USAA Mortgage Review: What You Need to Know

The United Services Automobile Association (USAA) is a diversified financial services company founded in San Antonio, Texas. Originally established as an auto insurance company for Army officers, USAA now provides full-service banking, insurance, investment, and retirement products to more than 11 million members. It offers 15- and 30-year conventional mortgages, U.S. Department of Veterans Affairs (VA) loans and jumbo loans to members. In 2014, approximately 70% of mortgages originated by USAA were VA loans. Additional USAA benefits for members include cash back rewards for homes purchased through the Real Estate Rewards Network. USAA membership is available to active and retired officers, enlisted military personnel, and widows or former spouses of USAA members.

History

USAA was founded by a group of 25 Army officers to insure automobiles. By 1969, the company had over 700,000 members, and by 1972, it serviced five out of six active-duty officers. In 1973, it opened USAA Federal Savings Bank. By 1999, USAA had 3.8 million members and launched the USAA.com website. As of 2016, the company had 28,000 employees serving 11.4 million members. The company's net worth for 2015 was $27.8 billion. In April 2016, USAA announced that its profits for 2015 dipped by one-third, from $3.4 billion in 2014 to $2.3 billion.

Mortgage Products Offered

Many USAA members are active or former military personnel, so the company's most popular mortgage products are 15- and 30-year VA loans. These loans have lower interest rates than conventional 15- and 30-year mortgages and require no down payment. To be eligible for a VA loan, veterans must have received an honorable discharge and meet qualifying service requirements. Spouses of veterans may also qualify for VA loans if they meet VA requirements. For example, surviving spouses of veterans or of prisoners of war may qualify for a VA loan. USAA also offers 15- and 30-year conventional mortgages. Conventional mortgages require a small down payment, and nonmilitary members can qualify for these products. Borrowers may also qualify for jumbo loans for properties valued at more than $417,000.

Mortgage Rates

As of November 2016, the USAA rate for a 30-year VA loan was 3.50%-3.75%, and the annual percentage rate (APR) was 3.813%-4.025%. The 15-year VA loan had an interest rate of 3.125-3.375% and an APR of 3.683-3.862%. These rates vary based on an array of factors like if the home is your primary residence and the size of your down payment.

 USAA's conventional mortgages have interest rates of 3.875-4.125% for 30-year loans and 2.875-3.125% for 15-year loans. The conventional APR rates are 4.012%-4.22% for 30-year fixed mortgages and 3.185%-3.309% for 15-year fixed mortgages. USAA rates for jumbo loans vary depending on the value of the property and other factors, including borrower credit profiles.

What Customers Are Saying

The best place to find a range of reviews specifically about USAA mortgages is on the USAA website. These reviewers gave the association's mortgages an average of three out of five stars, based on 953 reviews. Satisfied customers rated USAA high on fees and mortgage points, relative to other lenders. Customers also gave USAA high points on the home buyers advantage program, which facilitates smooth transitions between real estate agents and loan officers in the home buying process. However, other customers gave USAA low ratings for poor customer service. Reviewers said that loan processors did not return phone calls. Some reviewers also complained that USAA was slow to process mortgages and caused closing delays.

Customers on Credit Karma gave USAA an average of 3.4 out of five stars, based on 109 reviews. However, USAA reviews on Credit Karma are not solely based on USAA mortgages, as they cover a variety of USAA services. Reviewers gave USAA an average of three stars in the application, customer service and account holder categories. Some reviewers with multiple USAA services, in addition to mortgages, gave home loans five stars overall. However, multiple reviewers gave the company low ratings for slow mortgage processing times that resulted in delayed closed dates and lost deals.