New American Funding is a great choice for first-time homebuyers who are looking for a lender with a proven track record of customer satisfaction. The lender offers flexibility that is difficult to match, going so far as to allow borrowers to pick the exact number of years of their loan term. It also provides aggressive pricing when compared to major mortgage lenders.
- New American Funding: Exceptional Service and Flexibility for Homebuyers
- How Does New American Funding Compare?
- Customer Service and Mortgage Servicing
- Mortgage Loan Products at New American Funding
- Where Can You Get a Mortgage With New American Funding?
New American Funding: Exceptional Service and Flexibility for Homebuyers
New American Funding stands out for its focus on meeting customer needs, as it offers both great service and a high level of customization in its loan products. For instance, New American Funding provides in-house loan servicing for almost all of the mortgages the company originates. This reduces the confusion and friction that is all-too-common for lenders who typically hand off loan servicing duties to third parties.
New American Funding also gives applicants a great deal of choice when it comes to loan terms and products. The company allows applicants to pick conventional loan terms anywhere between eight and 30 years, which means you can fine-tune the monthly payments to work within your budget or long-term plans. Most lenders usually only offer standard 30-year or 15-year terms.
However, New American's web presence doesn't do a good job of backing up these strengths. The company's website lacks the type of rate information and pricing tools that are common in today's mortgage industry. Many other lenders provide tools for borrowers to estimate their loan costs, by contrast, we found the calculators on New American's site to fall short in this regard, as they don't allow users to price in market rates or location-based estimates.
New American's lack of digital origination options is another disadvantage, particularly for borrowers who prefer shopping online. If you want a rate quote or to apply for a loan, you'll need to call a loan officer directly. Finally, New American Funding does not offer home equity loans or home equity lines of credit (HELOCs), which are available at most other lenders.
How Does New American Funding Compare?
The rates offered by New American Funding were competitive when compared with the largest lenders in the country. According to a company representative, New American Funding spends less on advertising and marketing than larger online competitors such as Quicken Loans, and it has a smaller network of branches than its national bank counterparts, Bank of America and Wells Fargo. As a result, New American Funding claims to be able to pass these cost savings along to customers in the form of lower rates.
30-Year Fixed-Rate Mortgage Estimates
|New American Funding||Chase||Wells Fargo||Bank of America|
We compared the three largest national banks to New American Funding using rates based on a 30-year fixed-rate mortgage for a $200,000 property and 20% down payment. Based on rates provided by a loan officer, we found that New American Funding's mortgage rates were more competitive than those offered by the major U.S. banks. However, New American also quoted a significantly higher loan origination fee of $1,629 than its larger competitors, charging over $400 more than Bank of America.
This means that choosing New American will require slightly more money upfront in exchange for a slightly better long-term deal on the rate. It's also unlikely that you'll be able to get the origination fee rolled into the loan. Unlike some other closing expenses, the origination fee is usually set and collected by the lender.
Customer Service and Mortgage Servicing
New American Funding performs exceptionally well in customer satisfaction. As the servicer for most of its own loans, New American differs from competing lenders who hand off servicing responsibilities to other companies after closing. The company's low ratio of complaints per origination indicates that most borrowers with New American had a hassle-free experience.
Mortgage-Related Complaints at Major Banks, 2013–2018
|New American Funding||Chase||Wells Fargo||Quicken Loans|
|Ratio of Complaints||0.09%||1.63%||1.31%||0.08%|
|2017 JD Power Rating||N/A||764||745||840|
Based on our review of borrower complaints submitted through the Consumer Financial Protection Bureau (CFPB), New American Funding received a total of 121 complaints in the period between January 2013 and June 2018, all of which were subsequently addressed and resolved by the lender. Its ratio of complaints to mortgage originations was far lower than the ratios achieved by any of the major U.S. Banks.
When compared with online lenders, New American Funding's ratio of complaints to originations was on par with competitors such as Quicken Loans, a company that has historically demonstrated excellent customer service. New American Funding's ability to achieve such high levels of customer satisfaction is impressive, especially given that the lender has been operating since 2003.
