August 5, 2021

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New American Funding Mortgage Review: Great for First-Time Homebuyers

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New American Funding was founded as a family business in 2003 and has grown to become one of the largest private direct mortgage lenders in the United States. Borrowers can apply for a mortgage loan online, by phone, or at nearly 200 offices in 32 states.

This lender offers all the major mortgage programs as well as a unique product that allows you to choose your own repayment term. But the lender doesn’t offer home loans in New York and Hawaii cannot apply to that lender. Here are some things to know before you apply to New American Funding.

Advantages and Disadvantages of New American Funding

advantages

  • Offers all major mortgage programs and a unique product that lets you choose your loan term

  • Borrowers can get an interest rate quote online, submit an application, upload documents and track the progress of their loan

disadvantage

  • Borrowers cannot receive an interest rate offer without taking out a loan

  • Mortgages are not available in New York and Hawaii

  • Fees are not disclosed until you apply for pre-approval for a loan or apply for a mortgage

New American Funding: Loan Types and Products

New American Mortgage offers all of the major mortgage programs, offering borrowers a choice between fixed rate and loan Variable rate mortgage (ARM) loan. ARMs are available in expressions 5/1, 7/1, and 10/1. From start to finish, borrowers typically complete a mortgage within 30 to 45 days.

Here’s what’s on the lender’s list right now:

New American Funding does not currently offer construction loans or home equity loans. However, it does offer a unique loan product called I CAN Mortgage that allows you to choose a repayment period between eight and 30 years for a primary residence. This allows more flexibility in choosing 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 loan type.

New American also offers first-time buyer programs and can connect borrowers with state and local down payment support programs. It also focuses on giving underserved communities access to home loans. In 2019, 19% of New American’s loan volume went to Hispanic borrowers, compared to the national average of about 8%, and customers can speak to bilingual loan officers in English / Spanish if needed. The lender also launched an initiative to increase home ownership in black communities in 2016.

New American Funding: Transparency

While the New American Funding website states that applicants can request a quote without registering or submitting documents, the process is not that straightforward.

To get a quote, you need to fill out a form with details of your financial situation and contact information, set up an account and allow the lender to review your credit profile. We spoke to a company representative to clarify the details of the loan process. Potential borrowers cannot receive an interest rate offer without a hard borrowing. This is an additional step that most other lenders do not require. This multi-step process can be confusing and misleading, and the hard loan withdrawal can temporarily affect your credit.

New American Funding: Prices and Fees

New American Funding offers daily refinance and purchase rates on conventional 15 year loans, conventional 30 year loans, 30 year VA loans, and 30 year FHA loans. These rates can change daily and are based on some assumptions, e.g. B. A credit score of 740 and a 40% down payment when purchasing a primary residence.

Pro tip

You can ensure that you are getting the best deal on your home loan by submitting at least three mortgage applications to different lenders and ask for a credit estimate. Take the best offer and send it to another lender. Ask him to beat the interest rate or the closing cost (or both). Getting a lower interest rate can save you hundreds or thousands of dollars over the life of the loan.

The prices quoted may include Discount pointsThis is an optional fee that you pay when you sign up for a lower interest rate. This can lower your long-term costs as long as you stay home long enough to recoup the fee. If you want to avoid these costs, you will likely get a higher mortgage rate than advertised.

The minimum credit rating required by New American Funding is 580 but may apply to certain types of loans, such as: B. conventional mortgages, can be higher.

We spoke to a New American Funding Loan Officer to get an idea of ​​the lender’s fees and closing costs. There are no prepayment penalties on any of its loans, and you can set an interest rate for up to 60 days for free. A fee may apply if you need to extend the tariff lock.

According to the agent, New American’s closing costs may include an origination fee of $ 1,629 plus third-party fees such as title fees and a valuation fee. For a full breakdown of closing costs, including lender fees and rebate points, you’ll need to apply for pre-approval or submit a loan application.

Refinancing with New American Funding

If you Refinancing a home loan With New American Funding, you have several options. A loan officer can help you figure out which type of refinancing is best for your situation:

  • Interest and term refinancingThis will give you a new interest rate, a new loan term, or both.
  • Disbursement Refinancingwhere you take out a mortgage for more than you currently owe and use the extra money on any type of expense.
  • FHA Streamline RefinanceThis allows you to refinance an existing FHA mortgage.
  • VA refinancing loan to lower interest rates (IRRRL)which is designed for VA borrowers who want to lower their interest rate or switch from an adjustable rate to a fixed rate.

To get a breakdown of the fees you might pay for a loan refinance, you need to contact the lender. You can avoid the upfront costs by including the closing costs on your new home loan when you have enough equity.

New American financing compared to other mortgage lenders

New American funding Fairway Independent Mortgage Corp. Guild mortgage
Minimum 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% for 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
Major Loan Types Conventional, Jumbo, VA, FHA, USDA, Home Improvement Loans, Floating Rate, Fixed Rate, Refinance, Payout Refinance, Reverse Mortgages, Home Equity Lines Conventional, Jumbo, VA, FHA, USDA, Various Home Improvement Loans, Floating Rate, Fixed Rate, Refinance, Payout Refinance, Reverse Mortgage, Home Loans, Home Equity Lines Conventional, Jumbo, VA, FHA, USDA, various home renovation loans, floating rate, fixed rate, refinance, payout refinance, energy efficient mortgages, prefab home loans, bridging loans, reverse mortgages

How To Shop Around To Get The Best Mortgage Rate

Getting the best deal is so important because you can save hundreds or thousands of dollars over the life of the loan.

Take a look at an example: let’s say you want to buy a $ 200,000 home with a 10% down payment and a 30 year term. You will get quotes from two different lenders – and while 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 comes out $ 808.
  • A rate of 3.25% results in a monthly P&I payment of $ 783.

The lower rate saves you $ 25 per month – and while that doesn’t sound like much, the savings add up to $ 9,000 over 30 years.

When buying a mortgage, submit applications to at least three lenders and obtain a mortgage Credit estimate. You can use this standardized form to compare interest rates and acquisition costs. A Online mortgage calculator can help you figure out your monthly savings.

Bottom line

New American Funding is a tough competitor to most borrowers – but with Spanish-speaking loan officers and homebuyer assistance programs, this lender makes a great service provider for first-time buyers and the Latinx community. It offers a full range of mortgage options and a quick digital application, but borrowers can get help within minutes if needed. But, as with any financial product, when looking to take out a home loan, it is always a good idea to compare quotes.