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. It is best known for 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 (in 32 states) or using the online platform. The digital platform 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 Hawaii
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.
While New American Funding does serve 49 states, it isn’t licensed in Hawaii. Hawaiians: 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 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.
- Home Equity Line of Credit (HELOC): A revolving line of credit secured against the borrower's home equity. The borrower can draw as much as they like, up to the pre-agreed credit limit.
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).
One of the things we like most about New American Funding is that it displays its rates at the top of the home page. This is no surprise given its rates are well below the national average. As discussed, New American Funding offers borrowers the opportunity to earn an even lower rate for a 1-3-year introductory period in exchange for a one-time fee. Repayment terms are for 15-30 years with a standard loan or 8-30 years with a customizable I CAN Mortgage (see “Loan Features” above).
Here’s a sample of the best interest rates from New American Funding on March 22, 2021 (when the national average rate for a 30-year mortgage was 3.09% and average rate for a 15-year fixed mortgage was 2.40%).
- 30-year fixed: 2.990% (3.180% APR)
- 15-year fixed: 2.250% (2.606%)
- FHA 30-year fixed: 2.625% (3.487% APR)
- VA 30-year fixed: 2.625% (3.094% 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 32 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.