If you are looking at getting a mortgage anytime soon, this Navy Federal Credit Union mortgage review will provide you essential information that you need to be able to come up with an informed decision – whether this lending company is the way to go or not.
In a report published by Statista, it says that the “mortgage industry of the United States has gone through several distinct phases of evolution that have allowed it to reach its current status as the largest and most complex home-financing market all over the world.“
Year after year, the numbers continue to rise, and in fact, there is no sign of a decrease in numbers. Mortgage loans have become (and would probably stay as it is) the country’s largest of debt among American consumers.
As of 2018, the total value of mortgage debt outstanding in the United States amounted to $15.4 trillion, and again, experts predict this number is set to rise even in the future.
If you are eyeing to engage in mortgage debt anytime soon, the good news is, there are a lot of lending companies or financial institutions that offer such products and/or services.
You got a lot of options to choose from, and in fact, one of them is the Navy Federal Credit Union, which is what we are going to talk about today.
Through this Navy Federal Credit Union mortgage review, we hope to provide you with all the information you need before you head on to the company and apply for a mortgage.
In particular, we are going to tackle the following:
- Who is the Navy Federal Credit Union?
- What are the Navy Federal Credit Union mortgage products available?
- Who qualifies for a Navy Federal Credit Union mortgage?
- How to apply for a Navy Federal Credit Union mortgage?
- Important things you need to know about Navy Federal Credit Union mortgage
- What are the pros and cons of the Navy Federal Credit Union mortgage?
WHO IS THE NAVY FEDERAL CREDIT UNION?
Established in 1933, the Navy Federal Credit Union offers a number of financial services to particularly to its military members. The Navy Federal Credit Union serves over 9 million members of the military community across all 50 states.
All qualifying members may obtain mortgage products, which include Federal Housing Administration loans, Veterans Affairs loans, as well as conventional loans, and mortgage refinancing.
As a member of the credit union, one may qualify to borrow money for up to $50,000. Meanwhile, Navy Federal’s maximum annual percentage rate (APR) for personal loans is 18%, which is considerably lower as compared to the maximum APR many other lenders out there.
Apart from military service members, Navy Federal Credit Union also opens its doors for membership among military members’ families. Thus, they too can get competitive loan rates and top-tier customer satisfaction.
WHAT ARE THE NAVY FEDERAL CREDIT UNION MORTGAGE PRODUCTS AVAILABLE?
As mentioned, the Navy Federal Credit Union provides a wide variety of products to choose from, which include mortgages with no- and low- downpayment requirements.
In particular, the credit union offers the following:
- VA Loan – The VA loan is available exclusively to eligible service members, as well as veterans and their spouses. VA Loans are supported by the Department of Veterans Affairs.
- Conventional Fixed Rate – This particular loan type is an ideal choice for buyers who want a stable monthly mortgage payment.
- Adjustable-Rate Mortgages – Unlike the other mortgage types, these loans start with a low fixed interest rate for the initial term and then adjust according to an index.
With a lot of adjustable-rate loan options, families who need to relocate every few years will definitely find it very useful.
But apart from current homes, Navy Federal also offers mortgages for investment properties as well as second homes.
If you want to know more about Navy Federal’s mortgage products, you may check below video from the credit union itself:
Now, if you are a member of the military or a family of a military member, you may take advantage of Navy Federal’s HomeBuyers Choice Mortgage and the Military Choice Mortgage, both are cornerstone loans that are specific to military members and their families.
Just to give you an idea, here’s a quick brief about the two loan products:
- HomeBuyers Choice – This program is ideal for first-time homebuyers. The HomeBuyers Choice offers fixed-rate loans of 15 or 30 years with up to 100% financing. It also does not have any mortgage insurance premiums. While it does charge a 1.75% funding fee, it can be waived in favor of a higher interest rate. This also helps minimize the amount of money you need at the closing of the loan.
- Military Choice – Meanwhile, although the Military Choice program has the same benefits as the HomeBuyers Choice, it does come with special pricing particularly on mortgage interest rates and origination fees for active-duty and veteran borrowers based on the lender. The credit union’s standard 1% loan origination fee may be rolled into the loan. It can also be waived in exchange for paying a higher mortgage rate, which may further reduce the amount of money you need to close the account. This particular mortgage product is an ideal choice for service members, reservists as well as veterans who have already used up their VA loan benefit.
