USAA was started in 1922 by 25 army officers who couldn’t find a company that would insure their vehicles. What started as a small auto insurance company for military members is now a large institution that offers a wide range of financial services, ranging from home loans to life insurance. USAA consistently tops customer satisfaction ratings, considers borrowers with poor to excellent credit scores, and offers highly-competitive rates. Unfortunately, USAA only accepts borrowers who are in the armed forces (and their families).
USAA provides mortgages with interest rates as low as 3.178% APR (as of March 2016). As well as offering loans, USAA can also help find a local real estate agent and offer insurance and home buying advice.
How Do USAA Mortgages Work?
USAA offers three types of home loans: VA loans, fixed-rate loans, and jumbo loans.
VA loans give veterans the possibility of buying a home with no down payment. Fixed-rate loans have the benefit of having smaller down payments and fixed payments throughout the life of the loan. Jumbo loans allow for loan amounts for more than $417k.
Borrowers who pay a down payment of less than 20% will need to purchase private mortgage insurance, which is not included in the APR.
USAA’s mortgage process has five steps:
1. Pre-Qualification. This step takes approximately an hour to complete. Once you have completed the online form you will get a clear picture of what your options are. You will also receive a pre-qualification letter which will help in the home shopping process.
2. Shop Around. Once you have a pre-qualification letter you are ready to shop for a home and negotiate a competitive purchase contract.
3. Documentation. Once borrowers have found the property they want, they will need to provide pay statements, bank statements, and tax returns to confirm the information they provided in the pre-qualification stage. USAA will set up a home appraisal and assign a mortgage processor. This stage usually takes 2 to 3 weeks.
4. Review. USAA underwrites the mortgage application. This involves confirming the financial information provided. Borrowers may have to submit additional documents. This stage can take 2 to 3 weeks.
5. Closing. Borrowers review the closing costs and pay them. USAA coordinates with the title company and schedules the closing day.
What Are USAA Mortgages' Interest Rates?
Interest rates vary based on the credit rating of the homebuyer. Rates can change at any moment, but as of March 2016, USAA rates are as follows:
15-years: 3.178% APR
30-years: 3.777% APR
These rates are based on a $100k loan used to purchase a single-family detached home (primary residence) with a 20% down payment and a credit score of 740. Borrowers with lower rates may receive higher rates.
15-years: 3.477% APR
30-years: 3.642% APR
These rates are based on a $125k loan used to purchase a primary residence (single-family detached home) with a 0% down payment and a credit score of 740.
USAA does not provide rates for its jumbo loans. Click on the link above to receive more information.
How Much Money Can I Borrow from USAA Mortgages?
USAA provides loans of up to $625k.
Which States Does USAA Mortgages Operate In?
USAA Mortgages operates in all states but only accepts people (and their families) who are in the armed forces.
How Is USAA Better Than Other Lenders?
- The USAA has an A+ rating with the BBB and an A++ (Superior) rating with A.M. Best.
- It has low rates and flexible eligibility criteria.
- USAA does not offer ARM home loans.
- USAA is only available to members of the armed forces and their families, so most people cannot benefit from its excellent rates and terms.
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