Navy Federal Credit Union VA Loan Review

Don’t let the “Navy” in Navy Federal Credit Union trip you up – it’s available to current service members and Veterans of all military branches.

The credit union exclusively serves current and former military members and is one of the largest providers of VA loans in the US. In FY 2023, they had more than 17,000 loans guaranteed by the Department of Veterans Affairs and were ranked as the #4 VA lender by both units and overall volume.

If you’re an active service member or eligible Veteran needing home financing, Navy Federal Credit Union should be one of your first choices.

About Navy Federal Credit Union

Navy Federal Credit Union is America’s largest credit union – by far! It welcomes over 13 million members and has well over $170 billion in assets (source).

The credit union is based in Vienna, Virginia, and goes all the way back to 1933 for members of the Navy only.

But as of 2008, it opened its doors to welcome members and Veterans of virtually all other US military branches.

To open an account, you must be either a Veteran, an active member of the military, or certain civilian employees of the U.S. Department of Defense.

You’re also eligible if you’re an immediate family member of any one of the above. It is not open to the general public.

Navy Federal Credit Union is a full-service credit union offering checking, savings, investments, IRAs, credit cards, auto loans, and student loans.

And, of course, they also make mortgage financing available to their members.

First and foremost are VA loans, but they also make all other mortgage programs available to their members.

Navy Federal Credit Union VA Loans

Navy Federal Credit Union offers a full range of banking and mortgage services.

But as an institution created by Veterans for Veterans, it naturally focuses more heavily on VA loans, at least where home financing is concerned.

The Benefits of VA Loans

VA loans offer current service members and eligible Veterans certain benefits unavailable to other borrowers and mortgage programs. These include:

• The ability to borrow up to 100% of the value of the property you’re buying or refinancing. That means no down payment is required on a home purchase.
• Sellers can pay up to 4% of the loan amount toward a member’s closing costs. And since closing costs are usually less than 4%, you won’t have to pay these either.
• Loans are generally fixed, so your monthly payment and interest rate remain the same throughout the loan term.
• Unlike both conventional and FHA mortgages, you are not required to pay monthly mortgage insurance. This can lower your monthly house payment by several hundred dollars.

As of 2020, if you have full entitlement, you don’t have a VA loan limit. However, servicemembers and Veterans with reduced VA loan entitlement must still follow VA loan limits, with the current standard limit being $766,550.

Keep in mind, VA loan limits are not a maximum on how much you can borrow, but help determine how much you can borrow without needing to factor in a down payment.

You can use a VA loan to purchase a home with as many as four units, but you must occupy at least one of them.

Navy Federal Credit Union VA Loan Programs

Given all the benefits provided by VA loans, they should be the first choice in home financing for service members and veterans.

Navy Federal Credit Union offers one of the widest varieties of VA loans of any lender in the country.

VA loans are available for purchase and refinance, and credit union personnel will help walk you through the entire process.

Some of the more specific loan programs available to veterans include the following:

Streamline Refinance

More specifically referred to as Interest Rate Reduction Refinance Loans, or IRRRL loans, they’re designed to make refinancing as simple as possible.

They’re available only to refinance an existing VA mortgage. They do not require a new Certificate of Eligibility, and most don’t require a new appraisal either.

IRRRLs are used to lower your interest rate or monthly payment, or to refinance from an ARM it to a fixed rate loan.

Military Choice

The Military Choice loan is a unique program created by Navy Federal Credit Union specifically for servicemembers, veterans, and reservists. It is not a VA loan, but it offers similar benefits with more relaxed guidelines. This program provides financing for members who have already exhausted their VA Loan benefit entitlement and allows for 100% financing up to $766,550, with options for jumbo loans exceeding this limit.

Loan Features:

• Fixed Rates & Consistent Payments: Your monthly payment for principal and interest will remain the same for the life of the loan.
• No Down Payment Required: Unlike many lenders who require up to a 20% down payment, this loan allows you to buy a home without waiting to save for a down payment.
• No Private Mortgage Insurance (PMI) Required: Borrowers are not required to purchase PMI, even without a 20% down payment, saving you money each month.
• No-Refi Rate Drop: With an easy no-refi rate drop option, you have rate-drop assurance. If rates drop after you purchase your home, you can lower your rate for a one-time $250 fee without refinancing.

100% Financing Home-Buyers Choice

This is a special program created by Navy Federal Credit Union for current service members and veterans.

It also offers 100% financing, with loan amounts up to $766,550, but jumbo financing is also available for up to $1 million.

The major limitation on this program is that refinance loans are limited to no more than 97% of the property’s value.

Navy Federal Credit Union VA Loan Rates

Below are the current interest rates and annual percentage rates (APRs) for current Navy Federal Credit Union VA loans.

Navy Federal Credit Union also has a very generous long-term rate lock policy.

Pricing for locks looks like this:

• 90 days: an additional ⅛ discount point ($250 on a $200,000 loan) OR an additional ⅛ percent (.125%) increase in the loan rate.
• 120 days: an additional ¼ discount point ($500 on a $200,000 loan) OR an additional ⅛ percent (.125%) increase in the loan rate.
• 180 days: an additional 1 discount point ($2,000 on a $200,000 loan) OR an additional ¼ percent (.250%) increase in the loan rate.

Any of the above extended lock options are available if your closing will be delayed for any reason, and you’re worried about interest rates rising.

A good example is new construction, where it may be several months between the contract signing and closing. You never have to lock in your rate, but it’s an excellent option to have.

Other Navy Federal Credit Union Mortgages Available

Navy Federal Credit Union exists work for service members, eligible veterans, and their families.

