USAA Mortgage Review

USAA mortgage rates

ProductInterest RateAPR
30-year fixed rate VA loan3.250%3.463%
15-year fixed rate VA loan3.750%4.155%
5/1 ARM rate VA loanContact lender for details4.125%

USAA is not your traditional lender — this bank and mortgage provider focuses its services on military members and their families, and in turn only offers mortgages to active duty military, veterans and military spouses. It specializes in VA loans, which is the only mortgage it offers. While it doesn’t provide alternatives — even federally-backed loans such as FHA and USDA loans — USAA is a no-nonsense and transparent lender to consider if you can qualify.

Why it might pique your interest

USAA offers fixed-rate and adjustable-rate VA mortgages, including jumbo VA loans. VA loans come with the advantage of no down payment requirement, but they are only available to current military members, their families or veterans who qualify. Additionally, VA loans usually don’t require private mortgage insurance or PMI. 

USAA is very upfront about rates, and even offers updated sample rates on its website. It’s also clear about needing to see a 620 credit score from applicants, though the VA does not require a minimum credit score. USAA discloses that borrowers must take out a loan for at least $50,000, which many competitors don’t include online. 

First-time homebuyers who are confident that a VA loan is right for them can benefit from USAA’s expertise and simplified offerings. It also offers refinance options for both VA loans and some conventional mortgages.

USAA mortgage overview

Loan options:

  • VA 15-year fixed 
  • VA 30-year fixed
  • VA 5/1 ARM 
  • VA jumbo loan

Pros and cons

Pros 

  • Very transparent about rates, credit score requirements and other important information 
  • Specialize in VA home loans
  • Convenient for current customers who are already familiar with USAA

Cons 

  • Only offer VA loans, not FHA or USDA loans
  • Not available to non-military borrowers 

The final word 

USAA is a top choice for military families, and it specializes in VA home loans. Its transparent site offers useful information you need to shop for rates, and it’s clear about qualifications and closing costs. 

Borrowers who choose USAA for their VA home loan can expect a more tailored experience, but at the cost of exploring other loan options. If you know that a VA mortgage is the best option for you, USAA is worth considering.  

FAQ

Is USAA good for mortgages?

If you’re looking for a VA loan it’s hard to beat the offerings from USAA. As you might expect, considering its focus on financial products for active and retired military personnel, USAA excels when it comes to VA loans, offering no-down payment loans and mortgage loans without mortgage insurance. It isn’t just VA loans either. USAA has extensive experience with first-time buyers. With a down payment requirement of just 3% on mortgage loans for first-time homebuyers, USAA makes for a great alternative to traditional mortgage loans or FHA loans. In short, USAA is good for mortgages if you’re a veteran or active military.

Does USAA pay closing costs?

Closing costs are part of what you have to pay for obtaining a mortgage and buying property, include title search and insurance, property appraisals, and mortgage points. USAA does not cover closing costs on mortgages, which typically cost anywhere from 1% to 5% of the loan amount. In addition, if the borrower is using a VA loan then the closing costs will need to be paid out of pocket. That’s a requirement. It is possible in some cases to negotiate a deal in which the seller covers some or all of the closing costs. Borrowers should make it clear to their real estate agent from the start if this is their intention.

What credit score does USAA use for mortgages?

The VA has no minimum credit score requirement, however USAA recommends borrowers meet the minimum 620 credit score used by most lenders. The lending guidelines follow those of the VA as well as those of government-sponsored lending agencies Fannie Mae and Freddie Mac. In light of that, it uses the following versions of the classic FICO credit score:

  • Equifax Beacon® 5.0
  • Experian®/Fair Isaac Risk Model V2SM
  • TransUnion FICO® Risk Score, Classic 04.

All three reports can be obtained through a residential mortgage credit report, which is a compiled credit report that gives a complete picture of a borrowers’ creditworthiness.

Rayna Perry

Personal Finance Copywriter

Rayna Perry is a Personal Finance Copywriter at Interest.com and a Public Relations major at the University of Georgia. When not writing about personal finance, she is usually watching a great movie or creating a new playlist.