USAA Mortgages and Home Loans

Tylene Welch  | 

Are you ready to buy your new home? If you’re a past or current member of the military, or related to a member of the military — you should consider getting your mortgage or home loan through USAA bank. The United Services Automobile Association is dedicated to serving those who’ve served our country by providing insurance plans, loans, and banking options.

USAA offers mortgage loan options as well as guidance through the entire home buying process:

  1. Getting pre-approved
  2. Finding a real estate agent
  3. Completing your mortgage application
  4. Gathering information
  5. Closing on your dream home

Let’s dig into your USAA mortgage loan options, rates, fees, credit score requirements and whether or not you should choose USAA.

USAA Mortgages and Home Loans

USAA mortgage offers VA loans, conventional loans, and jumbo loans of up to $3 million. They do not offer FHA or USDA loans. Here’s some more information on the mortgage loans USAA offers.

VA Loans

VA home loans are a type of mortgage loan backed by the U.S. Department of Veterans Affairs, meaning they set the requirements for these loans and they guarantee the loan but they do not originate the loan — that’s where USAA comes in.

With nearly two-thirds of their mortgages backed by the VA, these are USAA’s specialty. USAA offers fixed-rate VA mortgage loans in 10, 15, 20, and 30-year terms; including 30-year jumbo VA loans and a 5/1 adjustable rate mortgage option.

VA loans are exclusively for veterans, military members and their direct dependents. VA loans offer many benefits, including zero down payment required to obtain the loan. You can learn more information and apply for a loan at USAA’s VA Home Loan page.

USAA Mortgages

Aside from VA loans, USAA also offers:

Conventional loans available in 30, 20, 15, and 10-year fixed-rate terms. The conventional loan is a good choice if you’re looking to put down at least 5 percent on your mortgage loan. You can view current USAA mortgage rates at their site.

Conventional 97 loans as an alternative to the FHA loan and a perfect option for first-time home buyers. These loans are available in 30-year terms and allow for a down payment as low as 3 percent of the total loan amount. Additionally, conventional 97 loan owners don’t have to worry about mortgage insurance, which can save a considerable chunk of change, on average, $100 per month.

Jumbo loan options are also available for 15 and 30-year terms. The USAA jumbo loan requires a 20 percent down payment and the VA jumbo loan allows for a lower down payment but only offers a 30-year term. USAA also offers a VA 5/1 adjustable rate jumbo loan option. Jumbo loans are typically used for loans of at least $453,100.

If you’re interested in refinancing your existing loan, consider the VA Interest Rate Reduction Refinance Loan (IRRRL) with no origination fee. USAA covers the title, appraisal, and VA funding fees for IRRRLs.

USAA also offers loans and refinancing options for vacation and investment properties, as well as adjustable rate mortgage loans. They recommend calling their customer service line at 800-531-0341 if you want to learn more about these options.

USAA Mortgage Rates and Fees

Mortgage rates are nearly constantly changing, but you can view the current USAA rates on Today’s Mortgage Rates page. They post their rates online every day, and won’t customize your rate based on your credit score or loan details. They also maintain consistent rates across the United States, where other lenders might adjust pricing by location. USAA mortgage rates are known to be competitive in the market, but that doesn’t mean you shouldn’t shop your options.

USAA mortgage requirements are similar to other lenders. Loan requirements include:

  • A minimum FICO score of 620.
  • A minimum loan amount of $50,000.
  • A maximum loan amount of $3 million.

USAA charges a one point, or one percent, fee on home loans, and they often cover extra fees and expenses that borrowers would be responsible for when working with a different lender.

USAA Credit Score Requirements for Home Loans

It doesn’t matter what your credit looks like if you’re not a USAA member. You must be a USAA member to apply for a USAA mortgage loan and you must be an active member of the military, a direct dependent of a military member, or have honorably served in the past to become a USAA member.

The minimum FICO score you must have to apply for a USAA mortgage is 620. USAA does not consider alternative credit data. But to get the best rates from any lender, you’ll want to get your score up into the range of 740 or higher. Learn how to buy a house with bad or no credit if you’re struggling to reach the minimum credit score for a USAA mortgage.

Pros and Cons of Getting a Mortgage Through USAA

Not everyone will find the USAA home mortgage options to work for them — and that’s OK. USAA offers some attractive benefits like no hidden fees, user-friendly online systems, financial advice, a real estate rewards network, and an A+ rating from the Better Business Bureau.

But some members have expressed complaints regarding customer service and disorganization in the loan application process. You’ll also struggle to find brick-and-mortar locations if you prefer to do business in person rather than online or over the phone.

That being said, USAA is constantly improving their online systems, trying to make it easier for everyone to complete the entire loan process online. And USAA offers competitive mortgage interest rates to its members. If you’re looking to sell, buy, or refinance your home and you’re already a USAA member — consider your options here first.


Image Source: https://depositphotos.com/

Tylene is a freelancer in Boise, Idaho. She's a self-taught personal finance hacker with zero debt. She eats avocado toast for breakfast.

This post was updated June 21, 2018. It was originally published June 23, 2018.