And while they specialize in VA loans, they also offer all other mortgage types as well. This can be a major advantage if you need a mortgage for a property type VA loans don’t cover.

Two examples are second homes and investment properties.

Other mortgage loans provided by Navy Federal Credit Union include:

Conventional Mortgages

These loans are available to those who are eligible, which includes veterans. The typical maximum loan amount is $766,550, and they’re available for both fixed rates and ARMs.

Qualifications for these loans are more strict than for VA loans, but they can be used to purchase investment properties and second homes.

Jumbo Loans

These are loans that exceed the conventional mortgage loan limit and can run up to $2 million.

Underwriting requirements for these loans are even tighter than they are for conventional mortgages. But if you need a very large mortgage, and you meet the qualifications, this is a possible alternative.

For both conventional and jumbo loans, Navy Federal Credit Union offers several variations, including loans with no private mortgage insurance and 100% financing.

Home Equity Loans and Lines (HELOCs)

Both represent secondary financing and are primarily used by current homeowners to borrow equity against their homes.

Programs are available that will enable you to borrow up to 100% of the property value, for terms ranging from five to 20 years.

Navy Federal Credit Union Features and Benefits

In addition to primary mortgage services, the credit union also offers the following mortgage related services:

Mortgage Pre-approval

If you’re not already a member of the credit union, you’ll have to get a Navy Federal Credit Union Access Number. The preapproval process will require the following information:

• Date of birth
• Social Security Number
• Two-year address and work history
• Gross monthly income
• Any other income used for qualifying (retirement, child support, investment, etc.)
• Savings and investment information (held outside the credit union)
• Current real estate owned information, including real estate loans, condo/homeowner’s dues, and homeowner’s insurance
• Information on the property being purchased
• The loan amount you are requesting

Upon submission of the above, your preapproval will generally be completed in one or two business days.

Navy Federal Credit Union Home Buying Center

This is a resource page offered by the credit union specifically for home financing.

It includes a series of articles that explain the financing process, and also calculators to help you calculate monthly payments and determine property affordability.

The Home Center will walk you through the financing process, including letting you know the documentation you need to get in advance, how to get pre-approved, searching for a home, and making an offer.

Customer Service

Available by phone, live chat, social media, and direct messaging. You can contact customer service on a 24/7 basis.

In-house Mortgage Loan Servicing

Unlike most mortgage lenders, Navy Federal Credit Union does not sell your loan to another servicer after closing.

You’ll continue making your payments to the credit union until the loan is paid.

MakingCents

Navy Federal Credit Union offers this program to help its members reach their financial goals.

You can select up to three goals, and you’ll be given a series of educational tracks that will help you reach every one of them.

It can be especially helpful to a first-time homebuyer, or a young member just beginning their financial lives.

Other Navy Federal Credit Union Services

Though the main topic of this review has been VA loans and other mortgage products, it’s also important to realize that Navy Federal Credit Union is a full-service credit union.

That means it also provides all the services typically found in a credit union, which are nearly identical to banking services. It means you can bank at the same institution that holds your mortgage.

Some of those services include:

Checking Accounts

As a credit union, checking accounts pay dividends. Navy Federal Credit Union offers five different checking accounts, including one that pay higher dividends with higher account balances.

You’ll have access to more than 1.7 million ATM machines through Navy Federal’s participating ATM networks.

Savings Accounts

You can open a dividend paying savings account with as little as $5.

Money Market Savings Accounts (MMSA)

Navy Federal Credit Union has dividend paying MMSAs that offer higher dividend rates paid on higher account balances.

They even offer these accounts for IRAs and education savings accounts.

Certificates

All credit unions offer certificates. But Navy Federal’s certificates pay the dividend rates comparable to interest rates being paid by online banks:

Credit Cards

Navy Federal Credit Union offers six different credit cards, with very low interest rates. One card charges in a high single digits, and the other five are in very low double digits.

These are better than rates you can get on credit cards issued by major banks.

Auto Loans

Navy Federal Credit Union has auto loans available for both new and used vehicles, with terms ranging from 36 months to 96 months.

Interest rates are competitive with the lowest rate auto loans available.

Navy Federal Credit Union Pros and Cons

Pros:

• Navy Federal Credit Union specializes in VA loan, but also gives you the option to use conventional or jumbo financing, should you choose to do so.
• As a full-service credit union, they provide all other banking services you’ll need, including a high number of high-interest deposit accounts, and consumer loan programs.
• Navy Federal Credit Union is available in all 50 states.
• The credit union has over 355 branches across the US if you prefer face-to-face contact.
• Customer service is available on a 24/7 basis.
• Navy Federal Credit Union services your loan for the entire term. It won’t be sold, forcing you to work with a new lender.
• Availability of home equity loans and lines, which could be important in either a home purchase or refinance.

Cons:

• You have to be a veteran, active servicemember, or certain civilian employees of the Department of Defense or the military, or a relative of any of these groups, to be eligible to participate.
• They charge a 1% origination fee on most loans, though those are often paid by the property seller.

Should You Get Your VA Loan Through Navy Federal Credit Union?

VA loans are highly specialized mortgages. You owe it to yourself to work with one of the most knowledgeable VA loan providers in the country.

It will make the entire process much smoother, and less stressful on you and your family.

And in addition to providing your home mortgage, Navy Federal Credit Union also offers all banking services that you will need.

This includes checking, high-interest deposit accounts, credit cards, auto loans, and student loan financing.

And since the credit union of services all its mortgages in-house, you’ll always be banking with the same institution that’s providing your home financing.

If you’d like more information, or if you’d like to apply for a VA loan, visit the Navy Federal Credit Union VA Loans webpage.

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