We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. Learn more.

Key takeaways

  • A mortgage lender offering a wide variety of loan types to suit different financial situations
  • Offers special programs for Black and Hispanic borrowers, as well as for veterans and active-duty military customers
  • Interest rates and annual percentage rates (APRs) for mortgages are lower than those of other major mortgage lenders

Whether you’re buying a new home or looking at refinancing, finding the best mortgage lending company can be daunting. In this New American Funding review, we review the types of loans this company offers and compare them with those of other popular mortgage companies.

In 2021 and 2022, mortgage rates increased dramatically. This has sparked a flurry of new loan applications from prospective buyers, worried that rates will continue rising.

Unfortunately, the spike in rates means that buyers are saddled with pretty high average monthly payments. George Ratiu, Realtor.com's manager of economic research, recently said that “at the current rate, buyers of a median-priced home are paying around $219 more a month than a year ago, which adds more than $2,600 to their annual housing costs.”

If you’re worried about receiving high rates on a new mortgage, you might want to consider New American Funding. It offers a variety of mortgage loans to help you take your first steps toward homeownership at a rate you can afford.

For those looking to adjust their monthly outgoings, New American Funding also offers refinancing. The company’s resources explain the intricacies of how a New American Funding mortgage works. It also provides guides on different types of housing and how to get a better interest rate on your loan.

As you’re shopping around to find the right mortgage funding option, check out the following key points we’ve collated about New American Funding vs. three other popular mortgage lenders.

About New American Funding

New American Funding was founded in 2003 by Rick and Patty Arvielo and is now the largest Latino-owned private mortgage company in the U.S. With headquarters in Orange County, California, it now has more than 170 branches across the country. The Orange County Register recently named New American Funding as one of the best places to work for the tenth year running.

New American Funding focuses on improving the home buying experience for minorities and is now one of the largest lenders to Hispanic and Black borrowers.

New American Funding mortgage products

Here’s an overview of the mortgages New American Funding offers:

Loan type What is it? Pros Cons Popular with
30-year fixed-rate mortgage Steady monthly payments over 30 years Lower monthly payments Takes a long time to pay off Most home buyers
15-year fixed-rate mortgage Steady monthly payments over 15 years Shorter time to pay off Higher monthly payments Home buyers in a higher income bracket
Conventional loan Loan not insured or guaranteed by the government Greater flexibility and range of benefits offered Greater risk of foreclosure if you cannot keep up repayments Home buyers with stable long-term income prospects
I CAN mortgage Like a conventional loan with flexible repayment period from 8–30 years Possibility of paying off loan faster Greater risk of foreclosure if you cannot keep up repayments Single families purchasing a primary residence
VA loan Special low-interest loans for veterans or those in active military service No down payment required and no monthly premiums Only accessible for those working in the military Veterans and military personnel
USDA loan Government-insured loan Lower down payment than conventional loan A variety of guidelines to follow First-time home buyers with less than perfect credit
FHA loan Government-insured loan Lower down payment than conventional loan A variety of guidelines to follow First-time home buyers with less than perfect credit
Buydown loan Fixed-rate loan with initial lower payment rates Allows you to ease into mortgage payments Only applicable for primary residence First-time home buyers
ARM (Adjustable-rate Mortgage) Variable rate mortgage Offers upfront savings Interest rates can increase after first few years First-time buyers who expect to earn more income in the next few years
Reverse mortgage Loan for retirees to convert home equity to cash Gives an income stream in retirement Fees and interest rates can be high People over 62 years of age

New American Funding refinancing

Refinancing means replacing your existing mortgage with a new one, typically with better rates. It may also allow you to access cash immediately or eliminate certain costs, such as private mortgage insurance (PMI). New American Funding offers the following types of refinancing:


This type of refinancing involves taking out a loan that’s larger than your original one. After paying off your original loan, you’ll receive the excess in cash. This can be useful if you need a lump sum to cover unforeseen expenses like medical bills or elderly care.

Home equity line of credit (HELOC)

A HELOC functions a bit like a credit card: You can access cash up to the amount you’ve already paid into your mortgage. You’ll need to pay back what you borrow with added interest. People often use this type of refinancing to pay for home repairs or renovation.

FHA streamline

An FHA streamline refinance loan can lower your interest rate and requires less documentation than other refinance loan types. Alternatively, a streamline 5/1 ARM gives you a lower interest rate for the first five years.

VA interest rate reduction refinance loans (IRRRL)

This is a form of refinancing specifically for VA loans (mortgages guaranteed by the U.S. Department of Veterans Affairs). It’s another form of streamlined refinancing that requires less documentation than refinance loans typically do.

