Navy Federal Mortgage Review 2024 - NerdWallet (2024)

Navy Federal Credit Union 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 December 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.” In the same statement, Navy Federal Credit Union announced the retention of a civil rights lawyer to assess its policies and practices.

A lawsuit has been filed alleging that Navy Federal Credit Union unfairly denied the home loan applications of two Black plaintiffs.

Navy Federal wasn’t penalized by a regulatory agency, so its NerdWallet star rating was not impacted by these allegations. When shopping for a mortgage lender, do an online search to see if the company is in the news, and why.

What borrowers say about Navy Federal Credit Union’s mortgages

NerdWallet’s lender star ratings assess objective qualities, including rates, fees and loan offerings. To assess borrowers’ subjective experiences with lenders, NerdWallet has gathered customer satisfaction ratings from J.D. Power and Zillow.

Navy Federal Credit Union’s mortgage loan options

Navy Federal Credit Union is the third largest lender for VA loan originations, according to the latest federal data. It is also on our roundup of the best VA loan lenders. However, Navy Federal differentiates itself from other military-focused lenders by offering additional mortgage options, including unique loan types and conventional mortgages.

For instance, borrowers who would typically apply for a VA loan, but who no longer qualify because they’ve exhausted their loan benefit, may be interested in Navy Federal’s proprietary Military Choice loan. 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.

On the day we checked, the sample rate for the Military Choice loan was 2.125 percentage points higher than the sample VA loan rate.

Navy Federal has another proprietary loan option for nonmilitary borrowers who still qualify for credit union membership (including civilian employees of the Department of Defense) called Homebuyers Choice. 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.

The lender also offers conventional mortgages (including jumbo loans) and adjustable-rate mortgages (ARMs), though it does not offer renovation or construction loans.

Navy Federal Credit Union HELOC and home equity loan

The lender also offers a home equity line of credit (HELOC) as well as a home equity loan. These second mortgages are a way for homeowners to access existing home equity without refinancing or selling their home. Funds obtained with a second mortgage can be used for expenses such as home improvements, education costs or debt consolidation.

Navy Federal Credit Union’s HELOC stands out for having a 20-year draw period, which is twice as long as a standard HELOC. This means that borrowers have the option to draw from their equity for 20 years before they have to start making payments on the principal balance.

Borrowers who choose Navy Federal Credit Union for a home equity loan will also have an especially wide range of terms to choose from, as they can get a five-year, 10-year, 15-year or 20-year loan.

What it’s like to apply for a Navy Federal Credit Union mortgage

You’ll need to become a member of the credit union before you can apply. This is not unusual among credit unions, though some do allow you to apply prior to joining, which allows borrowers to compare rate offers before committing to membership. Membership is available to Department of Defense employees, members of the armed forces, veterans and their families. A Membership menu on the homepage makes it easy to navigate to a page with eligibility details.

Borrowers can apply online, by phone or in person at any branch location that has a mortgage representative. The lender’s website has an interactive tool for finding a nearby branch, which lists its available services, including mortgage assistance.

Navy Federal Credit Union also has a mobile app, which has an average rating of 4.9 of 5 in the App Store at the time of writing. Borrowers can use the app to apply for membership, make payments and view statements, among other activities.

The lender offers 24/7 customer support, which can be particularly helpful for service members stationed around the world. Borrowers can also send secure messages or use the lender’s live chat feature to get more information. When we tried this feature, we were able to connect with a real person almost instantly. They were able to answer all of our questions. It’s worth noting, though, that the option to start a chat doesn’t appear on every page.

We did not have as strong of an experience when we called its customer support line. After the first agent answered the phone, we were put on hold for over 10 minutes before connecting with a representative who was able to answer our inquiries.

Navy Federal Credit Union mortgage rates and fees

NerdWallet analyzes federal data to compare mortgage lenders’ origination fees and offered mortgage rates. We measure annual averages across all loan types, as reported by the lenders. Navy Federal Credit Union has average origination fees relative to industry competitors, and better-than-average interest rates.

Borrowers should consider the balance between lender fees and mortgage rates. While it's not always the case, paying upfront fees can lower your mortgage interest rate. Some lenders will charge higher upfront fees to lower their advertised interest rate and make it more attractive. Some lenders just charge higher upfront fees.

Navy Federal Credit Union’s mortgage rate transparency

Navy Federal Credit Union provides sample rates for all of its mortgage products, but these are not customizable; they also don’t account for taxes or fees, so actual annual percentage rates (APRs) are likely to be higher than the ones that are advertised.

» MORE: Compare current mortgage interest rates

Alternatives to a home loan from Navy Federal Credit Union

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 Carrington Mortgage.

John Buzbee contributed to this review.

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