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New American Funding Review

Saturday, June 25th

2022 Home Loan Provider Reviews

New American Funding Review 4 Star Rating

New American Funding

4 Star Rating
  • "A+" rated and accredited by the BBB
  • "Buyer Accepted" program lets you make a cash offer
  • Licensed in 49 states with 167 locations nationwide
  • Portfolio of over 229,000 loans totaling $60.7 billion
  • Available loan types include 15- and 30-year fixed, VA, FHA, ARM, Jumbo, USDA, and Reverse Mortgage
  • Tens of thousands of five-star reviews

New American Funding is a family-owned direct mortgage lender that is committed to helping people improve their lives through home ownership. The company maintains a strong mission to lending in underserved communities, partnering with various initiatives to foster home buying for minorities, military service members, and promoting diversity within their own employee teams.

Daily rates posted

New American Funding posts daily rates for 15- and 30-year fixed home loans, plus FHA and VA 30-year fixed. But, before you get too excited about any of the rates you see, be sure to look at the disclosures: most of the quotes assume you're paying points for a lower rate, and you may need a certain minimum credit score to be eligible. Plus, there are a lot more mortgage types available here than just 15- and 30-year conventional fixed, so your best bet is to click on the "Buy a House" button and get started.

Get ready to answer lots of questions

You'll be asked the basic questions about what type of property you're buying, your credit score range, employment status, and so forth. You'll have to create an account at the end of the questionnaire, and then use the "get started" button to create a preliminary application. That step can feel a little scary, because New American Funding doesn't really tell you what they're doing here - until you get to the point where it asks for your SSN and assures you that it's a soft pull just to verify identity. (You can also skip that step.) Either way, this part is really detailed: you'll be asked to enter your employment income for the previous two years, your assets and liabilities, and much more. If there's anything you don't want to enter, you can click "next" or "skip for now" , and you'll still get to the NAF dashboard for your application.

Jumping the gun a little

We were disappointed that even after entering all of those details, we still weren't given a list of possible rates for our home loan. Our dashboard took us to a page that felt an awful lot like a full-fledged mortgage application: asking for an upload of two most recent bank statements, two years of tax returns and W2s, plus a purchase and sale agreement. Easy now, we said we were just in the "shopping around" phase of home-buying!

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Helps you make an all-cash offer

One feature offered by New American Funding that we didn't spot with many rival lenders is the Buyer Accepted program. If you're in a market where cash is king and offers contingent on financing are being laughed out the door, you might need an outside-of-the-box strategy for getting the home you want. How does it work? Essentially, New American Funding buys the house in cash (using a 3% payment from you as earnest money) and sells the house back to you for the original price. You'll pay a "small convenience fee" (that they don't disclose until later) that can be added into the purchase price. NAF can even rent the house to you until your financing is secured.

Plenty of positive feedback

Reputation-wise, New American Funding mostly comes out on top. The company has an "A+" and accreditation with the Better Business Bureau - always a good start. There were only a little over 150 complaints registered there over the last three years, which is pretty impressive considering that NAF has a portfolio of over 200,000 mortgages. We also found tens of thousands of five-star reviews, not just for the lender but also for specific, named agents. For the most part, people say the process is smooth and their agent was friendly and helpful.

A few snags in the process

On the other hand, some clients have experienced delays in the funding process. More than once, we found people referring to a free 60-day rate lock that didn't happen as promised; rates had gone up between the requested lock date and closing, leading to higher costs for the borrower. Others mentioned having a hard time getting rates after filling out a complete application (similar to our experience described previously).

Room for improvement but still solid

Still, on the whole New American Funding is a solid option among home loan providers. Their overall reputation is very positive, they offer a unique way to make a cash offer even with a traditional mortgage, and we appreciate their dedication to helping all prospective homeowners get the funding that they need. We'd love to see some improvements to the preapplication and quote process, but that doesn't get in the way of making New American Funding a lender we can recommend.

Where Can You Get the Best Home Loans?

Your first thought might be to visit your local bank or broker, but think again. Why? You're not likely to get the very best rates and terms there. True, you might get a promo or slightly lower interest rate for being a current customer, but will your financial institution shop around to find you the ideal loan for your situation?

More than likely, they'll fit you with whichever mortgage is convenient (or profitable) instead of working to get you a home loan with the best possible terms. With interest rates constantly fluctuating, it's never a bad time to start looking into your financing options if homeownership is your goal. Even if you're just curious to see how much you can ultimately afford when the time comes, that will help you start budgeting and saving to have enough to secure your new home when you're ready.

