New American Funding Mortgage Review 2020

Good for: borrowers who need to be evaluated on the basis of nontraditional credit and those interested in various down payment assistance programs.

Hal M. Bundrick, CFPSeptember 23, 2020

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Our Take

4.5

NerdWallet rating 

The bottom line: New American Funding offers a large menu of loan products, including government loans; it has an online application and just under 200 branches in 49 states and the District of Columbia.

New American Funding

at New American

Min. Credit Score

700

Min. Down Payment

3%

National / Regional

National

Loan Types and Products

Purchase, Refinance, Home Equity, Reverse, Jumbo, Fixed, Adjustable, FHA, VA, USDA

See your personalized New American Funding rate

Interest Rate
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Monthly Payment
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Fees
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Total Interest
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See your personalized rate

Pros & Cons

Pros

  • Uses manual underwriting to evaluate creditworthiness, in some cases.

  • Offers a fully online mortgage application, rate quotes, document upload and loan tracking.

Cons

  • Mortgage rates offered to borrowers are higher than the government-reported median of all lenders.

Compare to Other Lenders

Min. Credit Score

640

Conventional:

640

FHA:

640

VA:

640

USDA:

640

Min. Credit Score

620

Conventional:

620

Min. Down Payment

3%

Min. Down Payment

3%

Loan Types and Products

Purchase, Refinance, Jumbo, Fixed, Adjustable, FHA, VA, USDA

Loan Types and Products

Purchase, Refinance, Jumbo, Fixed, Adjustable

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Full Review

Due to the coronavirus pandemic, getting a mortgage may be a bit of a challenge. Lenders are dealing with high loan demand and staffing issues that may slow down the process. Also, some lenders have increased their fees or temporarily suspended certain loan products. If you can’t pay your current home loan, refer to our mortgage assistance resource. For the latest information on how to cope with financial stress during this pandemic, see NerdWallet’s financial guide to COVID-19.

New American Funding is among the very few national mortgage lenders that can claim to be family-owned. Sure, there are small mom-and-pop lenders in communities across the nation that can make the same claim, but New American Funding has grown into a top 20 national lender, based on the latest loan origination volume, according to data compiled under the Home Mortgage Disclosure Act.

Founded in 2003 by Rick and Patty Arvielo in Orange County, California, New American Funding has grown to be a $14 billion lender with a national profile and an emphasis on serving the underserved.

New American Funding at a glance

In 2019, over 19% of New American Funding’s loan volume was attributed to Hispanic customers, and over 9% of its loans were originated to Black borrowers (compared with national numbers of 7.85% and 6.22%, respectively).

Here’s a breakdown of New American Funding’s overall score:

  • Variety of loan types: 5 of 5 stars

  • Variety of loan products: 4 of 5 stars

  • Online convenience: 5 of 5 stars

  • Rates and fees: 2.5 of 5 stars

  • Rate transparency: 4 of 5 stars

New American Funding mortgage loan types and products

New American Funding is a nonbank lender with a good selection of loan products, including purchase, refinance and more. New American Funding also features cash-out refinance mortgages. And, of course, you can choose from fixed-rate and adjustable-rate terms.

Government-backed loans are in the mix, too, with FHA and VA mortgages.

New American Funding offers reverse mortgages, which are not always on the menu at typical mortgage lenders.

The lender also has first-time home buyer programs and works with borrowers to find state and local down payment assistance programs.

New American Funding says jumbo loans and home equity lines of credit are available, too, but loan shoppers won’t find these options listed on its website. According to the lender, borrowers who contact the New American Funding call center in search of these products will be referred to a loan officer in a local branch office, if available.

New American Funding online convenience

Your loan application can begin in person, by phone or online. Documents can be uploaded, and electronic signature is also available.

Average closing time is less than 35 days, New American Funding says, and there is no charge for an interest rate lock.

A pre-qualification can be initiated online, though you will need to contact New American Funding before it issues a pre-qual letter.

With the ability to use manual underwriting, New American Funding can look at each borrower’s financial picture more comprehensively, rather than relying solely on automated models, according to Frank Fuentes, national vice president of multicultural community lending.

“That’s a huge advantage for us in working with underserved markets,” Fuentes says. “We take a ‘makes-sense’ approach to underwriting loans, whether it’s a purchase or refi, and we aren’t quick to deny a loan. We look at the customer’s profile from all different angles.”

English/Spanish bilingual agents are available to assist. New American Funding customer service is available from 7 a.m. to 9 p.m. Central Time weekdays and 10 a.m. to 2 p.m. Central on Saturdays.

New American Funding mortgage rates and fees

One of the most important considerations when choosing a mortgage lender is understanding what the loan will cost. In order to provide consumers with a general sense of what a lender might charge, NerdWallet scores lenders on two factors regarding fees and mortgage rates:

  • A lender's average origination fee compared with the median of all lenders reporting under the Home Mortgage Disclosure Act. New American Funding earns 3 of 5 stars on this factor.

  • A lender's offered mortgage rates compared with the best available on comparable loans. New American Funding earns 2 of 5 stars on this factor.

Borrowers should consider the balance between lender fees and mortgage rates. While it's not always the case, paying upfront fees can lower your mortgage interest rate. Some lenders will charge higher upfront fees to lower their advertised interest rate and make it more attractive. Some lenders just charge higher upfront fees.

You can decide to buy discount points — a fee paid with your closing costs — to reduce your mortgage rate.

Deciding whether to pay higher upfront fees is a matter of considering how long you plan to live in your home and how much cash you have to apply toward closing costs when you sign the loan paperwork.

New American Funding mortgage rate transparency

If you’re looking for information on interest rates, tap on "Mortgage Rates" from the menu and you'll see rates and APRs for four popular loans.

Drilling down on "View Disclosures" shows you the fine print.

On the day we looked, the disclosures showed that New American Funding was including two discount points and considering a 60% loan-to-value on conventional loans to sweeten its advertised fixed mortgage rates. It's a good idea to look for clues like these when shopping rates online so that you won't be disappointed when you are quoted a higher rate.

NerdWallet’s star ratings for mortgage lenders are awarded based on our evaluation of the products and services each lender offers to consumers who are actively shopping for the best mortgage. The five key areas we evaluated include the variety of loan types and products offered, online conveniences, online mortgage rate information, and the rate spread and origination fee lenders reported in the latest available Home Mortgage Disclosure Act data. To ensure consistency, our ratings are reviewed by multiple people on the NerdWallet Mortgages team.