Apart from these amazing options, the credit union also offers fixed-rate home equity loans with 5-, 10-, 15- and 20-year terms. It also offers a home equity line of credit (HELOC) that comes with a variable interest rate. With this option, the good thing is that for the former option, the lenders do not charge the application or origination fee. As with the HELOC, it does not charge annual or inactivity fees like what other lending companies do.
WHO QUALIFIES FOR A NAVY FEDERAL CREDIT UNION MORTGAGE?
This Navy Federal Credit Union mortgage review will not be complete if we are not going to provide you with the requirements in order to qualify for the mortgage.
Fortunately, the credit union did not set a minimum FICO credit score for members, which means, even if you do not have a good credit score, you may be able to loan money from them.
Furthermore, the credit union has no cap on its debt-to-income ratio.
Meanwhile, although some of Navy Federal’s loans do not require down payment, others do but the amount depends on the type of loan the borrower applies for.
Although it seems that borrowing money from Navy Federal is a breeze with its not so strict requirements, becoming a member of the Navy Federal Credit Union is a different story. Please note that to be able to apply for a mortgage debt with Navy Federal, you need to be a member of the credit union.
Navy Federal Credit Union does have strict membership requirements. To be able to qualify and join the credit union, you must either be:
- an active member or a veteran of any branch of the military
- a Department of Defense civilian employee
- a contractor working at a DOD installation
- a family member of a military member
So, if you belong to any of the above groups, you are definitely qualified to join and be a member of the Navy Federal Credit Union.
Additionally, please take note that only active service members, veterans, and their spouses can qualify for a VA loan. If you are a member through your grandmother or your brother though, you will have to choose another loan offer from the credit union.
HOW TO APPLY FOR A NAVY FEDERAL CREDIT UNION MORTGAGE?
As we have mentioned, to be able to apply for a mortgage, you need to be a member of the Navy Federal Credit Union. Being a member makes the loan application process easier.
Anyway, Navy Federal does have a digital application platform called HomeSquad. You can use this app to get a preapproval for a mortgage. Since it’s done online, there are cases when a borrower gets approved immediately.
The online application process is quite simple and easy. You can just upload documents, connect to your bank accounts when you need to very assets, as well as get notifications whenever you reach certain milestones, check the status of your loan, as well as get personalized help from Navy Federal’s representatives.
If an online application is not feasible, you may opt to start an application over the phone instead. Otherwise, you may visit any Navy Federal branch near you to apply in person.
Regardless if you apply online, over the phone, or in person, there is always a home loan advisor available to help you choose the right mortgage for you depending on your situation.
With Navy Federal’s underwriting model, it allows loan officers to evaluate your situation using alternative credit data instead of observing strictly to traditional credit scores. By taking the full financial picture into consideration, Navy Federal is able to evaluate a borrower’s risk.
Some of the things that a loan officer may look into is if the borrower pays rent and other bills on time, if he or she keeps a Federal banking account in good standing and if the borrower makes timely payments on other credit accounts. All these are taken into account to determine the qualification of a borrower for a loan.
IMPORTANT THINGS YOU NEED TO KNOW ABOUT NAVY FEDERAL CREDIT UNION MORTGAGE
At this point in our Navy Federal Credit Union mortgage review, we are going to talk about other essential matters regarding the credit union’s mortgage. This includes the following:
- Loan Amount
- Loan Terms
- Customer Service
- Online Features
Let’s take a look at each of these items to know more –
Navy Federal Credit Union mortgage loan amount is on a case to case basis. Meaning, it depends on entitlement, as well as your home location. That is why we highly recommend either calling or visiting a Navy Federal branch near you to know the specifics.
Navy Federal mortgage terms range from 10 up to 30 years. The credit union will help determine the ideal terms for you depending on your qualifications. Again, it’s best to check with Navy Federal if you need more specific information.
