01 Jun USAA Federal Savings Bank Review
USAA is an organization that offers financial services to current and honorably discharged military members and their family members. It provides mortgages through USAA Federal Savings Bank and specializes in VA loans for military members and veterans. On VA Interest Rate Reduction Refinance Loans, USAA does not charge any fees, and its rates and costs are competitive across the board.
If you’re thinking about going with USAA, it’s essential to know how their loan terms and interest rates stack up with those other lenders offer. This in-depth USAA Mortgage Review will help you decide if it’s the appropriate lender for you.
USAA Mortgage Review: Overview
USAA ( United Services Automotive Association) is a full-service financial organization that caters to military members and their families. Initially, it began as an automobile insurance provider in 1922. However, the company’s services have expanded to encompass mortgages, banking, insurance policies, and investment opportunities.
Members include almost 13 million veterans, active-duty military personnel, and their families. USAA is not a publicly traded firm, and it is not linked with the United States Department of Veterans Affairs (VA). Instead, it is a non-profit organization that primarily serves its members. To get a mortgage or participate in any of USAA’s other programs, you must be a member, just like a credit union.
The company only has physical locations in Texas, Colorado, Maryland, and New York. Yet, it has a robust online presence.
Related Article: VA Loan Calculator: Estimate Your Monthly Payments
USAA Home Loan Types and Rates
USAA’s sweet spot is loans backed by the Department of Veterans Affairs. With USAA serving military families, it’s only natural that the company’s VA loan offerings are its strong suit. More than half of USAA’s mortgage business comes from VA loans.
Due to its no-fee structure, the VA IRRRL (Interest Rate Reduction Refinance Loan) is difficult to compete with. VA borrowers can also refinance up to 100% of their home’s value with USAA. The company also offers 10, 15, 20, and 30-year terms for its USAA VA loans.
Most USAA home loans require a credit score of 620 or higher.
VA Jumbo Loan
Jumbo mortgages exceed the lending limit established by the Federal Housing Finance Agency for a specific area. The process for obtaining jumbo loans is similar to getting standard loans. Basically, the only difference is how much money is being borrowed.
No private mortgage insurance is required for jumbo loans up to $3 million with USAA. The entire loan procedure is personalized, according to the official USAA website, and you’ll need to contact a USAA loan officer to help you through it.
VA Home Loan Refinance
Refinancing is also available through USAA, including VA and standard loans. This bank does not offer home equity lines of credit (HELOCs).
USAA offers the VA IRRRL program. It gives members several cost benefits, including no origination fee and reimbursement for appraisal, title, and the VA funding fee. According to the lender’s website, the average borrower will save more than $2,600 in closing expenses.
Only members refinancing a USAA mortgage serviced by Nationstar Mortgage, a USAA sub servicer, are eligible for the conventional option. The charge structure for traditional refinances is as follows:
- All mortgages with a balance of $129,500 or more: A flat price of $1,295 is charged.
- All mortgages with a balance of less than $129,500: 1% of the loan’s entire amount.
Also Read: Home Refinancing Benefits
USAA Pros and Cons
Pros of USAA
- A wide array of account options — In contrast to other current online-only banks, USAA Bank provides a full range of checking, savings, and investment accounts.
- A network of 60,000+ ATMs with fee reimbursement — USAA’s ATM policy is unrivaled. For the first ten withdrawals from over 60,000 ATMs, they don’t charge any fees, and they’ll even cover up to $15 of the other bank’s costs.
- Excellent mobile app — USAA’s mobile app for iOS and Android has received over four stars in both app stores for being easy to use and comprehensive.
- Exceptional customer service — Military families are well-served by USAA Bank and USAA in general. USAA Federal Savings Bank is a safe bet if you don’t want your bank to make the news for the wrong reasons.
- Auto loans with great rates — When it comes to auto loans, USAA VA loan rates are as low as 2.89 percent, which is unbeatable even when compared to peer-to-peer lenders.
Cons of USAA
- Restricted to only military personnel — USAA Bank is only available to military personnel and their immediate families.
- There are only four physical locations — A significant drawback of USAA is that it only has a few physical sites in the United States. Customers that require assistance will most likely have to do so online or over the phone.
- You can find a higher APY elsewhere — The return rates of USAA Bank are just not competitive. It is better to shop around if your primary objective is to maximize your investment.
Related Article: VA Loan Limits by State
USAA Loan Application Process
Military personnel and their family can create an account online. You must, however, first become a member of USAA. To participate, you’ll need the following items:
- Date of birth
- Contact information
- Social Security number
- Details of your military service (or that of your immediate family members)
- Passport (U.S. citizens)
- Permanent Resident Card (non-U.S. citizens)
With a $25 deposit after you’ve signed up, you can open a checking or basic savings account. Because USAA only has five branches in the United States, you may anticipate doing most of your banking and transactions online or through the mobile app.
Related Article: VA Loan Assumption: An Overlooked Benefit
USAA provides a comprehensive set of mortgage refinancing alternatives, including cash-out refinancing. Refinance rates are relatively competitive compared to those offered by other mortgage lenders. Conforming, VA, FHA, and jumbo mortgages are all available for refinancing, with terms of 15- or 30-year fixed-rate loans or 5-year ARMs.
An appraisal is required for a typical home refinance to assess the current property value and how much equity you have. Additionally, you’ll need to pass a credit check and provide proof of income. Fees are comparable to those associated with a home purchase loan.
USAA is great for service personnel who seek the ease and convenience of having all of their financial accounts in one place. It may also be a good solution for young people who want to bank.
However, if you want the best returns on your savings or the best rewards on your debit card purchases, you should look into one of the top online banks. Below are some of the alternatives that dominate the market.
Navy Federal Credit Union
Consider Navy Federal Credit Union Mortgage if you’re searching for a mortgage lender who understands the military community. The lender, like USAA, is a financial product expert for service members and veterans. Navy Federal has a rate match guarantee so that you won’t miss out on a better deal. It offers conventional loans as well, but not the FHA loan.
PenFed Credit Union
PenFed Credit Union has a long history of serving military members, veterans, and their families. However, members do not have to be military members to join. Besides offering solid APYs, PenFed has low fees and minimums. The selection of account options is vast, and it is easy to make withdrawals and deposits to most accounts.
A highly regarded mortgage lender, Quicken Loans is one of the largest in the United States. Its industry-leading online resources are a big reason why borrowers like it. Many home purchasers will find that using these helpful resources makes the mortgage process more approachable.
Quicken should be on your shortlist of lenders unless you strongly prefer face-to-face interactions over online and phones.
USSA Mortgage rates can be found online, but they are not tailored to a user’s credit score, region, or loan specifics. The USAA rate page displays buy and refinance mortgage rates and if discount points have been applied to lower the shown rate.
To get a personalized rate quotation, speak with a USAA loan officer or fill out an online application.
Related Article: Steps to Buying a Home With a VA Loan
The Final Verdict—USAA Mortgage Review
For those who qualify, USAA is a good bank. USAA offers a complete package of sound banking practices, including:
- monthly fee-free checking and savings accounts,
- generous ATM fee policies,
- an APY that comes standard with every checking account,
- several tools and programs to help customers avoid overdrafts and stay on top of their finances.
With its ability to handle almost all types of banking or financial need you might have, this is a one-stop-shop for all your financial needs.
Unfortunately, not everyone has access to USAA, and the superb products and customer service are not available to civilians. Due to USAA’s policies, many people cannot join since it limits membership to military personnel and their immediate families, including only their spouses and children.