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Home Loan Provider FAQ

Yes, a home loan is the same thing as a mortgage: borrowing money to purchase a home. Home loans are different from home equity loans or home equity lines of credit: the former represents the funds you use to buy your home, while the latter two are used to borrow money against any equity you've built up in the property.
Lenders use many factors to determine your eligibility to take out a mortgage. One of the biggest is your credit history: your credit score, your debt-to-income ratio (i.e. how much you owe on credit cards and any other loans vs. how much you earn), any missing or late payments, and so forth. Other factors include the amount of your down payment, how long you've had steady employment, and the purchase price of the home you want to buy.
It's commonly said that you can afford to buy a home that costs anywhere from 1.5 to 2 times your yearly gross income, but there's a lot more to consider. How much will you pay for property taxes and insurance? Do you have any other debts, like car payments or student loans? How much money will you put down at closing? There are plenty of sites that offer tools to help you calculate how much you can afford to borrow when buying a home; these tools take into account many of these components to give you a more accurate picture of your borrowing power.
Prequalifying for a home loan means that you've taken an informal look at your finances to determine how much you can afford and whether you meet the minimum requirements to take out a mortgage. This can be done without going too deeply into your financial information. On the other hand, a preapproval is given when you complete a full mortgage application: the lender accesses your full credit report and gives you a written offer for a loan at a specific interest rate, subject to your finding a home to buy and completing the underwriting process. Having a prequalification or preapproval letter can make you a more compelling candidate to buy a home and may put you ahead of other parties making an offer.
Yes, especially if you're a first-time home buyer. There are VA loans with no down payment required if you have a military connection, USDA loans with 100% financing on rural properties, FHA loans for buyers with less-than-stellar credit, and many more. While those programs are all federal, there are additional home-buying programs offered by individual states that may also help you get a loan.
An escrow account holds money in reserve to pay your homeowner's insurance, property taxes, and PMI (if required). Your lender collects that money with your monthly mortgage payments, and then disburses the funds to your insurance company and local tax collector by the due date. Some home loans require you to have an escrow account, while others may allow you to pay your taxes and insurance on your own. (But you'll have to make sure to set aside the money, since it won't be collected automatically each month.)
PMI stands for "private mortgage insurance" . It's a fee you may have to pay each month if you're not going to make a down payment of at least 20% of the total loan amount. This third-party insurance coverage protects your lender if you default on your mortgage. You can usually request to have those payments removed once you've reached an equity level of at least 22%; that can be accomplished by making your regular monthly payments over time, by making additional payments towards the principal balance, or by submitting an appraisal showing that your home would currently sell for an amount that would give you the necessary equity (i.e. if home values have increased significantly since the date of purchase).
Absolutely. Some of today's most competitive rates are offered by online-only mortgage lenders with thousands of satisfied customers and a strong reputation for integrity, efficiency and affordability. Of course, it's always a wise idea to check out the background of any home loan provider you're considering prior to offering sensitive financial information or documentation. The Better Business Bureau is a good resource to determine a company's history, as well as current customer reviews.
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Continued from above...

Some mortgage terms stipulate that the funds can't come from a last-minute gift or contribution from a well-meaning family member, so plan ahead!

The easiest way to know how much you can borrow is by shopping for a home loan online. While some lenders require you to enter your personal information to show you their rates, others post sample rates online or let you choose your credit score range and other details to preview a more personalized quote. Be mindful that there's a difference between a "soft pull" on your credit - usually used to prequalify you, and only uses your address and phone number to verify your identity - and a "hard pull" that will impact your credit history.

The latter usually happens only when you've got a home under contract and you're ready to secure a mortgage, but pay attention to the fine print when you're checking out a lender's rates. You don't want to be "just browsing" and find out that your credit score took a nosedive with an unintentional hard inquiry on your report!

With many lenders interested in your business, how can you decide which one to use for your mortgage? Here are a few factors to look at before you complete a loan application:

  • Loan types. Most people choose a conventional fixed mortgage of 15 or 30 years, and the majority of lenders offer that. If you're looking for something different, like an FHA loan or an ARM, you might need to shop around a bit more.
  • Transparency. How easy is it to see the lender's current rates and fees? Can you get an idea on their main site or do you have to create an account first?
  • Closing costs. The best home loan providers will tell you what to expect well in advance. Some include that information in the disclosures in the fine print at the bottom of the site, even before you give them any of your personal details. Others provide it when you've given them enough info to verify your identity but before filling out a formal application. Some closing costs are negotiable, so don't be afraid to ask any lender to make you an offer.
  • Reputation. What do borrowers say about their experience with the financial institution? It's one thing to have great loan rates, but if the lender drops the ball during the purchasing process or if their customer service after closing is a nightmare, it's not worth the money you might save. Consider the lender's rating with the Better Business Bureau to start, but also look at recent customer comments to get a snapshot of how well the home loan provider is doing across the entire lifecycle of the mortgage (from pre-application to post-closing servicing).

To help you finance the home of your dreams, TopConsumerReviews.com has evaluated and ranked today's most popular mortgage lenders. We're confident that this information will be useful on your journey to home ownership. Congratulations!

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