Latest News

View all articles »

Blog RSS Feed

FHA Versus Conventional...

Mortgage loans are like power tools: You get the best results by using the right one for the job at hand. For many borrowers that may mean bypassing the conventional route to find the one that fits your budget today and is the least likely to cause financial stress in the future.  

Read More »
All Blog Posts»

Mortgage FAQ

Why choose New American Funding for my home loan? 

How much help should I expect from a New American Funding Licensed Loan Consultant? 

How do I know which mortgage loan is right for me? 

What kinds of loans does the Federal Housing Authority, FHA offer? 

How do FHA loans compare to conventional loans? 

Do you have to buy mortgage insurance on an FHA loan? 

What if my credit is less than perfect? 

What is equity?

What is the difference between a fixed rate and adjustable rate mortgage? 

Does it make sense to refinance if I recently obtained a mortgage loan?

How much can I afford in mortgage payments?

What is an APR?

What is the minimum down payment required for a home loan?

How do I get started?

What about my privacy?

What exactly is an Interest Only Home Loan?

Who is an Interest-Only Home Loan For?

Pre-qualifying for a loan…

Mortgage Basics 

Top Ten Tax Deductions 

What if I have other questions?



Why choose New American Funding for my home loan? 
New American Funding has a wide range of loan programs that are competitively priced. Using the latest technology, we have made the borrowing process simple and convenient. We can offer you a competitive rate and eliminate fees associated with a loan arranged through a broker. Our commitment is to provide top quality service.

back to top


How much help should I expect from a New American Funding Licensed Loan Consultant? 

Our loan consultants have a full range of loan programs to offer and the very latest technology to expedite the loan process. They will listen to your needs and make sure they understand you completely, then discuss your options and make sure you thoroughly understand them. From application through funding, we make the loan process simple and convenient for you!

back to top
 

How do I know which mortgage loan is right for me? 
This is what our personal service is all about,  helping you make the best loan choice for your specific needs. Our loan consultants are experienced professionals with knowledge covering a wide range of home loan programs. Each consultant is able to explain the advantages of appropriate loan programs considering the specific financial goals of the customer.

back to top

 

What kinds of loans does the Federal Housing Authority, FHA offer? 

Fixed rate loans
Most FHA loans are fixed-rate mortgages (loans). In a fixed rate mortgage, your interest rate stays the same during the whole loan period, normally 30 years. The advantage of a fixed-rate mortgage is that you always know exactly how much your monthly payment will be, and you can plan for it.

Adjustable rate loans
Most first-time home buyers are a little stretched financially, so they want payments as low as possible at the beginning. With FHA’s adjustable rate mortgage (ARM), the initial interest rate and monthly payments are low, but these may change during the life of the loan. FHA uses the 1-Year Constant Maturity Treasury Index (1 Yr CMT the most widely used index, to calculate the changes in interest rates. An index is a measure of interest rate changes that determine how much the interest rate on an ARM will change over time. The maximum amount that the interest rate on your loan may increase or decrease in any one year is 1 or 2 percentage points, depending upon the type of ARM you choose. Over the life of the loan, the maximum interest rate change is 5 or 6 percentage points from the initial rate, again depending upon the type of ARM you choose. The advantage of an ARM is that you may be able to afford more house because your initial interest rate will be lower, as will your payment.

Purchase/Rehab Loans
Sometimes you might see a home you’d like to buy, but it needs a lot of work. FHA has a loan for rehabilitating and repairing single-family properties called the SF Rehabilitation Loan program (203k). You can get just one mortgage loan which includes the mortgage and the cost of repairs combined. The mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work. The advantage of this loan is that you can buy a home that needs a lot of work, but you still have only one mortgage payment, and you can complete the repairs after buying the home.

back to top

 

How do FHA loans compare to conventional loans? 

Conventional loans usually require a larger down payment. And, if you have less than perfect credit you may not qualify for many conventional loans even if the interest rates and fees are comparable to FHA. The best thing to do is compare the cost of the conventional loan to an FHA loan line-by-line. What are the fees on each? What is the interest rate? How much is the mortgage insurance on each? How much down payment is required? For some borrowers, a conventional loan may be less expensive. For many others, it will be more expensive than FHA.

back to top

 

Do you have to buy mortgage insurance on an FHA loan? 

Yes – as you will with most all of them. There is an up front mortgage insurance premium equal to 1.75% of the loan amount that is paid at settlement. In most cases, this mortgage insurance premium is included in your loan amount, so you are really paying it over the life of the loan. In addition, on loans with a term of greater than 15 years and a loan-to-value ratio of 90% or greater (meaning you are borrowing more than 90% of the value of the home), you will pay an annual mortgage insurance premium of 0.55% of the loan amount in monthly installments.

