’t charge other fees typical to mortgage lenders, such as an underwriting fee or document prep fee.
Typical mortgage charges for title search, appraisal, attorney fees, state taxes, and other fees are payable to third parties.
Discount points can be paid if you want to lower your interest rate, but you’ll have to crunch the numbers to see if that will make sense (USAA provides a calculator on their website to help you make that decision).
Advantages & Disadvantages of Mortgages Through USAA
- USAA has a strong orientation toward veterans and their families. They specialize in VA Loans, and other loan types that will be beneficial for current and former members of the military.
- The availability of banking, insurance and investment services means you can handle all your financial life with one institution.
- 24/7 customer service.
- The Real Estate Rewards Network can provide you with hundreds or thousands of dollars toward your mortgage when you work with a USAA preferred real estate agent.
- USAA does not offer FHA mortgages.
- USAA is limited to active or former military, and their families. It is not available to the general public.
- Most of the loan process takes place by phone; USAA isn’t a full-on online platform, but they’re working on it.
USAA VA Loan Alternatives
Should You Get Your Mortgage Through USAA Mortgage Loans?
USAA is one of the top mortgage loan sources for current and former military personnel and their families.
In addition to a high level of service, the Real Estate Rewards Network offers you an opportunity to earn extra money through the homebuying process toward your mortgage application.
Meanwhile, USAA provides financial services ranging from basic banking services, to investment and retirement, to credit cards, auto loans, and student loans. USAA has the real potential to become your preferred financial institution for life.
If you’d like more information, or if you’d like to apply for a mortgage, visit the USAA Mortgage Loans website.
USAA Disclosure: Use of the term “member” or “membership” refers to membership in USAA Membership Services and does not convey any legal or ownership rights in USAA. Restrictions apply and are subject to change. To join USAA, separated military personnel must have received a discharge type of “Honorable.” Eligible former dependents of USAA members may join USAA. Bank products provided by USAA Federal Savings Bank, Member FDIC and Equal Housing Lender NMLS ID 401058.
Equal Housing Opportunity. The Department of Veterans Affairs affirmatively administers the VA Home Loan Program by assuring that all Veterans are given an equal opportunity to buy homes with VA assistance. Federal law requires all VA Home Loan Program participants – builders, brokers and lenders offering housing for sale with VA financing – must comply with Fair Housing Laws and may not discriminate based on the race, color, religion, sex, handicap, familial status, or national origin of the Veteran.
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These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.
Peggy J Mosley says
I am an Air Force veteran, I am on SSI Disability and I have found a house for 169,900 and I don’t have a down payment, so I would like a loan for 175,000. My credit score is not good, but I have never been late or behind on my rent. I would like to play online, but don’t know where to. If I could get this information today that would help.
Peggy J Mosley
Ryan Guina says
Hello Peggy, Here is our list of favorite VA Loan companies. One or more of these companies should be able to assist you with more information and help you learn if you can qualify for a VA Loan. Best wishes!
John R. Berti says
Please have the appropriate office get in touch with me VIA ELECTRONIC MAIL to discuss the IRRRL program. Once the appropriate office is identified, I will communicate additional particulars of my situation.
For example, I currently have a 15 year VA loan @ 3.375%
I have already paid 48 payments on this loan; thus 11 years more. I have no interest in refinancing another 15-year loan but wish to continue paying off the remaining eleven years at a lower interest rate IF POSSIBLE.
Does the IRRRL program permit an inline rate adjustment so I can continue paying the mortgage at a lower interest rate?
Please respond by electronic mail ONLY. Via telephone means we play telephone tag.
I am under the understanding I can refinance under the IRRRL program to lower the interest rate without an appraisal, without income documentation, NO closing costs. The IRRRL program allows a streamlining into a new lower rate WITHOUT all the required paperwork as when originally obtaining the VA loan.
Since I am already involved with USAA for auto and home insurance, looking forward to learning how you would handle this program.