New US Financing Mortgage Review: Great for First-Time Home Buyers
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New American Funding was established as a family business in 2003 and has grown to become one of the largest private direct mortgage lenders in the U.S. Borrowers can apply for a mortgage online, by phone, or at nearly 200 offices. in 32 states.
This lender offers all the major mortgage programs as well as a single product where you can choose your own loan term. But the lender does not offer New York home loans, and Hawaii will not be able to apply to this lender. Here’s what to know before applying with New American Funding.
Pros and Cons of New US Funding
Offers all major mortgage programs and a single product where you can choose the length of your loan
Borrowers can get a quote, apply, upload documents and track the progress of their loan online
Borrowers can’t get a quote without applying for credit
Mortgages are not available in New York and Hawaii
Fees are not disclosed until you request pre-loan approval or submit a mortgage application
New US financing: types of loans and products
New American Mortgage offers all major mortgage programs and gives borrowers the choice of fixed rate and adjustable rate (ARM) mortgages. ARMs are available in 5/1, 7/1 and 10/1 terms. From start to finish, borrowers typically close a mortgage within 30 to 45 days.
Here is what is currently on the lender’s lineup:
New American Funding does not currently offer construction loans or home equity loans. But it does offer a unique loan product called the I CAN mortgage, which lets you choose a repayment term of between eight and 30 years on a primary residence. This provides more flexibility in selecting the ideal mortgage (and payment) for your situation. The I CAN mortgage has a minimum down payment of 5% and a credit score requirement of 620, depending on the type of loan.
New American also offers homeownership programs and can connect borrowers with national and local down payment assistance programs. It also aims to help underserved communities access home loans. In 2019, 19% of New American loan volume went to Hispanic borrowers, compared to a national average of around 8%, and clients can speak with bilingual English / Spanish loan officers as needed. The lender also launched an initiative in 2016 to increase homeownership in black communities.
New American funding: transparency
Although the New American Funding website states that applicants can request a quote without registering or submitting any documents, the process is not that straightforward.
To receive a quote, you will need to fill out a form with details about your financial situation and contact information, open an account, and authorize the lender to review your credit profile. We spoke with a representative of the company to clarify the details of the loan process. Prospective borrowers can’t get a quote without a strong credit application, which is an extra step most other lenders don’t need. This multi-step process can be confusing and deceptive, and the strong credit pull could temporarily hurt your credit.
New American financing: rates and fees
New American Funding announces daily refinance and purchase rates for 15-year conventional loans, 30-year conventional loans, 30-year VA loans and 30-year FHA loans. These rates can change daily and are based on a few assumptions, such as a credit score of 740 and a 40% down payment when purchasing a primary residence.
You can make sure you get the best deal on your home loan by submitting at least three mortgage applications to different lenders and request a loan estimate. Take the best offer and send it to another lender, asking them to beat the interest rate or the closing costs (or both). Getting a lower interest rate can save you hundreds or thousands of dollars over the life of the loan.
Advertised rates may include discount points, which are optional fees that you pay at closing in exchange for a lower interest rate. This can lower your costs in the long run as long as you stay home long enough to recoup the costs. If you want to avoid this expense, you will likely get a higher mortgage rate than advertised.
The minimum credit score required by New American Funding is 580, although it may be higher for certain types of loans, such as conventional mortgages.
We spoke with a New American Funding loan officer to get a feel for the lender’s fees and closing costs. There is no prepayment penalty on any of its loans, and you can lock in an interest rate for free for up to 60 days. Charges may apply if you need to extend the rate lockout.
According to the representative, New American’s closing costs may include a set-up fee of $ 1,629 plus third-party fees such as property fees and appraisal fees. For a full breakdown of closing costs, including lender fees and discount points, you will need to apply for pre-approval or submit a loan application.
Refinancing with new US funding
When you refinance a home loan with New American Funding, you have several options. A loan officer can help you determine what type of refinance is best for your situation:
- Rate and term refinancing, which allows you to get a new interest rate, a new loan term, or both.
- Cash-out refinancing, in which you take out a mortgage for more than what you currently owe and use the extra cash for all kinds of expenses.
- Refinance simplified by the FHA, which allows you to refinance an existing FHA mortgage.
- VA Interest Rate Reduction Refinance Loan (IRRRL), which is designed for VA loan borrowers who wish to lower their interest rate or switch from an adjustable rate to a fixed rate.
To receive a breakdown of the fees you might pay for a loan refinance, you will need to contact the lender. You can avoid the upfront expenses by incorporating closing costs into your new home loan, if you have enough equity.
New US financing compared to other mortgage lenders
|New American funding||Fairway Independent Mortgage Corp.||Guild Mortgage|
|Minimum credit score||580||620 for conventional loans; 660 for jumbo loans; 600 for FHA loans; 600 for VA loans||620 for conventional loans; 600 for FHA, VA, and USDA loans; 680 for jumbo loans|
|Minimum deposit||0% to 5%, depending on the mortgage program||0% to 5%, depending on the mortgage program||0% to 3.5% on most loans; 15% on jumbo loans|
|Where does the lender operate?||Washington, DC and all states except New York and Hawaii||All 50 states and Washington, DC||All 50 states and Washington, DC|
|Main types of loans||Conventional, Jumbo, VA, FHA, USDA, Home Improvement Loans, Adjustable Rate, Fixed Rate, Refinance, Cash Refinance, Reverse Mortgages, Home Equity Lines of Credit||Conventional, Jumbo, VA, FHA, USDA, Various Home Improvement Loans, Adjustable Rate, Fixed Rate, Refinance, Cash Refinance, Reverse Mortgages, Home Equity Loans, Home Equity Lines of Credit||Conventional, Jumbo, VA, FHA, USDA, Various Home Improvement Loans, Adjustable Rate, Fixed Rate, Refinance, Cash Refinance, Energy Efficient Mortgages, Manufactured Home Loans, Bridge Loans, Reverse Mortgages|
How to Shop for the Best Mortgage Rate
Finding the best deal is very important as it can save you hundreds or thousands of dollars over the life of the loan.
Let’s take an example: let’s say you’re looking to buy a home worth $ 200,000 with a 10% down payment and a 30-year term. You get quotes from two different lenders – and although they both offer the same closing costs, the interest rates are slightly different:
- With an interest rate of 3.5%, your monthly principal and interest payment is made to $ 808.
- A rate of 3.25% generates a monthly P&I payment of $ 783.
The lower rate saves you $ 25 per month – and while that may not seem like a lot, it’s $ 9,000 in savings over 30 years.
When shopping for a mortgage, submit applications to at least three lenders and ask for a mortgage estimate. This standardized form can help you compare interest rates and closing costs. An online mortgage calculator can help you calculate your monthly savings.
At the end of the line
New American Funding is a strong candidate for most borrowers – but with Spanish-speaking loan officers and homebuyer assistance programs, this lender excels at serving first-time homebuyers and the Latinx community. It has a full menu of mortgage options and a quick digital app, but borrowers can get help in minutes if needed. But as with any financial product, it’s always a good idea to shop around when looking to take out a mortgage.