New American Funding rates

To know whether you’re getting the best deal on your mortgage, it’s important to understand funding rates. There are two to watch out for: the interest rate and the APR. The interest rate is how much the lender charges you for borrowing money. But it’s the APR that shows you the true cost of borrowing. It represents the interest rate plus the origination charges, discount points or any other fees or extra costs that are part of your loan.

It calculates the APR on the assumption that you’ll keep the loan for the entire term. However, because many people don’t — selling their home or refinancing it before they’ve paid off the mortgage — the APR is not always the most informative number to look at. Make sure you do the math and check how much the APR will be over the term you intend to keep the mortgage for.

As of Oct. 14, 2022, New American Funding rates were as follows:

  • 30-year fixed mortgage: 6.250% and 6.566% APR
  • 15-year fixed mortgage: 5.750% and 6.266% APR
  • FHA 30-year fixed mortgage: 6.125% and 7.204% APR
  • VA 30-year fixed mortgage: 6.125% and 6.795% APR

These are the rates if you have a good credit score.

New American Funding unique features

New American Funding stands out for several reasons:

Focus on diversity

Special programs like Latino Focus and New American Dream assist Black and Hispanic buyers with getting on the housing ladder. They provide education on home buying, help with accessing credit and raise awareness about opportunities for careers in mortgage lending.

Support for veterans and military personnel

The Military Heroes program is committed to raising homeownership among veterans and active-duty military. The company plans to lend $12 billion to this group by 2024.

Committed to education

New American Funding has a great selection of resources, including a mortgage glossary, to help you understand the technical terms you’ll encounter when you start researching mortgage funding.

14-day guarantee

The company guarantees it will close your purchase loan in 14 days or less.

Customer reviews

On Experience.com, New American Funding reviews are excellent, with an average of 4.869 out of 5 stars. Many customers were impressed with the personalized service they received from their advisor. Customers report satisfaction, quick service and a very smooth process.

Who New American Funding is best for

New American Funding makes a particular effort to assist Black and Latino people, as well as veterans and active-duty military personnel, toward home ownership. They also have some user-friendly information on grants for first-time home buyers.

Lender New American Funding Rocket Mortgage Better Veterans United
Rates (30-year fixed mortgage) 6.250% (6.566% APR) 6.875% (7.225% APR) 7.500% (7.532% APR) 6.375% (6.875% APR)
Customer Reviews (TrustPilot) 2.7 out of 5 stars 3.8 out of 5 stars 4.3 out of 5 stars 4.9 out of 5 stars

Tips for securing a mortgage

Before you start shopping around for your dream home, make sure you’re prepared so you can start the process smoothly:

Start with prequalification and preapproval

Before you start applying for mortgages, speak with a loan officer to get a prequalification letter (an initial assessment of your finances). You can then move on to preapproval, which is a more thorough process of assessing your finances with an underwriter. Completing both processes prior to searching for your dream home can speed up the buying stage later on.

Save as much as possible for your down payment

Generally, a down payment of at least 20% is considered wise. Putting down a smaller amount can lead to higher interest rates and extra insurance charges further along the line.

Improve your credit rating

You’ll need a credit score of at least 620 to be approved for a mortgage. The higher your rating is, the better chance you have of getting a low-interest loan.

Don’t quit your day job!

Most lenders will expect you to have been in stable, continuous employment for at least two years before applying for a mortgage. A long-term employment contract will also work in your favor.

What to know about selecting a mortgage lender

Choosing who you’re going to apply to for a mortgage is a big decision. Before you take the plunge, here are some tips:

Shop around

Before deciding on a lender, talk to at least three companies to check you’re getting the best deal possible.

Ask: Does my profile fit?

Look at the typical clientele of the lender you’re approaching. If you have poor credit, for example, check whether the lender has experience with this kind of situation.

Pay attention to star ratings

Do your research and read plenty of company reviews before you decide who you’re going to go for. This will give you a more accurate picture of the company than any claims it makes about its own services.

The bottom line

A New American Funding mortgage could be the right choice if you’re looking for a mortgage that’s more easily tailored to your situation and budget. The company’s lower-than-average interest rates and APRs are also attractive. As it doesn’t disclose its fees on its website, make sure you check these with your loan officer before agreeing to anything.

Update: This article has been updated to reflect current rates and practices of New American Funding.

Disclaimer: This story was originally published on March 24, 2022, on BetterCreditBlog.org. To find the most relevant information concerning New American Funding, please visit their website: https://www.newamericanfunding.com/