Navy Federal Mortgage Review 2024
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Our Take
5.0
Navy Federal is known for VA lending, but it's the flexible VA-like loan options that truly stand out. While you don't have to be a current or former servicemember to take advantage of them, you will need a military connection to join the credit union. Most likely to appeal to VA borrowers.
Pros
- Offers unique no-down-payment and no mortgage insurance loan options for military and civilian borrowers.
- 24/7 customer service supports borrowers stationed overseas.
- Has both home equity loans and lines of credit.
Cons
- Borrowers must join the credit union before applying for a mortgage.
- Does not offer FHA, renovation or construction loans.
- We sometimes waited longer than 10 minutes before connecting with a customer service representative.
Lender | Min. credit score | Min. down payment | |
|---|---|---|---|
620 | 3% | Visit Lenderat NBKC at NBKC | |
580 | 3% | Visit Lenderat New American Funding at New American Funding | |
580 | 3.5% | Visit Lenderat Rocket Mortgage, LLC at Rocket Mortgage, LLC | |
620 | 3% | Visit Lenderat GO Mortgage at GO Mortgage | |
620 | 3% | Visit Lenderat Veterans United at Veterans United |
Full Review
Navy Federal is a credit union based in Vienna, Virginia. Loans are available nationwide to members with a connection to the armed forces, although requirements are fairly inclusive.
🏠 Popular loan types include: Fixed or adjustable rate; conventional loans; VA loans; cash-out or rate-and-term refinance
🔑 Specialty loan options include: Investment property; second home; IRRRL
💵 Home equity borrowing options: Home equity loan; HELOC
Navy Federal offers a variety of ways to reduce the costs of homebuying and refinancing. These include:
Navy Federal’s Military Choice loan offers a VA-style loan to veterans or servicemembers who have exhausted their VA loan benefit. Like a standard VA loan, this mortgage does not require a down payment or private mortgage insurance (PMI). Military Choice loans are also available as jumbo loans and for refinances.
Nonmilitary borrowers who qualify for credit union membership, including civilian employees of the Department of Defense, can take advantage of the Homebuyers Choice loan. According to the representative that we spoke with, the primary difference between this loan and the Military Choice loan is that this mortgage has a slightly higher rate. Otherwise, the Homebuyers Choice loan also requires no money down and no PMI, plus comes in jumbo and refinance versions.
For borrowers using those loan programs or who have fixed-rate jumbo loans, Navy Federal has a $250 rate drop. If Navy Federal's interest rate for your loan type falls at least 25 basis points below your current mortgage rate, you can request a rate drop so long as you have had your loan for at least six months and are current on your mortgage. And it's not a one-time program — you could theoretically use this as often as every six months, paying the $250 fee each time. Since it's not a refinance, it doesn't lengthen the loan's term.
» MORE: How to apply for a mortgage
How we score Navy Federal mortgages
Every year, NerdWallet writers and editors use the latest data and independent research to score lenders on an overall rubric, reflecting factors that are most important to mortgage borrowers. Select Why This Category Matters below to learn more.
Navy Federal Credit Union has a NerdWallet home loans rating of 5 stars overall. Here’s a breakdown of this year’s score.
Category | Star rating |
|---|---|
Average mortgage rates and fees | |
Mortgage rate transparency | |
Variety of loan types | |
Customer experience |
- Why This Category Matters
Average mortgage rates and fees (30%)
Our team analyzes federal data to compare mortgage lenders’ origination fees and offered mortgage rates, measuring annual averages across all loan types, as reported by the lenders. The lowest combination of average rates and fees earns the highest star rating in this category. (It’s worth noting that loans considered higher risk, including those such as FHA loans that are easier to qualify for, often have higher interest rates and fees.) Pro tip: In some cases, paying upfront fees may lower a borrower’s mortgage interest rate.
Mortgage rate transparency (25%)
We check how straightforward it is to comparison-shop rates online. NerdWallet’s transparency ratings are higher for lenders that post sample rates on their sites, and highest for sites with self-serve tools that allow shoppers to see what rates might be like for their particular loan. Pro tip: Borrowers who compare customized rate quotes by applying to three or more lenders could save thousands of dollars over the life of their loan.
