Navy Federal Credit Union Mortgage Review 2023

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Navy Federal Credit Union offers VA home loans, adjustable-rate mortgages and conventional fixed-rate mortgages – all with no private mortgage insurance required. One of its specialized products is the Military Choice Loan, which is available to eligible service members and veterans. This mortgage requires no down payment or PMI, and has special fixed rates.

The Homebuyers Choice Loan, which doesn’t require a down payment or private mortgage insurance, is designed to help first-time homebuyers.

Navy Federal also offers jumbo loans. Home equity loans and home equity lines of credit have been temporarily suspended.

Terms, fees and discounts on Navy Federal Credit Union mortgages depend on the product. Navy Federal does not charge application fees. Other fees are listed on your loan estimate and can include origination fees or funding fees. For example, Military Choice Loans include a funding fee of 1.75% of the loan amount that can be financed into the loan or waived for a 0.375 interest rate increase. This loan also has an origination fee of 1%, which can be waived for a 0.25 interest rate increase.

If you want to reduce your interest rate, you can buy discount points, with one point equal to 1% of the total loan amount.

To become a member of Navy Federal Credit Union and qualify for its mortgage loans, you must be an active member or veteran of any branch of the military, a Department of Defense civilian employee, a contractor working at a DOD installation, or a family member of someone who qualifies.

Navy Federal Credit Union does not disclose a debt-to-income maximum or minimum credit score, but it says it works with borrowers whose credit it “less than perfect.”

The credit union offers a range of mortgages with various qualification requirements, including conventional loans that typically require a minimum credit score of 620 based on Fannie Mae and Freddie Mac requirements. Navy Federal works with members who have credit scores that might not be accepted by traditional lending institutions.

Navy Federal Credit Union has an A+ rating from the Better Business Bureau, but the lender is not BBB-accredited. The credit union closed 345 complaints during the last 12 months, many of which were related to product problems, billing or collections. Navy Federal Credit Union addressed these complaints in a timely manner.

In 2021, the Consumer Financial Protection Bureau received 219 mortgage-related complaints about Navy Federal Credit Union, mostly related to the application process. Navy Federal provided timely responses to these complaints; 116 closed with explanation, 19 closed with monetary relief, 18 closed with nonmonetary relief and 21 were still in progress as of January 2022.

As for customer service, one factor to note: Navy Federal’s materials and documents are only available in English. The credit union also only conducts business in English, though it will “attempt to assist members who have limited English proficiency where possible.”

Borrowers can apply for a mortgage online and manage their accounts through the credit union’s website. First, Navy Federal requires you to get preapproved based on your credit score, income, assets, debts, employment history and other financial information like bank statements and pay stubs. Navy Federal will verify this information and preapprove you for a certain loan amount. When you’re ready to buy a home, you can move on to the application process by contacting your home loan advisor.

You’ll need to supply: W-2s for the last two years, pay stubs for the last few months, personal tax returns for the last two years, your Social Security number, monthly debt and living expenses, and bank statements and asset information from financial institutions other than Navy Federal.

  • Active-duty military, veterans, DOD civilians or contractors, and their family members
  • Member borrowers who want a mortgage with no PMI or down payment
  • Those who are looking for a lender with VA loan expertise

Q: What is Freedom Lock?
A: Freedom Lock is a benefit Navy Federal offers to help you get the lowest interest rate on your mortgage. Once you complete your application and you’ve found the home you wish to buy, you’ll need to choose your rate lock option, which determines what happens with your mortgage rate. If you “lock” your rate, you stick with the current rate – this is a good option if you think rates will go higher before you close on your home. If you think rates will go lower, you can opt to “float,” and then lock in your rate at a lower level right before you close.

The third option is typically called a “lock float down” – you can lock in your rate but keep the option to change it if mortgage rates fall during your lock period. Mortgage lenders typically charge for this option, but Navy Federal offers it for free. Hence, Freedom Lock. With Freedom Lock, you can relock your mortgage rate twice, as long as your mortgage closes within 60 days of the first rate lock.

Q: Is Navy Federal Credit Union legit?
A: Navy Federal Credit Union is the largest credit union in the United States. Navy Federal was founded in 1933 to provide financial solutions to those who serve the United States and their families. The Better Business Bureau gives Navy Federal an A+ rating, though it is not accredited. The 2020 J.D. Power & Associates U.S. Primary Mortgage Origination Satisfaction Study ranked Navy Federal Credit Union as above-average. In 2020, the Consumer Financial Protection Bureau received 229 mortgage-related complaints about Navy Federal Credit Union.

Q: How do you get approved for a Navy Federal Credit Union mortgage?
A: To get approved for a Navy Federal Credit Union mortgage, you must be a member. First, secure loan preapproval. You’ll need to provide basic financial information, including your credit score and employment history. While some types of mortgages have minimum credit score requirements, Navy Federal says it works with members to find the best mortgage option for each situation, even for those who have less-than-perfect credit. Your preapproval letter states how much money you’re approved to borrow to purchase a home. Once you find a home in your price range that you want to buy, you’ll contact your loan advisor, provide additional financial details, and convert your preapproval into a formal loan application.

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