New American Funding

New American Funding is best for homebuyers who prefer a personalized and straightforward mortgage process. It may also be a good option for borrowers with less-than-perfect credit or self-employed individuals, as there are flexible qualification requirements.

While more digitally-minded homebuyers may not like that the application process is not solely online, others may appreciate the “in-real-life” approach to finding the right mortgage for their financial needs.  Additionally, New American Funding may not be the ideal choice for borrowers who prioritize the lowest interest rates, as its rates tend to be higher than the national average.

To assess New American Funding, we looked at how it compares to its competitors, as well as what ConsumerAffairs reviewers had to say about certain features. We found that New American’s application process and loan type options excelled against its competition.

We scored New American Funding’s rates as good because the starting rates for conventional, FHA and VA loans are available on its website and updated daily. However, for the most accurate rates based on your individual situation, you should contact New American Funding for a customized quote.

While many reviewers shared that the rates were good and on par to other lenders’ rates, our data shows that New American Funding was 0.05% higher than the national average in 2021. A year earlier, it was 0.07% lower than the national average. Interest rates can vary depending on many factors, including a borrower’s credit score and debt-to-income (DTI) ratio. Borrowers with excellent credit (800 and higher) and low DTI ratios (ideally less than 36%) usually get the best interest rates available.

New American Funding offers mortgages with either fixed or adjustable rates. A fixed interest rate won’t change over the loan term; an adjustable rate will. Many borrowers choose a fixed-rate mortgage because they prefer to keep their monthly payments the same.

However, an ARM (adjustable-rate mortgage) could make sense in some cases. For example, if mortgage rates are at 10-year highs, you may consider an ARM to take advantage of a low introductory rate for a few years.

After the introductory period ends, rates could come down and you may consider keeping the ARM or refinancing to a fixed-rate mortgage. Remember that there’s no guarantee rates will decrease, so it’s important to keep up with interest rate changes should you decide to get an ARM.

With New American Funding, one Texas reviewer praised, “[The loan officer’s] knowledge of the financial markets was vital to helping us with the timing for locking our interest rate.”

New American Funding average home purchase rate vs. national average

Many of our reviewers found the application process straightforward, and we gave it an excellent score since buyers can apply online and upload all their documents seamlessly.

You can start the application process by requesting a rate quote directly from the company’s website. You’ll input some preliminary information into the form, like your income, estimated credit score and down payment amount.

Once you’ve completed the form, you’ll create an account using a valid email address. A loan officer will reach out to discuss your loan options and help you complete an application. You may be required to upload certain financial documentation with your application, like a recent pay stub or a bank account statement.

After you’ve completed the application and submitted the required documents, you could receive a preapproval decision in as little as 24 to 48 hours.

One Idaho reviewer was even able to buy their property while traveling full-time in a fifth wheel. They said, “Every time we reached out, the rep was right there to respond to me and was patient with us getting documents back to her, considering we would have to stop and scan and send off that way. So, she made a challenging situation extremely simple.”

Another Kansas reviewer shared the same sentiment about the application process, saying, “I went on the website, registered and uploaded all the documents that I needed to upload. It was easy.”

New American Funding application features

We rated New American Funding as excellent when it comes to loan types since it offers many options for different types of buyers. Its mortgages include conventional loans (with fixed or adjustable rates), FHA loans, VA loans, USDA loans and jumbo loans. The company also offers reverse mortgages for borrowers 62 and older.

The lender is knowledgeable in loans for first-time homebuyers and veterans alike. A reviewer in California said, “New American Funding helped guided me through my FHA loan. Made it easy for a first home buyer like myself to purchase a home.”

A veteran reviewer from New Jersey said, “[The loan officer] made using my VA loan a possibility and I went from being a homeless veteran to owning the house I grew up in.”

Most fixed-rate mortgages come in 15-year or 30-year terms. However, New American Funding allows customizable loan terms with its I CAN Mortgage, which means you can choose a term anywhere between eight and 30 years. This may help you find a mortgage payment that fits your budget while also securing the best rates available to you.

The company also offers a buydown loan for borrowers who need to make expensive repairs to a new home, which allows for a reduced interest rate for the first year or two. With this type of loan, you could reduce your stated interest rate by 1% or 2% in the first year of your 30-year fixed-rate mortgage. This may help you lower your mortgage payment initially so you can afford to make those costly repairs.

Like other lenders, New American Funding saw a year-over-year increase in the number of home purchase applications it receives. In 2021, individuals initiated 57,519 home purchase applications. Of those applications, only one preapproval was denied, and about 4% (2,498) of applications were denied (the denial rate for the industry as a whole is about 8%). Ultimately, about 72% (41,636) of these home purchase loans were closed.

Loan applications for home purchases only by year

New American Funding discloses most of its borrower requirements online and seems to adhere to the industry standards for most loan types. Like other lenders, New American Funding requires a 620 credit score and a 3% down payment in order to qualify for a conventional loan.

For government-backed mortgages, credit score requirements are more lenient. The company allows for scores as low as 500 to qualify for an FHA loan (though you’ll need to offer a 10% down payment if your score is below 580).

New American Funding doesn’t disclose its minimum credit score for VA loans (it states that you’ll want a “good” credit score). However, you’ll only need 580 to qualify for a USDA loan (many lenders require a 640). VA and USDA loans allow for 100% financing, meaning down payments are not required.

However, a common complaint from reviewers for New American Funding is the underwriting process. Many customers were frustrated with having to verify their employment and submit the same documentation more than once.

One reviewer in Texas was happy with their overall buying experience but said, “Whoever was in underwriting was ridiculous with all the verification of employment requirements, especially when it came to the fact that I work from home. All of the hoops to jump through on that one point was beyond common sense. It held up the process for no reasonably good reason.”

Several reviewers felt their loan officer was transparent about the costs and fees involved, explaining everything clearly. This Arizonia reviewer was even able to save $4,000 in fees and get a lower interest rate with New American Funding over a competitor.

However, we rated New American Funding as good for its cost and fees because even though it promises low lender fees, it does not publish specific numbers on its website. Most lenders charge an origination fee, which is usually 0.5% to 1% of the loan amount. Some may also charge a separate application and underwriting fee, though many lenders lump all of those charges into the origination fee.

Keep in mind that origination fees are only a portion of closing costs, which can cost between 2% and 5% of the loan amount. Other closing costs include real estate taxes, home appraisal fees, mortgage insurance premiums (if applicable) and title fees.

It’s important to ask for an estimate of the closing costs before you agree to the loan. After you’re preapproved, your lender should give you a copy of the Loan Estimate, which itemizes each closing cost and fee.

Compare New American Funding to other lenders