Should I use USAA for a mortgage?
July 30, 2014 8:18 PM   Subscribe

Is going with USAA significantly better or worse than using a local mortgage broker who sells our mortgage to another bank? Will USAA allow us to close on time, if the closing is 5 weeks out?

We use USAA for banking, but saw their mortgage area has negative reviews if we search for it online. We just figured that most people only bother to leave a review if they have a bad experience, but our realtor and another realtor have also mentioned specifically how hard USAA is to work with for closing. We love USAA's customer service generally, but also want the mortgage to happen smoothly and on time (very important). Our other option is via a local mortgage broker, who presumably sells the mortgage to another bank after he arranges it? He seems helpful and friendly, and says he can match USAA's rate, but we were worried about customer service if needed after the mortgage is made. Which option is better?
posted by treehorn+bunny to Work & Money (16 answers total) 1 user marked this as a favorite
Best answer: I had a fine experience with USAA for my mortgage. It all happened in a timely fashion, and I had no complaints. However, they did sell the mortgage, to GMAC then OCWEN, so it's not like I benefit now from the awesome USAA customer service with regards to my mortgage.
posted by tingting at 8:30 PM on July 30, 2014 [2 favorites]

Best answer: I've done (as an attorney) several closings with USAA mortgages without a single hitch (I did mortgage work for about five years, but I don't anymore, not one of the mortgagers I ever had trouble with was USAA); as well as personally known many people with USAA mortgages who had no issues at closing. I'm surprised to hear you say this, as it is not an assessment of USAA mortgage I've ever heard, either professionally or socially. USAA does contract out the servicing of many of its mortgages and sells a portion of them, as well, which many people dislike, but is still fairly standard for the industry for all but credit unions.
posted by crush-onastick at 8:34 PM on July 30, 2014

Best answer: My sister in law had a terrible experience with USAA mortgage. She was trying to buy a house which was a "short sale" and eventually gave up because USAA was almost completely unresponsive. And finally sent a requirement for another inspection of some really trivial things in the afternoon the day before closing. She lost a fair amount of money.

I am a 30 year USAA member and fan so this makes me sad.
posted by SLC Mom at 10:26 PM on July 30, 2014 [1 favorite]

Best answer: My family and I have been loyal to USAA for years and years. I didn't want to believe the bad reviews because I have experienced extraordinary customer service across the board in every other department. I'm sorry to say that I am in the middle of a mortgage process right now, and I have a long complaint letter already drafted. I've added to it every day this week. It's been disorganized, there's been poor communication, and they have been the most difficult part of the process from start to finish.

I absolutely hate to say it, but avoid, avoid, avoid.
posted by juliplease at 10:48 PM on July 30, 2014 [2 favorites]

I went to USAA at first when looking at a house I didn't buy, but switched to Navy Federal on the advice of my sister who also mentioned that USAA resells their mortgages.
My experience wasn't bad, although it left the distinct impression that their service is heavily geared toward getting young officers into their first homes.
Navy Federal, however, was very good. Noticeably better, in my opinion.
posted by atchafalaya at 2:28 AM on July 31, 2014 [1 favorite]

I went with USAA for my mortgage because I loved their customer service (and they were able to offer me the lowest rate), but I did have issues with the woman who was assigned to me. It's been a few years now, so I can't remember the exact issues, but unresponsiveness to e-mails and phone calls (big pet peeve for me) was definitely one of the problems. At the closing, I remember I had the opportunity to leave comments for USAA and I filled out the whole page with my list of why I disliked their customer service for the mortgage.

I was also surprised to find out that pretty much immediately, they sold the mortgage to a third party so even though the mortgage is listed as one of my accounts when I log in to my USAA account, anything else is handled by some other company.

To be honest, with it being my first and only mortgage so far, I just assumed that's the name of the game and would guess that all banks were like that, so my advice would be to just go with whoever can get you the lowest rate.
posted by lea724 at 3:50 AM on July 31, 2014

We used USAA's whole real estate shebang when we bought our NY house in 07, and it went fine. Called in the middle of searching to get our preapproval bumped up in five minutes, so our perception of customer service was pretty good. Really the only weird part was that we only signed formal paper applications for the mortgage at the closing.

I wonder if there's a correlation between customer service and state where the house is?

If you're still considering USAA, it might be worth glancing at the content of the complaints to see how many are military families PCSing and USAA not immediately granting a short sale even though military families deserve it because freedom. ISTR a lot of that 06-08.
posted by ROU_Xenophobe at 4:11 AM on July 31, 2014 [1 favorite]

Make the decision from a financial viewpoint. You want the mortgage that has the lowest rate and closing costs. Assume your mortgage will be sold, because it will be.

