New American Funding Mortgage Overview – 2019
New American Funding Mortgage Overview: Driven by a desire to make the mortgage process more efficient and easier to access for potential homebuyers of diverse backgrounds and financial situations, Rick and Patty Arvielo founded New American Funding in 2003. For more than 15 years, the Orange County, Calif.-based mortgage lender has been helping families through the home buying process via an extensive offering of loans and the expertise to match individuals with the right loan product for them.
New American Funding has expanded rapidly throughout the U.S., growing into a top-30 lender with 214 branches and a $31 billion portfolio of loans without abandoning its identity as a true family-owned business. As a Fannie Mae, Freddie Mac and Ginnie Mae direct lender, seller and servicer, NAF emphasizes an atmosphere of teamwork and accessibility for all, especially Latino families who face unique challenges in purchasing a home.
In addition to its loan services, NAF also has lending divisions that cater to builders and real estate firms. The company utilizes the latest technology with online tools and mobile apps to help connect all the parts of the mortgage process.
With glowing ratings — out of more than 6,600 reviews on real estate website Zillow, the company has earned 4.933 out of 5 stars — NAF is built on the principles of providing excellent customer service throughout the mortgage process. The company uses manual underwriting to evaluate each borrower rather than relying on an automated system that can rule out many potential homeowners.
Types of Loans Offered
From its beginning, New American Funding has offered a variety of loans, including those that typical mortgage lenders can’t or don’t want to provide. New American Funding mortgage products include fixed- and adjustable-rate purchase and refinance loans as well as jumbo loans, interest-only mortgages and even home improvement loans.
Conventional loans are not guaranteed by a government agency, so they often come with fewer restrictions and more flexible terms than those insured by a U.S. agency. Most conventional mortgages follow Congressionally-approved guidelines for lending via the Fannie Mae and Freddie Mac programs. Typically, the best rates are available to those with good or excellent credit scores. Down payments can be as low as 3%, with private mortgage insurance only needed until you reach at least 20% equity.
30-Year Fixed Loans
With a fixed loan, the interest rate will never change for the life of the mortgage. Your house payment stays the same every month until the loan is paid off in 30 years, unless you refinance. The stability of a 30-year fixed loan is popular with first-time home buyers.
15-Year Fixed Loans
A shorter fixed loan gives you the security of having consistent monthly payments, but lets you pay off your loan in half the time. For people planning to retire in less than 30 years, a shorter fixed loan can ensure that you own your home outright before you stop working. You’ll also pay less interest over the life of the loan.
I CAN Mortgage Loans
Flexibility is the main benefit of an I CAN loan. Borrowers can choose any term between 8 and 30 years; a shorter period can save money on interest. You can choose the shortest term that matches what you can afford for monthly payments. These loans are also great for homeowners who want to refinance without starting a 30-year fixed term.
Adjustable Rate Mortgage (ARM) Loans
With an ARM loan, borrowers pay an adjusted rate of interest that fluctuates with the market. Most ARM loans start with a set period of fixed interest and then adjusts. Limits on how much the interest can adjust makes this type of loan less risky than similar mortgage options in the past. Overall interest rates and, therefore, payments are lower, making ARM loans appealing to buyers who anticipate their income going up over time or who don’t plan to own their property for a long time.
Non-Qualified Mortgage (Non-QM) Loans
Many people have the income to be homeowners but don’t qualify for a traditional mortgage based on their tax information or W-2s. A non-QM loan doesn’t have to follow certain government regulations that require this kind of documentation, and is a much more flexible solution for many types of borrowers, such as self-employed workers. Many adjustable- and fixed-rate options are available.
Self-Employed Mortgage Loans
Many people who work for themselves or have seasonal employment lack the kind of traditional documentation that mortgage lenders request. A mortgage for a self-employed borrower might use other ways to verify income, like bank records or Profit & Loss statements.
With the tight regulations on the mortgage industry, traditional loans may not be able to finance a higher-end property. Jumbo loans can be greater than federal guidelines allow. These non-conforming loans are very flexible and let you borrow up to $15 million.
Interest Only Mortgage Loans
For borrowers without a high current income, interest-only loans provide a way to afford a home now. After a few years — usually 5 to 10 — monthly payments will increase to include loan principle as well as interest. You can pay more than the interest if your circumstances allow.
The Federal Housing Administration insures some types of loans that require a lower down payment than a traditional mortgage. Originally designed for first-time buyers and borrowers with troubled credit histories, today FHA loans with their low rates are an option for many different types of potential homeowners.
Mortgage loans insured through the U.S. Department of Agriculture were once thought of as available for rural buyers only, but they are actually an option for many buyers, including those purchasing a home in the suburbs. People with lower credit scores or no credit history can qualify for a USDA loan, and in many cases, no down payment is required.
If you have past military experience, you may qualify for a low-rate loan insured by the U.S. Department of Veteran Affairs. These VA loans don’t require a down payment and have lower fees than most mortgage loans. You can also qualify for a VA loan to refinance a mortgage you already hold.
Cash-Out Refinance Loan
While New American Funding, like many independent mortgage companies, do not offer Home Equity Lines of Credit (HELOCs), they do help you achieve your financial goals with a cash-out refinance loan. The cash you may be able to receive is based on the equity you have in your home; you must, however, refinance and take a new mortgage as part of getting the money you might need to make home improvements, pay off debt or pay for higher education.
Home Improvement Loans
Whether you’re buying a home that needs updates or are planning to remodel your existing house, a FHA 203K renovation loan can incorporate those costs into your mortgage. This type of loan is insured by the Federal Housing Administration and gives you up to $35,000 for renovation costs, even if that puts you over the appraised value of the property.
Reverse Mortgage Loans
In a reverse mortgage, a lender pays you money each month based on the equity in your home. The loan must be paid back when the property is sold or the borrower dies. This type of loan is designed primarily for older homeowners who need to convert their equity into money for living expenses. Borrowers must be at least 62 years old and able to pay all taxes, fees and maintenance associated with the property.
How to Get Started with New American Funding
With more than 215 branches, NAF has many locations where you can get in-person assistance and learn about the mortgage options and resources like down payment assistance that may be available to you. Most offices have bilingual loan officers to help Spanish-speaking borrowers.
Begin a loan application in person at a branch, or by phone, email or online. Agents are available by phone from 7 a.m. to 7 p.m. and many hours on the weekends. From start to finish, the mortgage process is streamlined and simple. Most loans close in less than 30 days.