The Yahoo view: Navy Federal is an excellent mortgage lender to consider, especially if you are seeking interest rate protection on a VA-backed mortgage and are an active or former military member.
Navy Federal Credit Union is an impressive provider of VA-backed mortgages. Loaded with resources for the first-time home buyer (which many of its customers undoubtedly are) and providing top-notch tools, calculators, and loan products, NFCU is hard to beat when it comes to serving military-connected borrowers.
Just as important, Navy Federal really shines in customer service.
Key benefits
The No-Refi Rate Drop offer allows you to snag a lower interest rate six months or later after closing — for a $250 fee, but without additional closing costs or changing your loan terms.
A rate guarantee states that Navy Federal will match a better mortgage rate offered by a competing lender on the same loan or pay you $1,000 after you close with the other lender.
The Special Freedom Lock allows an interest rate reduction of up to 0.50% if rates move lower before your loan closing, which is just one feature that makes Navy Federal one of the best mortgage lenders for first-time buyers.
Military Choice loans allow benefits similar to VA mortgages to current and former service members without further entitlements.
Buy your home through a Navy Federal real estate agent partner and receive $400 to $9,000 cash back.
Need to know
Navy Federal Credit Union home loans are available to members only. Eligibility includes active duty or former members of the armed forces, Department of Defense, or National Guard, and family or household members or Department of Defense personnel.
Ranks near the top of all the lenders considered in the latest J.D. Power Mortgage Origination Satisfaction Study, which measures customer satisfaction with mortgage lenders.
Loan types offered
Navy Federal for first-time home buyers
A VA loan is one of the best mortgages for eligible first-time home buyers. With no down payment usually required, it is a valuable perk available to military members. Navy Federal guides first-timers through the home-buying journey with helpful guides, tips, informational articles, and checklists.
There is also an online resource that explains how VA loans differ from conventional loans and the requirements to qualify — it even debunks some VA loan myths along the way with some graphic “flip cards.” (Such as the credit score needed to be eligible for a VA loan: “The VA doesn’t set a minimum credit score for VA loan qualification.”)
The listicles, infographics, flashcards, guides, and just plain old articles provide a refreshing way to get up to speed on everything home loan-related.
Dip deeper: What you need to know about first-time home buyer programs
Navy Federal for home equity lending
Whether you’re looking to remodel, have a home improvement project in mind, or simply want to access some of the appreciation you’ve gained in your home’s value, Navy Federal has two options available:
A home equity loan, which lends you a lump sum at a fixed interest rate.
A home equity line of credit (HELOC), which allows you to borrow only what you need up to your credit limit. A HELOC typically has a variable interest rate.
Learn more: HELOC vs. home equity loan
On the day of our website visit, Navy Federal was promoting no closing costs and no application or origination fees on home equity loans. And HEL and HELOC credit amounts were available up to a very healthy $500,000. Of course, you’ll need the home equity to get that maximum loan amount, but Navy Federal allows you to access 100% of your equity in a HEL and 95% with a HELOC.
Navy Federal mortgage rates
Mortgage rates are easy to find on Navy Federal’s website. VA and conventional rates are shown on the mortgage home page. Click the “View All” button to see sample rates on others.
In the fine print, Navy Federal says the published rates are “as low as” a certain interest rate and have a built-in 1% mortgage origination fee. Then there’s this: “Many of these programs carry discount points, which may impact your rate.” That’s a little too vague for us, and we couldn’t find details in the disclaimers as to just how many discount points were included.
What all of this means: Take the “as low as” qualifier to mean “you’re probably going to pay a higher rate than this.”
Applying for a mortgage with Navy Federal
As with any credit union, you must be a member to apply for a mortgage with Navy Federal. To qualify, you or a member of your family or household must be a service member, a veteran of any branch of the armed forces, or a Department of Defense employee. You can apply for membership online or by calling or visiting an NFCU branch location.
Once you are signed up, click on the “Mortgage Preapproval” link and learn about the Navy Federal loan process. NFCU offers two levels of mortgage preapproval: a letter and a “verified” preapproval letter.
What’s the difference?
The preapproval letter is a nonbinding estimate of how much you are likely to be able to borrow. It’s a quick answer to the question, “How much house can I afford?”
The verified preapproval letter is the real home-buying deal. You’ll submit the necessary paperwork and go through a full loan underwriting review. If approved, you’re solid. You can make an offer on a house with complete confidence and lock in your interest rate for up to 60 days.
Navy Federal home-buyer tools and calculators
Nearly a dozen home-buying calculators are available on the NFCU website. They are intuitive, quick to load, and simple but complete. An adjustable-rate mortgage calculator is particularly useful and not something many lenders offer. You’ll also find other rarely seen calculators, including:
Other resources include helpful articles explaining escrow accounts, how to make mortgage payments when to refinance, and other topics.
A chat box lingers on the page until you close it. Just to test it out, I asked if NFCU offered conventional loans.
In a few seconds, what seemed to be a real-life, actual breathing person came on, gave her name and Nationwide Mortgage Licensing System number as a mortgage loan originator, and answered my question (“We do!!”). She was so friendly and used a lot of exclamation points during the chat that I practically wanted to take out a loan on the spot. Curious, I looked up her NMLS number, and it checked out.
If that wasn’t a real person, then AI has a solid future, for sure.
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