Navy Federal Credit Union Mortgage Review 2023

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Navy Federal Credit Union is a federally-registered, full-service credit union comprising members of the military, Department of Defense, their families and veterans. Founded in 1933 by seven Navy Department employees who wanted to make it easier to reach their financial goals, Navy Federal Credit Union has since grown to include 12 million members. 

Headquartered in Vienna, Virginia, Navy Federal Credit Union offers fixed-rate and adjustable-rate mortgages, as well as Veterans Affairs loans and other mortgage products designed for members of the armed forces and military veterans.

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Regions Served by Navy Federal Credit Union

Does Navy Federal Credit Union Operate in My Area?

Based in Northern Virginia, Navy Federal Credit Union operates 350 branch locations worldwide, including branches in Bahrain, Cuba, Greece, Guam, Korea, Italy, Japan, Singapore and Spain. Unlike state-registered mortgage lenders, Navy Federal Credit Union is federally-insured by the National Credit Union Association and is not limited to originating loans only in particular states. 

What Kind of Mortgages Can I Get With Navy Federal Credit Union?

Fixed-rate mortgages: Loan customers who prioritize reliable, consistent monthly payments gravitate toward fixed-rate conventional mortgages. Fixed-rate mortgages come with an interest rate that remains static for the duration of the loan. Navy Federal Credit Union offers these loans in 10- to 30-year terms with down payments as low as 5%. 

Adjustable-rate mortgages: Unlike a fixed-rate mortgage, an adjustable-rate mortgage or ARM has an interest rate that periodically changes. An ARM’s interest rate remains fixed for an initial period of time before it undergoes regular adjustments that will impact the size of a customer’s monthly mortgage payments. Navy Federal Credit Union offers 5/5 ARMs that start with a fixed interest rate for the first five years of the loan before the rate is adjusted every five years. As a result, ARMs are best suited for buyers who don’t plan to stay in their home for more than five years. ARMs come in 10- to 30-year terms. 

VA loans: As a credit union that caters to the needs of service members, veterans and their families, Navy Federal Credit Union offers VA loans that allow eligible loan customers to purchase a home without putting any money down or paying private mortgage insurance. However, a certificate of eligibility is required for this type of loan, which can be obtained through the Department of Veterans Affairs. A funding fee of up to 3.6% of the loan amount also must be paid, but this fee can be rolled into your monthly payment. VA loans come in 10- to 30-year terms.

Military Choice loans: Navy Federal’s Military Choice mortgage program provides all of the benefits of VA loans to those who have exhausted their VA loan benefit. Military Choice loans do not require a down payment or private mortgage insurance. The seller is also permitted to contribute up to 6% of the value of the home toward closing costs, saving the buyer money. Military Choice loans come in 16- to 30-year terms.  

Homebuyers Choice loans: Akin to a Federal Housing Administration loan, the Homebuyers Choice loan aims to help first-time buyers purchase a home. Like other loan offerings from Navy Federal, the Homebuyers Choice program does not require a down payment. Homebuyers Choice loans are offered in 10- to 30-year terms. Like the Military Choice program, Homebuyers Choice loans allow the seller to contribute up to 6% of the home value toward closing costs.

Jumbo loans: Navy Federal Credit Union also offers jumbo loans for home purchases that exceed federal lending limits. In most states in 2023, loans that exceed $726,200 require jumbo mortgages. In Alaska, Hawaii and specific “high-cost areas,” any loan over $1,089,300 is considered a jumbo loan.

Refinance loans: Navy Federal Credit Union has refinance options for homeowners hoping to convert home equity into cash or lower their interest rate and monthly payments.

What Can You Do Online With Navy Federal Credit Union?

Using Navy Federal’s HomeSquad platform, loan customers can get pre-approved for a mortgage online, and in some cases, be preapproved on the spot. HomeSquad also allows loan applicants to track their loan status 24/7 online or on a mobile device, as well as upload tax returns, pay stubs and other key documents.  

Prospective homebuyers can also search for a real estate agent on the Navy Federal Credit Union website using the RealtyPlus tool, an exclusive feature for members of the credit union. After signing up for RealtyPlus and selecting an agent, a RealtyPlus coordinator will work with you through every step of the way. 

The Navy Federal Credit Union website also includes a number of free calculators, including a mortgage qualification calculator to help you determine just how much house you can afford.  

Would You Qualify for a Mortgage From Navy Federal Credit Union?

The minimum credit score needed for a conventional mortgage typically is 620. On its website, Navy Federal Credit Union says “we consider your banking history with us as well as your credit score, enabling us to provide more loans to more borrowers.”  

Navy Federal Credit Union also examines your debt-to-income (DTI) ratio when determining the status of your application. DTI is calculated by dividing your monthly debt payments divided by your gross monthly income. Navy Federal Credit Union typically requires a DTI of no more than 43%. 

Navy Federal Credit Union will also look at your employment history when you apply for a mortgage. Two or more years indicate that you have a stable income and can pay off debt.  

What’s the Process for Getting a Mortgage With Navy Federal Credit Union?

After identifying the type of home you hope to purchase and establishing a budget, the first step in the mortgage process is getting pre-approved. Unlike pre-qualification, which only provides a ballpark estimate for how much a lender may approve for a buyer, pre-approval is a more in-depth process that results in a specific mortgage amount for a buyer. Lenders say a pre-approval letter can help your offer stick out with sellers, as it serves as verification of your borrowing capacity. Applying for pre-approval can be done online, over the phone or in person with a Navy Federal Credit Union representative. 

With your pre-approval letter in hand, you can begin your home search and make an offer on property when you find one. After negotiating and agreeing to a deal with the seller, you’ll need to officially apply for a mortgage with Navy Federal Credit Union. In addition to submitting personal information, including your Social Security Number, you’ll likely need to provide the lender with proof of income. This includes W-2 statements and federal income tax returns from the past two years, as well as pay stubs from the most recent 30 days showing current and year-to-date income. You may also need to submit the sales contract signed by all parties, proof of assets, including bank statements, documentation pertaining to your long-term debts, among other documents. 

If your loan application is approved, you can move on to closing on your loan. This involves paying closing costs, which are provided to a settlement agent who distributes them among the parties. When closing, you’ll sign the requisite documents and officially take ownership of your new home. 

How Navy Federal Credit Union Stacks Up

As the largest credit union in the U.S., Navy Federal Credit Union has built a decades-long legacy of serving active members of the military, their families, veterans and employees of the Department of Defense. Navy Federal Credit Union offers a variety of loan types that enable buyers to purchase their new homes without a down payment or private mortgage insurance. The latter sets Navy Federal Credit Union apart from other traditional mortgage lenders. However, members of the general public are not eligible for home loans from Navy Federal, only those who belong to the credit union can get a mortgage through it. 

According to the Navy Federal Credit Union website, it typically takes 30 days to close on your mortgage once you’ve submitted your completed application. But closing times can vary and delays caused by COVID-19 have resulted in home purchase mortgages averaging 35 days to close. Those planning to refinance their home should anticipate the process taking between 60 and 75 days, according to the credit union.

Tips for Prospective Homebuyers

• In addition to a real estate agent, a financial advisor can be a valuable resource to tap during the homebuying process. An advisor can help you save for a down payment and set your budget. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• Speaking of your budget, SmartAsset’s mortgage calculator can help you estimate how much house you can afford and how much your monthly mortgage payments may be. See how a larger down payment or lower interest rate can impact the size of your monthly payments.
• When searching for a mortgage, it’s important to shop around for the best rate and terms. Use our mortgage comparison tool to see how different lenders stack up against each other.