If you've started the process with one entity, and you like the rates you've been quoted, just hang in there with that person. (Unless he/she is horrible)
posted by Ruthless Bunny at 4:36 AM on July 31, 2014 [2 favorites]

Best answer: Run away from USAA Mortgage. They're fine for other things.

The only business experience I've ever had that was more excruciating than Comcast was dealing with USAA Mortgage. The sheer levels of incompetence on display bordered on negligence. I am not "that" customer and yet I ended up having to get an attorney on one line and them on the other with a not-idle threat to proceed with a lawsuit because they couldn't manage simple tasks.

I very nearly lost the house I was trying to buy because of them.

And USAA will sell your mortgage to another company within 30-60 days of your close. Every mortgage I've ever had, with any lender, was the same way.
posted by Thistledown at 6:36 AM on July 31, 2014 [2 favorites]

Best answer: My first mortgage was with USAA and it was all good. They didn't sell the mortgage and everything was fine and dandy, including paying the mortgage off early when we sold the house.

For my second house we had to move things along quickly (it was a short sale), and USAA said they couldn't close in time -- I appreciate their honesty -- so we went with a local bank that could move faster. My mortgage was sold and then the bank was sold, but I haven't had to change anything about how I pay my mortgage.

I'd say stick with USAA if you can, but it's not the end of the world if you can't.
posted by The corpse in the library at 8:36 AM on July 31, 2014

As long as your mortgage company:

* Allows you to close on time
* Pays your escrow items (property taxes, homeowner's insurance, PMI) on time and in the correct amounts

...then you don't care who your mortgage company is. Really. Even if it's sold to another lender.

If you have enough of a down payment (> 20%) that you can apply to have a waiver of escrows and you then pay your property taxes and homeowner's insurance premiums yourself, outside the mortgage, then all you need is someone to loan you money.

Closing delays aren't that much of a problem either. For my first house, I was scheduled to close on a Friday, but the money hadn't shown up in my lawyer's account on time; we did all the paperwork, but the seller wasn't comfortable giving me the keys until Monday when the money showed up. But, I scheduled my apartment key return for the 31st of the month whereas the closing was the 25th of the month, so it's not like I had no place to live that weekend. With proper advanced planning you can work around closing delays.

As Ruthless Bunny said, make the decision from a purely financial viewpoint. Who will offer you the lowest rate? Who will offer you the lowest fees and closing costs? If that's USAA, go with them.

By all means, research the companies and see if there are any complaints about paying property taxes or insurance correctly and on time. That's really the only thing that matters.

Use to find at least three mortgage lenders in your area; play them off of each other.
posted by tckma at 9:29 AM on July 31, 2014 [1 favorite]

Best answer: We found our Realtor through USAA - they hooked us up with him, and he showed up to our first meeting with a booklet of USAA stuff, including their mortgage literature. "I've heard that is basically their worst service line," I said as he flipped to that section of his big binder of info. "Oh good, you know about that," he said, flipping right on to the next page. "I've always gotta bring the info to a USAA referral, but yeah, let's not talk about it."
posted by deludingmyself at 9:31 AM on July 31, 2014 [2 favorites]

Long time USAA fan (I'm not military but my dad was, so I'm grandfathered in), and I had no issues dealing with them for my mortgage. As others have said, though, they immediately turned around and sold it off, so if that's your main concern and you can find the same or better rate locally, just go local.
posted by Roommate at 9:42 AM on July 31, 2014

Best answer: I've been a USAA member for ages and have all my banking and insurance through them, but I can't recommend the mortgages. I wanted to go with them when I bought my first house in 2009, but they were slow, unresponsive, and scheduled the appraisal so late in the game that when it came back too low because of bad comps, it was a mad scramble for another lender. Luckily my realtor knew a local broker who got it done in time.

I refinanced with USAA in 2012 and that was fine, but it was again a long slow process. They had the best rate, and since it was a refi I wasn't in a hurry, so no regrets. But my husband and I are closing on another house in two weeks, and I'm really glad we chose a local lender even though we might have been able to shave an eight of a point by going with USAA. It just wasn't worth the worry.
posted by slenderloris at 12:21 PM on July 31, 2014 [1 favorite]

Best answer: I'm a lifelong USAA member and huge fan, do all of my banking and insurance with them, and assumed I'd use them for a mortgage. I had two initial phone conversations about what I was looking for and couldn't believe how incompetent and incoherent and hard-sell-y the people were -- I mean USAA people on the phone are just never like that. So I started looking around and read about how USAA farms out their mortgage business and it's not handled in the same offices.

We went with the credit union.
posted by gerstle at 1:32 PM on July 31, 2014

Response by poster: Thanks to everyone, both marked and unmarked answers, it was all very helpful!
posted by treehorn+bunny at 6:29 PM on July 31, 2014

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