USAA Mortgage Review 2022

USAA at a glance

USAA is a financial services firm open to current and honorably discharged military members and their spouses and children. The firm offers mortgages through USAA Federal Savings Bank and specializes in VA loans for military-connected borrowers. USAA charges no fees on VA Interest Rate Reduction Refinance Loans, and is competitive on rates and fees for all other loans, too. It serves all 50 states and the District of Columbia, but not through a network of local offices; USAA is "100% consumer direct," meaning most business is conducted over the phone or online.

Here’s a breakdown of USAA's overall score:

• Variety of loan types: 3 of 5 stars

• Ease of application: 5 of 5 stars

• Rates and fees: 3 of 5 stars

• Rate transparency: 3 of 5 stars

» MORE: Compare USAA to other mortgage lenders

USAA mortgage loan types

Loans backed by the Department of Veterans Affairs are USAA's sweet spot. In fact, about three-quarters of USAA mortgages are VA loans.

"While we offer many mortgage options to our entire membership base, USAA has traditionally specialized in VA loans," Mark Burrage, a USAA mortgage executive, said in an email. The lender's average home loan size is $270,642, according to 2020 Home Mortgage Disclosure Act data.

Given USAA's military membership, VA loans with 0% down are its core offering for first-time home buyers. USAA doesn't offer FHA or USDA loans.

Home equity loans and lines of credit are also unavailable at USAA.

USAA ease of application

Because USAA's membership has traditionally relied on a long-distance relationship rather than a brick-and-mortar local presence, technology is key.

"We provide a robust digital mortgage experience," Burrage said. "From the ability to apply online, import your bank statements, electronic document uploads and e-sign loan documents. We prefill a large part of the mortgage application based on information in the member's profile — which reduces needless keystrokes and speeds up the process."

When a user receives an official loan estimate, the data for the loan is rendered in real time as an explanatory video, breaking down all of the information contained in the estimate.

Loan officers are typically available by phone Monday through Friday from 7 a.m. to 6:30 p.m. Central time for new loans and 8 a.m. to 5 p.m. Central for loans in process. There is a single point of contact through the initial loan stage.

USAA 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:

• USAA earns 2 of 5 stars for average origination fee.

• USAA earns 3 of 5 stars for offered mortgage rates compared with the best available rates on comparable loans.

USAA's VA Interest Rate Reduction Refinance Loan, or VA IRRRL, has no origination fee, and the lender says it covers the appraisal, title and VA funding fee.

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.

» MORE: 'Should I buy points?' calculator

USAA mortgage rate transparency

USAA mortgage rates are available online but are not customized by a user's credit score, location or loan details. The USAA rate webpage shows purchase and refinance mortgage rates, and makes it fairly easy to see if discount points have been applied to lower the displayed rate. To get a customized rate quote, you'll need to contact a USAA loan officer or start an online application.

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