Variety of loan types (25%)
Finding the right mortgage is different for each borrower. The highest star ratings in this category are awarded to lenders that our research shows offer a wide range of loan types, improving the odds that a borrower will find the best match for their needs: options for purchase and refinance; fixed-rate and adjustable-rate loans; government-backed FHA, VA or USDA loans; renovation or construction loans; and home equity loans or HELOCs.
Customer experience (20%)
How easy is it to interact with this lender? The highest-rated lenders in this category offer features that are convenient and clarifying for borrowers, such as: an online application, multiple customer service options, a helpful mobile app and candid closing timeline communications.
Navy Federal earned bonus points for offering loan options for first-time home buyers and borrowers with low credit scores.
What borrowers say about Navy Federal mortgages
NerdWallet’s lender star ratings assess objective qualities, including rates, fees and loan offerings. To help you understand borrowers’ subjective experiences, NerdWallet has gathered customer satisfaction ratings from J.D. Power and Zillow. We also contacted Navy Federal customer support.
→ Above-average score in J.D. Power’s 2023 U.S. Mortgage Origination Satisfaction Study. Mortgage origination covers the initial application through closing day.
Score: 753 out of 1,000. Industry average for origination is 730.
→ Above-average score in J.D. Power’s 2024 U.S. Mortgage Servicer Satisfaction Study. A mortgage servicer handles loan payments.
Score: 789 out of 1,000. Industry average for servicing is 606.
→ Below-average customer rating on Zillow.
Customer rating: 4.22 out of 5, as of the date of publication. Rating reflects fewer than 120 customer reviews, which is low for Zillow.
🤓 Our Nerds say...
Navy Federal offers plenty of customer service options, but they aren't always easily accessible. While there's 24/7 phone support, we experienced considerable wait times when contacting them. Navy Federal ostensibly has a chatbot that's supported by human staff during business hours, but we did not see it pop up on any mortgage-related pages. Branches offer the option to make an in-person appointment, but that makes more sense for a serious buyer than someone with a casual question.
Navy Federal and consumer trust
In December 2023, CNN published an analysis showing a wide gap between Navy Federal’s approvals of Black and white members who applied for conventional home loans. Many banks showed similar trends, but the racial gap in Navy Federal approvals was the largest among 50 leading mortgage lenders in 2022. The disparity was apparent for applicants with some comparable characteristics, such as income level.
"We take our responsibility to fair lending very seriously," the credit union said in a Dec. 18 statement. "The statistics in the article do not appear to have considered several key credit criteria that all financial institutions, including Navy Federal, rely on to assess mortgage applications."
A class-action lawsuit alleging Navy Federal unfairly denied the home loan applications of two Black plaintiffs was dismissed earlier this year, but members more recently have filed an amended complaint against the lender.
Navy Federal wasn’t penalized by a regulatory agency, so its NerdWallet star rating was not affected by these allegations. When shopping for a mortgage lender, do an online search to see if the company is in the news, and why.
Alternatives to a home loan from Navy Federal Credit Union
We recommend comparing mortgage rate offers from three or more lenders.
VA loan borrowers may be interested in a mortgage from Veterans United, while borrowers who want to explore other kinds of low- and no-down-payment mortgages may be a good fit for Flagstar.
» MORE: Best VA lenders
Phil Metzger contributed to this review.
More from NerdWallet
NerdWallet’s overall ratings for mortgage lenders are evaluated based on four major categories: average mortgage rates and origination fees, rate transparency to consumers, variety of loan types (purchase, refinance, fixed and adjustable, for example) and customer experience. Among the factors we consider in these categories are: options to apply for home loans online, typical time to close, mobile app experience, level of detail about mortgage rates on lender websites, and NerdWallet’s own analysis of the rates and fees lenders reported in the latest available Home Mortgage Disclosure Act data. These and other items inform detailed rubrics, which generate ratings from 1 star (poor) to 5 stars (excellent). Read more about how we rate mortgage lenders here.