Beyond the high quality of its services, New American Funding has a demonstrated focus on expanding diversity and affordability in homeownership. It's one of the few lenders that prominently features bilingual loan officers that cater to Spanish speakers. Depending on where you live, New American Funding can also help you apply for local government grants to reduce your down payment or offset your closing costs.
Mortgage Loan Products at New American Funding
New American Funding has some of the most flexible loan terms we've seen at any home loan company. The lender offers almost every conforming and nonconforming loan package under the Fannie Mae and Freddie Mac umbrella, in addition to jumbo mortgages with fixed-rate, adjustable-rate and interest-only terms. This makes the lender a solid all-around choice for borrowers looking to purchase property across the country.
New American Funding also features the unique ICAN mortgage program, which allows borrowers to pick fixed terms that work for them. Where most other lenders ask borrowers to pick either a 30- or 15-year term, New American Funding allows you to select any term length between eight and 30 years.
Conventional Mortgage Products
|Mortgage Product||Features||Recommended for:|
|Provides a fixed interest rate and payment through life of loan||Borrowers seeking a standard conforming mortgage|
|Borrowers who plan to sell or refinance their home within a few years|
|Nonconforming loan that exceeds $424,100 (and $637,150 in certain high-cost areas)||Borrowers seeking to purchase properties in high-cost locations (as designated by Fannie Mae)|
|Borrowers seeking a fixed-rate conforming mortgage but want more control over their repayment period|
New American Funding also provides a solid selection of government-sponsored refinancing options through the Federal Housing Administration (FHA) and Department of Veterans Affairs (VA). With the VA cash-out refinance, veterans can draw on their home equity with minimal paperwork and no money out of pocket, even if they're currently in a non-VA mortgage. Borrowers with insufficient cash or below-average credit can take advantage of FHA loans at New American, which require little or no down payment for qualifying borrowers.
Government-Sponsored Home Loans at New American Funding
|Mortgage Product||Features||Recommended for:|
|Borrowers with less than perfect credit or without enough funds for a down payment|
|Allows borrowers to receive up to $35,000 in cash for home renovations||Borrowers with less than perfect credit who need funds for home renovations|
|Active-duty military or Veterans who want to purchase a home|
Finally, New American Funding offers reverse mortgages, which aren't commonly offered by conventional lenders. Reverse mortgages allow homeowners over the age of 62 to cash out on their home equity in the form of direct payments from the bank. This is an attractive option if you need extra retirement income, since the funds are only repaid after death. However, you should consult with family and financial professionals before obtaining a reverse mortgage, as it can negatively impact the value of any property you intend to pass on to heirs.
New American Funding: Refinancing and Reverse Mortgages
|Mortgage Product||Features||Recommended for:|
|VA Interest Rate Reduction Refinancing Loan (IRRRL)||Active-duty military or veterans who wish to refinance their mortgages into a lower rate or payment|
|VA Cash Out Refinance||Allows you to pull cash out of your home's equity, even if you're currently in a non-VA loan||Active-duty military or veterans who want to simultaneously refinance and cash out on their home equity|
|FHA borrowers who want to simultaneously refinance and cash out on their home equity|
|Bank makes cash payment to you in exchange for home equity||Older borrowers over the age of 62 who wish to cash out on their equity|
Where Can You Get a Mortgage With New American Funding?
New American Funding is a licensed mortgage broker everywhere in the U.S. except for New York and Hawaii. The lender has a network of around 160 brick-and-mortar locations for borrowers who want face-to-face service. Most of the lender's branches are located across the western, midwestern and southern states.
Borrowers who live in states without a physical branch can complete their mortgage applications online and over the phone. Once you're preapproved for a mortgage, the lender will coordinate all the details of the closing on your behalf through the title and real estate agents. To apply for a mortgage, you can schedule a call through the website, call a loan officer directly, or visit a nearby loan office.