If you’re a military service member, veteran, or spouse, and you’re looking for a mortgage, you might have heard about USAA. USAA is a financial services company that offers a wide range of products, including mortgages. In this article, we’ll take a closer look at USAA mortgages, including what they offer, their eligibility requirements, the application process, and more.
Table of Contents
- What is USAA?
- What is a USAA mortgage?
- Types of USAA mortgages
- VA loans
- Conventional loans
- Jumbo loans
- Adjustable-rate mortgages (ARMs)
- Eligibility requirements for USAA mortgages
- Military service members and veterans
- Spouses of military service members and veterans
- Non-military members
- Applying for a USAA mortgage
- Pros and cons of USAA mortgages
- Frequently asked questions about USAA mortgages
What is USAA?
USAA stands for United Services Automobile Association. It is a financial services company that primarily serves military service members, veterans, and their families. USAA offers a wide range of financial products, including insurance, banking, investing, and mortgages.
What is a USAA mortgage?
A USAA mortgage is a home loan offered by USAA to eligible borrowers. USAA mortgages are known for their competitive rates and flexible terms. They offer a variety of mortgage options, including VA loans, conventional loans, jumbo loans, and adjustable-rate mortgages.
Types of USAA mortgages
VA loans
VA loans are a type of mortgage that is guaranteed by the Department of Veterans Affairs (VA). These loans are available to eligible military service members, veterans, and their spouses. VA loans offer several benefits, including no down payment, no private mortgage insurance (PMI), and competitive interest rates.
Conventional loans
Conventional loans are mortgages that are not guaranteed by the government. These loans typically require a down payment of at least 3% and private mortgage insurance (PMI) if the down payment is less than 20%. USAA offers both fixed-rate and adjustable-rate conventional loans.
Jumbo loans
Jumbo loans are mortgages that exceed the conforming loan limit set by Fannie Mae and Freddie Mac. In most parts of the country, the conforming loan limit is $548,250 for a single-family home. Jumbo loans are available for borrowers who need to finance a higher-priced home.
Adjustable-rate mortgages (ARMs)
Adjustable-rate mortgages (ARMs) have an interest rate that can change periodically over the life of the loan. ARMs typically have lower initial interest rates than fixed-rate mortgages, but the rate can adjust up or down based on market conditions. USAA offers several different types of ARMs, including 5/1 ARMs and 7/1 ARMs.
Eligibility requirements for USAA mortgages
To be eligible for a USAA mortgage, you must meet certain requirements. The specific requirements depend on the type of mortgage you are applying for.
Military service members and veterans
If you are a military service member or veteran, you may be eligible for a VA loan. To qualify for a VA loan, you must meet certain service requirements, such as serving at least 90 consecutive days during wartime or 181 consecutive days during peacetime.
Spouses of military service members and veterans
Spouses of military service members and veterans may also be eligible for a VA loan. To qualify, the service member or veteran must have died in the line of duty or as a result of a service-related disability.
Non-military members
USAA also offers conventional loans to non-military members, but the eligibility requirements are stricter. To be eligible for a conventional loan from USAA, you must have a credit score of at least 620, a debt-to-income ratio of 43% or less, and a down payment of at least 3%.
Applying for a USAA mortgage
If you’re interested in applying for a USAA mortgage, the first step is to visit their website or call their customer service line. You’ll need to provide some basic information, such as your name, contact information, and the type of mortgage you’re interested in.
From there, a loan officer will work with you to gather the necessary documentation and complete the application process. The specific requirements and documents needed will depend on the type of mortgage you’re applying for, but typically include things like income verification, credit reports, and property appraisals.
Pros and cons of USAA mortgages
Like any financial product, USAA mortgages have both pros and cons. Here are some of the advantages and disadvantages to consider before applying:
Pros
- Competitive interest rates: USAA offers competitive rates on all of their mortgage products.
- Variety of mortgage options: USAA offers a wide range of mortgage options, including VA loans, conventional loans, jumbo loans, and ARMs.
- Flexible terms: USAA offers flexible terms on many of their mortgage products, including adjustable-rate mortgages.
- Excellent customer service: USAA is known for their exceptional customer service, with high ratings from organizations like J.D. Power.
Cons
- Eligibility requirements: To be eligible for a USAA mortgage, you must meet certain eligibility requirements, which may be more restrictive than other lenders.
- Limited physical locations: USAA is primarily an online lender, which may be a disadvantage for borrowers who prefer to work with a local lender.
- Fees: Like any lender, USAA charges fees for their mortgage products, including origination fees and closing costs.
Frequently asked questions about USAA mortgages
- What is the minimum credit score required to get a USAA mortgage?
- The minimum credit score required for a USAA mortgage depends on the type of mortgage you’re applying for. For a VA loan, there is no minimum credit score requirement, but for conventional loans, you must have a credit score of at least 620.
- Can I apply for a USAA mortgage if I’m not a military service member or veteran?
- Yes, USAA offers conventional loans to non-military members, but the eligibility requirements are stricter.
- How long does it take to get approved for a USAA mortgage?
- The approval process for a USAA mortgage can vary depending on a variety of factors, but typically takes between 30 and 45 days.
- Does USAA charge fees for their mortgage products?
- Yes, USAA charges fees for their mortgage products, including origination fees and closing costs.
- What types of mortgages does USAA offer?
- USAA offers a variety of mortgage options, including VA loans, conventional loans, jumbo loans, and adjustable-rate mortgages.
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