Navy Federal Credit Union Mortgage Review 2023

How Bankrate scored Navy Federal Credit Union

To determine Navy Federal Credit Union’s Bankrate Score, Bankrate’s editorial team rated it and other lenders on a scale of one to five stars based on a variety of factors relating to the lender’s products and services. (Bankrate’s partners compensate us, but our opinions are our own, and partner relationships do not influence our reviews.). We derived its overall score by considering three basic factors.

• Affordability: Navy Federal Credit Union is a nonprofit, which means you could have access to more competitive rates. Like many lenders, however, you’ll be responsible for paying an origination fee on your loan.
• Availability: This large lender operates nationally and specializes in loans for military members and their families.
• Borrower experience: Navy Federal has a 24/7 stateside contact center, providing round-the-clock member service. J.D. Power gives the lender high marks for customer satisfaction.

• Methodology

  Bankrate's expert editorial team collects lender information through a variety of methods. We contact lenders directly, and we also turn to regulatory filings and to assessments by third parties. Our research takes into account three main factors – affordability, availability and borrower experience.

  Bankrate's reporters and editors have decades of experience covering the mortgage industry. They're skilled at gathering information through interviews and by scouring regulatory filings. Bankrate evaluates more than 85 lenders for factors relating to affordability, availability and customer experience, assigning each a Bankrate Score out of five stars. Here's how we assess each of the categories:

  • Affordability. Loan cost is a deciding factor for many borrowers. We look at two metrics: 1) a lender's lowest advertised annual percentage rate (APR) based on Bankrate's sample scenario, which assumes a 740 or higher credit score and a 20 percent down payment, among other factors and 2) established-customer discounts or incentive pricing, when applicable.
  • Availability. Another factor is how quickly your loan application will be approved, and how many loan programs the lender offers. So we evaluate approval and closing timelines and diversity of loan products.
  • Customer experience. Finally, we delve into what it's like to deal with the lender as a consumer. We look at the lender's application process and availability of customer service support. We also consider the results of J.D. Power's 2022 Mortgage Origination Satisfaction Survey.

  Bankrate's editorial team confirms the accuracy of data at the time of publication. Our team is dedicated to maintaining the timeliness of information – the mortgage industry is changing constantly, so we regularly revisit these reviews to update them.

  Bankrate's methodology page spells out our rating process in greater detail.

Affordability: 5/5

Loan cost is a deciding factor for many borrowers.  The affordability nature of loans differ from lender to lender, so comparing costs is key. Overall, Navy Federal Credit Union’s mortgage rates are competitive. It charges a 1 percent origination fee but offers the option to waive the fee in exchange for a higher interest rate. The credit union doesn’t charge processing or underwriting fees, however, and there’s no cost to relock your rate on purchases or refinances. (As part of its Freedom Lock feature, you can relock your rate up to two times if rates improve.) Note: For most VA loans, you’ll be responsible for paying the VA funding fee. The credit union’s VA loan option allows the seller to contribute to closing costs, up to 4 percent of the value of the home.

Availability: 5/5

Availability factors can make the overall mortgage-application process smoother or more challenging. Navy Federal Credit Union serves 12.1 million members and operates 355 branches worldwide, providing conventional loans as well as VA loans, Military Choice loans and Homebuyers Choice loans, along with options to refinance your existing mortgage. The credit union also offers investor loans.

Borrower experience: 5/5

Navy Federal Credit Union has been in business for 90 years. While it hasn’t been rated by the Better Business Bureau, it carries a rating of 4.7, or “Excellent,” from Trustpilot. J.D. Power breaks out Navy Federal into a separate category along with USAA and Veterans United. While Navy Federal ranks behind those two VA specialists, its score was higher than that of Rocket Mortgage or any other traditional lender.

Navy Federal Credit Union allows you to get prequalified and preapproved and to apply for a mortgage online. You can communicate with the lender through secure messaging online, via chat or through social media. You also can sign certain loan documents using e-sign, and pay your mortgage through the credit union’s app. Navy Federal’s HomeSquad platform lets you connect accounts to verify assets and track your loan status. If you have questions about a loan, Navy Federal has a 24/7 stateside contact center, providing round-the-clock member service.

How to apply for a mortgage with Navy Federal Credit Union

You can apply for a purchase loan or a refinance on Navy Federal’s website. The company’s process is similar to other online lenders.

In some cases, borrowers can get preapproved instantly through Navy Federal’s home loan management platform, HomeSquad. Generally, though, you can expect a response from a loan officer within six to 10 days after applying. For a purchase, closings typically take 30 days. Refinance closings can take 30 to 45 days.

Here are some tips for streamlining the application process:

Check your credit report. It’s important to check your credit report before your lender does, in case there are errors that could impact not only whether you get preapproved but also your ability to get the best mortgage rate. Knowing your credit score also helps you decide what type of loan to apply for. If your score is in the very low 600s, for instance, an FHA mortgage might be best for you, as its standards are more lenient than those for conventional loans.

Gather personal and financial documents. With any lender, you must supply documentation proving your income, assets and debts. These documents typically include:

• Pay stubs from at least the past 30 days
• W-2s from the past two years
• Proof of any other income sources (such as bonuses or commissions, child support or rental revenue)
• Account statements, including checking, CDs and retirement savings, from at least the past two months
• Documents detailing any loans you currently have
• Letters explaining any new loans you’ve taken out recently
• Letters from anyone giving you a gift to use for a down payment
• Court records if you’re recently divorced or dealt with something like bankruptcy or foreclosure
• Contact info for your landlords if the lender wants to verify payment
• ID (such as a driver’s license or passport), so lenders can verify your identity and that you’re a U.S. citizen. Foreign nationals can get financing, but it’s much more complicated.

Those who are self-employed might also need to include additional information and undergo an income audit. This might include asking an accountant to verify your income is stable by speaking with customers; reviewing business records, like P&L statements; or taking other steps.

Provide details about the property. If it’s a purchase mortgage, you’ll need to supply the address of the home you’re buying and submit to an appraisal. If you’re refinancing, you may or may not need an appraisal.

Refinancing with Navy Federal Credit Union

Navy Federal Credit Union tends to offer competitive refinance rates, and its refinancing options include the VA Interest Rate Reduction Refinance Loan (IRRRL, or streamline refinance). You can apply for a refinance online using your membership login.

Frequently asked questions about Navy Federal Credit Union

What is Navy Federal's rate-match guarantee?

Navy Federal offers a rate match guarantee: If you find a better rate at another lender, the lender will match it – or give you $1,000 after you close with the competing lender. To qualify for Navy Federal’s rate match guarantee, you’ll need to lock in your rate with the rival lender before you submit your rate match request. A loan estimate and the rate lock disclosure from the competing lender must be received within three calendar days of locking with Navy Federal. In addition, Navy Federal allows borrowers to relock their rate for free if rates fall before closing.