New American Funding is a family-owned independent mortgage lender serving borrowers in 49 states and DC. It has appeared in the annual Inc5000 list of the fastest-growing privately held companies in the United States several times. One of the main reasons for its success is its customizable loan options, including mortgage rate buydowns (where the borrower pays a one-time fee to earn a lower interest rate) and flexible 8-30-year repayment terms.
You can apply for a mortgage from New American Funding by walking into a branch or using the online platform.
The online platform is similar to that of other major lenders, and involves the following steps:
- Complete a short pre-approval form. Includes questions about the type of home you wish to purchase, your employment status and income, estimated credit score, disclosure of bankruptcies or foreclosures in the past 3 years, and of course your name and contact details.
- Next, you’ll hear from a New American Funding agent who will take you through all the documentation you’ll need to provide to get formally approved.
- From what we can gather from customer feedback, the time it takes to close a mortgage is similar to other lenders (i.e. 30-60 days).
Customizable loan options
Competitive interest rates
Not licensed in New York
No home equity loans
The best thing about New American Funding is that there’s a great deal of flexibility built into each loan. While most lenders restrict you to a 15-year or 30-year term (or occasionally loans in other intervals of five, such as a 10-year, 20-year, or 30-year term), New American Funding lets you choose any number from 8-30 years. It also gives you the opportunity to lower an already market-beating interest rate in exchange for a one-off fee.
One small downside is that this isn’t a 100% nationwide lender. While New American Funding does serve 49 states, it isn’t licensed in the fourth-largest state by population: New York. New Yorkers, if you’re reading this: you’ll need to search around for other lenders for your next purchase or refinance.
New American Funding offers a wide range of loan types, ranging from conventional and government-backed loans to customizable loan options (which we’ll discuss in the next section, “Loan Features”). Like most mortgage lenders, it supports purchasing and refinancing, and it offers a choice between a fixed rate or adjustable rate.
Here’s the breakdown:
- Conventional loan: Regular conforming loan with 20% down payment.
- Conventional loan – low down payment: Same as a regular conventional loan, but with a 3% down payment in exchange for a higher interest rate and commitment to paying monthly private mortgage insurance (PMI).
- Jumbo loan: Conventional loan above the FHA’s conforming limits (548,250 to $822,375 in 2021, depending on the location of the property you purchase).
- FHA loan: Government-backed mortgage loan with 3.5% down payment, for eligible borrowers with credit score of 580-619.
- VA loan: Government-backed mortgage loan with zero down payment, for eligible veterans, service members and select military spouses
- Reverse mortgage: Government-backed equivalent of a home equity loan offered to people aged 62 or older.
As mentioned, New American Funding offers a greater level of customizability than most mortgage lenders.
* Mortgage Rate Buydown: This is when a borrower pays an additional charge (called a ‘point’) in exchange for a temporary lower interest rate and lower payment on their mortgage. This one-time fee is paid at closing by the borrower. There are three buydown options:
- 1-0 buydown, i.e. a 1% lower rate for the first year
- 2-1 buydown, i.e. a 2% lower rate for the first year and 1% lower rate in the second year
- 1-1-1 buydown, i.e. a 1% lower rate for the first three years
* I CAN Mortgage: This is when the borrower chooses a different repayment term to the standard 15, 20, 25 or 30-year term. Options are for 8-30 years with down payments as low as 5% (or refinancing of up to 95% of your primary home’s value).
The interest rates at New American Funding are well below the national average. As discussed, it offers borrowers the opportunity to earn themselves an even lower rate for a 1-3-year introductory period in exchange for a one-time fee.
Here are some sample rates, as of December 2020:
- 30-year fixed: 2.500% (2.687% APR)
- 15-year fixed: 2.000% (2.358%)
- VA 30-year fixed: 2.250% (3.104% APR)
- FHA 30-year fixed: 2.250% (2.714% APR)
New American Funding is led by married couple Rick and Patty Arvielo and based out of Orange County, California. Founded in 2003, it has grown into one of the country’s largest independent mortgage lenders, originating more than $40 billion in loans to date. It serves borrowers in 49 states and DC (with New York being the only place it isn’t licensed). It has branches in 31 states, and can be reached by phone from anywhere on 855-276-3747 or through its website.
New American Funding offers the level of customer service and flexibility of loan options that could only come from an independent mortgage lender. Rather than offer only cookie-cutter loan options like the big banks, New American Funding lets you play a part in determining the most important aspects of your loan–namely, your interest rate and repayment term.