Navy Federal Credit Union Mortgage Review 2022

Good for: military members and their families looking for low-down-payment mortgages.
Nov 3, 2021

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Our Take

4.5

NerdWallet rating 

The bottom line:

Navy Federal has a military focus with an online application and easy-to-find rates, but the website does not offer customized rates based on credit score or other factors before you apply.

Navy Federal
Navy Federal: NMLS#399807
National / regional
National
Min. down payment
0%
Loan types and products
Purchase, Refinance, Jumbo, Fixed, Adjustable, VA

Pros & Cons

Pros

  • Offers a wide range of affordable mortgage products designed for military members.
  • Has an online application for preapproval.
  • Offers low rates compared with most lenders, according to the latest data.

Cons

  • Website does not provide customized mortgage rates based on credit score or other factors before you apply.
  • Credit union membership is limited to veterans and current military members, their families, and certain federal employees, retirees and contractors.

Compare to Other Lenders

NerdWallet rating 
NerdWallet rating 
NerdWallet rating 
NerdWallet rating 
NerdWallet rating 
Min. credit score

620

Min. credit score

620

Min. credit score

620

Min. credit score

620

Min. credit score

620

Min. down payment

3%

Min. down payment

3%

Min. down payment

3%

Min. down payment

3%

Min. down payment

3%

Loan types and products

Purchase, Refinance, Jumbo, Fixed, Adjustable, FHA, VA

Loan types and products

Purchase, Refinance, Home Equity, Reverse, Jumbo, Fixed, Adjustable, FHA, VA, USDA

Loan types and products

Purchase, Refinance, Fixed, Adjustable, FHA, VA, USDA

Loan types and products

Purchase, Refinance, Jumbo, Fixed, Adjustable, FHA, VA

Loan types and products

Purchase, Refinance, Jumbo, Fixed, Adjustable, FHA

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Full Review

Tap to learn how COVID-19 may affect mortgage shopping

The coronavirus pandemic introduced some new challenges to getting a mortgage. Many lenders facing high loan demand and staffing issues increased their fees, adjusted minimum required credit scores or temporarily suspended certain loan products. While some products and business practices have returned to pre-pandemic levels, you might still find delays and limited options. If you can’t pay your current home loan, refer to our mortgage assistance resource. For information on how to cope with financial stress during this pandemic, see NerdWallet’s financial guide to COVID-19.

Navy Federal Credit Union at a glance

Navy Federal Credit Union offers a broad menu of mortgages, including no-down-payment home loans tailored to its members.

Founded in 1933, the credit union's mission is to serve the military community. Veterans, active-duty military and their families are eligible for membership. U.S. Department of Defense civilian employees, retirees and some contractors can also join, as well as federal employees assigned to Defense Department installations.

The credit union, based in Vienna, Virginia, is the largest in the world, with more than 10 million members. It has nearly $150 billion in assets, according to internal data.

Here’s a breakdown of Navy Federal’s overall score:

  • Variety of loan types: 4 of 5 stars

  • Ease of application: 5 of 5 stars

  • Rates and fees: 3 of 5 stars

  • Rate transparency: 4 of 5 stars

Navy Federal mortgage loan types

Members can choose from a wide variety of purchase and refinance loans, including mortgages with no- and low-down-payment requirements. Navy Federal offers the following:

The adjustable-rate loan option can be especially useful to families who must relocate every few years. The credit union also offers mortgages for second homes and investment properties.

Navy Federal has two cornerstone loans geared to military members and their families: the HomeBuyers Choice Mortgage and the Military Choice Mortgage.

The HomeBuyers Choice program is for first-time home buyers. It offers fixed-rate loans of 30 years with up to 100% financing and no mortgage insurance premiums. The 1.75% funding fee can be waived in favor of a higher interest rate, which minimizes the amount of cash you need at closing.

The Military Choice program has the same benefits as the HomeBuyers Choice, but with special pricing on mortgage interest rates and origination fees for active-duty and veteran borrowers, according to the lender. Also, Navy Federal’s standard 1% loan origination fee can be rolled into the loan or waived in exchange for paying a higher mortgage rate, further reducing the amount of cash you need to close.

Navy Federal’s loan officers also have deep experience with the needs of military families, such as navigating the mortgage process in the midst of a relocation or deployment, or meeting the stringent documentation requirements for a VA loan, the lender says. The credit union was one of the top 10 VA mortgage lenders in the country by volume in 2020, according to the Department of Veterans Affairs.

Navy Federal ease of application

Navy Federal has a digital application platform called HomeSquad, which lets you get preapproved for a mortgage online. In some cases, you can get preapproved instantly, the lender says. With the technology, you can upload documents, connect to your bank accounts to verify assets, get notified when you reach milestones, receive personalized help from credit union representatives and check the status of the loan.

You can also start an application over the phone or in person at a Navy Federal branch. No matter how you apply, a home loan advisor can help you choose the right mortgage for your situation.

The underwriting model for Navy Federal lets loan officers evaluate a borrower’s situation using alternative credit data in some cases instead of adhering strictly to traditional credit scores. Navy Federal can evaluate a buyer’s borrowing risk, taking the full financial picture into consideration.

Loan officers can look at whether a borrower pays rent and utility bills on time, keeps an existing Navy Federal banking account in good standing and makes timely payments on other credit accounts.

Navy Federal also offers a free service that matches the member with a real estate agent and gives cash back at closing when the property is bought or sold through the referred agent. The cash back amount can range from $400 to $8,000, depending on the home’s purchase price. The program is not available in Iowa and does not offer cash back in Arkansas, Louisiana or Oklahoma.

Navy Federal mortgage rates and fees

One of the most important considerations when choosing a mortgage lender is understanding what the loan will cost. In order to provide consumers with a general sense of what a lender might charge, NerdWallet scores lenders on two factors regarding fees and mortgage rates, according to the most recently available Home Mortgage Disclosure Act data:

  • Navy Federal earns 2 of 5 stars for average origination fee.

  • Navy Federal earns 4 of 5 stars for offered mortgage rates compared with the best available rates on comparable loans.

Borrowers should consider the balance between lender fees and mortgage rates. While it's not always the case, paying upfront fees can lower your mortgage interest rate. Some lenders will charge higher upfront fees to lower their advertised interest rate and make it more attractive. Some lenders just charge higher upfront fees.

You can decide to buy discount points — a fee paid with your closing costs — to reduce your mortgage rate.

Deciding whether to pay higher upfront fees is a matter of considering how long you plan to live in your home and how much cash you have to apply toward closing costs when you sign the loan paperwork.

Navy Federal mortgage rate transparency

Navy Federal’s website displays sample interest rates for most of the mortgages it offers, along with annual percentage rates. You can also see monthly payment examples for certain products. The website does not offer personalized rate information based on location or credit score.

You can lock in rates on purchase loans for up to 60 days after preapproval. If you find a better rate with another lender, Navy Federal says it will match that rate or give you $1,000 at closing.

Methodology

NerdWallet’s overall ratings for mortgage lenders are evaluated based on four major categories: variety of loan types (purchase, refinance, fixed and adjustable, for example), ease of application, rates and fees and rate transparency. Among the factors we consider when scoring these categories are options to apply for and track loans online, the level of detail about mortgage rates on lender websites and our analysis of the rates and fees lenders reported in the latest available Home Mortgage Disclosure Act data. These scores generate ratings from 1 star (poor) to 5 stars (excellent).