New American Funding Mortgage Overview
New American Funding offers many options for borrowers with unusual circumstances. Their manual underwriting process and programs for the self-employed make it much easier to secure financing.
Their rates are among the lowest in the industry but watch out for their fees as they can be quite high compared to other lenders.
New American Funding Mortgage Pros and Cons
- Allows the use of non-traditional credit
- Uses manual underwriting
- Has a wide selection of loan options
- Has loan options for primarily Spanish speaking borrowers
- Transparent with their rates and fees
- The fees are higher than most lenders charge
- No quote without a credit pull
- Fees aren’t disclosed until you fully apply
How New American Funding Works
New American Funding is the king of ‘non-traditional’ loans. While you can find traditional loans there, they are great for underserved communities and self-employed borrowers. If you need a unique program, you’ll likely find it here.
New American works both online or in-person – you can decide how you’d like to apply for the mortgage and handle the processing. You can upload your documents or bring them to your loan officer in person.
New American Funding closes loans in around 35 days, and they offer manual underwriting, which means you’ll have a human looking at your qualifying factors rather than a computer if you have unique circumstances.
New American Funding Mortgage Types and Products
- 15-Year Fixed: The 15-year fixed loan is a great option for those with the means to afford a higher payment. You’ll get a great interest rate that remains fixed for 15 years and pay about half the interest you’d pay on a 30-year term. The 15-year term could save you tens of thousands of dollars.
- 30-Year Fixed: The 30-year fixed loan is the most common option. Your interest rate remains fixed for 30 years but is slightly higher than a 15-year rate.
- ARM: An ARM loan offers an introductory rate for 2 – 7 years, and then it adjusts annually. It’s good for borrowers who are buying a home for the short-term or who need the lower rate for the time being to save money.
- Conventional Loan: A conventional loan isn’t a government-backed loan, and it has strict underwriting guidelines. Borrowers need at least a 640 credit score and a max 45% debt-to-income ratio. You can use the conventional loan on any property, including primary, secondary, or investment homes.
- FHA Loan: The FHA loan is a government-backed loan program that’s for first-time and subsequent homebuyers. If you have less than perfect credit or a high debt-to-income ratio, it’s a good fit. The flexible guidelines make it easy to get the financing you need.
- Reverse Mortgage: A reverse mortgage gives borrowers ages 62 years and older access to their home’s equity without forcing them to sell their home. Borrowers can take the funds as a line of credit, monthly payments, or one lump sum.
- VA Loan: The VA loan is for military veterans or surviving spouses of those who lost their lives in the military. It doesn’t require a down payment, and it has the most flexible underwriting guidelines out of any loan program available today. Veterans can secure financing with no down payment and credit scores as low as 620.
- I CAN Mortgage: The I CAN Mortgage allows borrowers buying a primary residence to choose any term between 8 and 30 years. Borrowers need just a 620-credit score to qualify.
- Mortgage Refinance: New American Funding offers rate/term, and cash-out refinances. A rate/term refinance allows you to take advantage of lower interest rates and/or better terms, and a cash-out refinance provides access to your home’s equity at affordable rates. You borrow more than you currently owe and receive the difference in cash that you can use.
New American Funding Mortgage Rates
At first glance, New American Funding’s mortgage rates are lower than most lenders nationwide. But there’s a catch.
Their fees are typically higher than other lenders. To decide what is better for you, look at the big picture.
What will the loan cost over its entire term? Sometimes a higher rate makes sense if you can get lower fees, but higher fees and a lower rate cost less over the loan’s term.
New American Funding Mortgage Fees
New American Funding doesn’t charge an excessive amount of upfront fees, but to get the lowest rates that they advertise, you’ll need to pay discount points.
Since discount points are ‘optional,’ they don’t consider it a fee they charge. Instead, they make you feel like you’re choosing to pay the fee so you can get the lower rate.
Again, do the math and make sure it makes sense to pay the fee, especially if you don’t think you’ll be in the house long-term.
New American Funding Mortgage Features and Benefits
Various Loan Offerings
New American Funding has the largest loan selection out of most lenders today. They have loan programs that cater to those that otherwise might not find financing, including the self-employed or underserved communities.
New American Funding is transparent with its rates. You can view the day’s rates right on their website and get rate quotes instantly when you apply.
You can apply for a loan completely online if you’re comfortable using technology. This is great for borrowers who don’t have the time to meet with a loan officer and go over their options.
With everything online, you can send in your documentation at your convenience and not worry about delaying your loan.
Fast Funding Times
New American Funding usually closes and funds loans within 35 days. This is faster than the national average, especially in today’s market with the high demand for new loans.
How Does New American Funding Compare to Other Lenders?
#1. New American Funding vs. Better Mortgage
Better Mortgage is an online-only lender. They offer some of the lowest rates and fees because they don’t charge origination fees.
They focus only on ‘straightforward’ borrowers, though, which may not be you if you’re looking at New American Funding.
They are the opposite of New American, only offering conventional and government-backed loans for borrowers with qualifying factors they can easily approve.
>> More: Better Mortgage Review
#2. LoanDepot vs. New American Funding
LoanDepot is another online mortgage lender, but they do have over 200 locations if you need support in person.
LoanDepot specializes in fast closings, closing loans in half of the time of most other lenders, but New American Funding isn’t far behind them.
LoanDepot has a large selection of loan options, similar to New American Funding, including several government-backed loans and conventional loans.
>> More: LoanDepot Mortgage Review
#3. Guild Mortgage vs. New American Funding
Guild Mortgage focuses on the west coast and offers both online and in-person options. Guild promises a fast closing, even faster than New American Funding, but they have rates slightly higher than New American.
Guild doesn’t offer the same level of transparency either – you must talk to a loan officer to get any details.
>> More: Guild Mortgage Review
Is New American Funding a Good Choice for Mortgages?
If you have unique circumstances, yes, New American Funding is a good choice for mortgages. They use manual underwriting and have relaxed guidelines for self-employed borrowers that you won’t find elsewhere.
If you have traditional qualifying factors, though, you may want to look elsewhere as New American Funding’s fees are higher than most other lenders.
How Do New American Funding Mortgage Rates Compare to the National Average?
New American Funding boasts some of the lowest rates in the industry, well below the national average. They make up the difference in the fees they charge.
Rather than paying interest monthly, you’ll pay a large portion of it upfront in the discount points, so it seems like you’re getting great rates when you’re spending the same amount, if not more.
What Types of Mortgages Does New American Funding Offer?
New American Funding offers many loans, including purchase, refinance, reverse mortgages, fixed-rate loans, ARMs, and even interest-only loans.
Does New American Funding Offer Mortgage Refinance?
Yes, New American Funding offers both rate/term and cash-out refinance options. You can secure a lower interest rate or better term with a rate/term refinance or take cash out of your home’s equity with a cash-out refinance.
>> More: How to Refinance Your Mortgage
What Credit Score Do You Need for New American Funding?
New American Funding has flexible guidelines, including allowing low credit scores. While the exact credit score you need depends on the loan program, many borrowers can secure financing with a credit score as low as 580.
Bottom Line: New American Funding Mortgage Review
If you have unique circumstances, New American Funding can help you secure the financing you need.
While they may not be the best lender for someone with straightforward qualifying factors, they may offer your best chance at securing financing if you’re self-employed or have other unique circumstances.