Generally speaking, credit unions charge lower interest rates as compared to banks and other online lenders. With Navy Federal, the annual percentage rate gets to as low as 2.50%. The exact APR depends on a number of factors like the loan amount, the terms, as well as your overall qualification.
For your reference though, you may see below table. The data is coming straight from what’s stated on Navy Federal’s website:
|Mortgage||Interest Rate (as low as)||APR (as low as)|
|Conventional Fixed Rate||2.250%||2.535%|
|HomeBuyers Choice 4.000%||4.276%|
As a borrower or a potential borrower, it is important to be well-aware of the fees that the lender might charge you for. After all, you do not want to get surprised paying for something you do not know about, right?
So, with Navy Federal, the credit union charges an origination fee of 1%, plus a 1.75% funding fee. However, borrowers are given the option to skip the origination fee is they will agree to a 0.25% increase in their interest rate.
Meanwhile, if you will opt for the credit union’s home equity loan product, this particular product does not charge an application or origination fee. More so, its home equity line of credit does not charge origination, application, annual or inactivity fees as well.
As with closing costs, it varies depending on your interest rate.
In addition, Navy Federal does not charge fees for documents, underwriting, as well as for the application.
You can also get a 0.25% reduction on their interest rate if you opt to set up an automatic payment from a Navy Federal Credit Union account specifically for home equity products.
One thing that Navy Federal Credit Union can brag about is its customer service.
The credit union provides superb customer service. In fact, it is rated five out of five in the 2018 J.D. Power U.S. Primary Mortgage Origination Satisfaction Study, which makes the credit union one of the bests.
Unfortunately, though, Navy Federal is not rank eligible.
As with the Better Business Bureau, Navy Federal Credit Union has earned an A rating.
According to the Consumer Financial Protection Bureau, they have received 90 mortgage-related complaints about Navy Federal Credit Union in 2018. All have been responded on a timely manner.
As mentioned earlier, Navy Federal allows borrowers to apply for a mortgage online. At the same time, members of the union can also access and manage their accounts through its website.
WHAT ARE THE PROS AND CONS OF THE NAVY FEDERAL CREDIT UNION MORTGAGE?
While there are a number of things to like about the Navy Federal Credit Union mortgage, there are also things not to like about, and we are sharing them with you below.
- The credit union offers a wide variety of affordable mortgage products, which are specifically designed for military members and their families.
- Instead of relying on credit score, the credit union looks at nontraditional credit data, such as rent payments, as part of its credit evaluation for certain products.
- It provides an online channel where members can apply for a mortgage. Essentially, the credit union provides a preapproval process and is able to make quick decisions with regards to loan applications.
- Navy Federal Credit Union offers loans without requiring down payment.
- The credit union does not require private mortgage insurance on many of its loans.
- The credit union allows members to loan money of up to 100% of their equity with a home equity loan.
- The credit union’s website is user-friendly, informative, and allows you to shop for rates online.
- Navy Federal offers a rate match guarantee and a flexible method to lock in low-interest rates.
- When you use a recommended real estate agent, you can get a cash-back bonus in many states.
- Navy Federal Credit Union loans are exclusive only to military members, veterans, qualifying civilian workers, and their families.
- The Navy Federal does not support the U.S. Department of Agriculture loans.
- It also does not offer FHA loans.
- It does not have a prequalification feature, which means you must be a member of the credit union and complete an actual loan application to determine if you qualify for a loan type, and what rate and terms you will be offered for such loans.
FINAL THOUGHTS ON NAVY FEDERAL CREDIT UNION MORTGAGE REVIEW
To put it simply, the Navy Federal Credit Union mortgage is an excellent choice for military members or their families who are looking for competitive rates, as well as high customer satisfaction, and more choices than other lending companies out there.
As mentioned, if you do not belong to a military family or not a member of the military though, you automatically disqualify to become a member of the credit union and enjoy its perks including competitive mortgage products.
There is honestly so much to like about the Navy Federal Credit Union mortgage products. It’s pretty much obvious as we have written so many benefits as compared to drawbacks.
If you are looking for a lending company to borrow money from, we highly recommend getting a mortgage debt from Navy Federal.