Most loans require mortgage insurance when your down payment is less than 20% of the sales price. On conventional loans, mortgage insurance is provided by private companies. Whether private mortgage insurance is less than, equal to, or more than FHA loan insurance will depend upon the loan program and your qualifications.

Compare the cost of FHA over the life of your loan and how much it costs monthly to conventional types of loans. With the protection you get with FHA – it’s a very good deal.

back to top

 

What if my credit is less than perfect? 

New American Funding offers programs for consumers whose credit has been impaired in the past. If you have a history of bankruptcy, late payments or other credit problems, we are here to help you determine possible financing options.

back to top

 

What is equity? 
Equity is the difference between the amount for which a home can be sold and the amount still owed on the mortgage. This important difference represents the homeowner’s financial interest in the property. A homeowner can borrow against the equity in his/her home with a home loan and use the funds for virtually any purpose . . . from debt consolidation to major purchases to home improvements. Because the loan is mortgage-based, interest on the home loan may also be tax deductible. Consult your tax advisor to see whether this advantage applies to you!

back to top

 

What is the difference between a fixed rate and adjustable rate mortgage? 
A fixed rate mortgage provides a rate of interest that remains the same for the life of the loan. An adjustable (or variable) rate mortgage (ARM) has an interest rate that adjusts periodically on the basis of changes in a specified financial index. Typically, adjustable rate mortgages start out at somewhat lower rates than fixed rate mortgages. They can fluctuate up, raising the monthly payment, or down, lowering the monthly payment, depending on the activity of the index to which they are tied. Our loan consultants can discuss the advantages of both types of mortgages to help you decide which product is best for you. See the most current mortgage rates in the nation with our Market Snapshot feature.

back to top

 

Does it make sense to refinance if I recently obtained a mortgage loan? 
It might be a good time to refinance even if you recently obtained a mortgage. Given today’s favorable interest rates, a rate lower than the one on your current mortgage may be available and may result in savings every month. By consolidating your existing first and second mortgages . . . as well as outstanding credit card balances and other debt into a single mortgage loan payment, you might be able to save a considerable amount. You can also benefit from the convenience of one single monthly payment. Our loan consultants can help you determine if this option works to your best advantage!

back to top

 

How much can I afford in mortgage payments? 
How much you can afford depends entirely on your specific personal financial situation. Our loan consultants can help you find out exactly what that amount may be.

back to top

 

What is an APR? 
This stands for Annual Percentage Rate; the total cost on a yearly basis in interest as a percentage of the loan amount. This figure includes such items as the base interest rate, primary mortgage insurance and the loan origination fee (points).

back to top

 

What is the minimum down payment required for a home loan? 
We offer home loans with down payments as low as 2.25%. That would be a $2,250 down payment for a $100,000 purchase price.

back to top

 

How do I get started? 
It couldn’t be easier. Just give us a call, or fill out our Get a Quote form! section of our website.

back to top

 

What about my privacy? 
New American Funding may share your data as noted in our Privacy Statement. Please see our Privacy Statement for more details.

back to top

 

What exactly is an Interest Only Home Loan? 

An interest-only loan is one that gives you the option of paying just the interest or the interest and as much principal as you want in any given month during an initial period of time. Interest only loans can be 30-year fixed-rate mortgages or adjustable-rate mortgages. Home Express Funding offers home loans that are interest-only for the first three, five, seven or ten years.

If you choose to make the interest-only payment, your monthly payment will be lower than it would be with an interest and principal payment. Your interest rate may or may not be lower than a traditional mortgage, but you will have the option of flexible payments. Interest-only loans allow you to control your payment amount and your cash flow in any given month during the interest only period.

back to top

 

Who is an Interest-Only Home Loan For? 

There are good reasons to consider an interest only loan. For instance, it might make good financial sense. Here’s how: On a traditional 30-year fixed-rate mortgage, roughly 70% of the payment goes toward interest during the first six or seven years of the loan. If your interest rate is low, then you’ve borrowed money at a good rate. Instead of paying down that low rate loan, you could take the extra money you’d have each month from making interest-only payments, and invest it in something that would bring you a higher rate of return. Or, you could pay down higher interest debt like credit cards. Depending on your loan amount, you could have access to thousands of dollars over the course of several years to invest or reduce high interest debt. That may be a wise financial move.

An interest-only home loan may also be a good option for people who expect to be in their homes for less than ten years. The average homeowner stays in their home between five and seven years. As mentioned before, mortgage payments are mostly interest for the first years of the loan. Many homeowners like the option of making interest-only payments and using the extra money as they please – save for college tuition, make home improvements.
Misconceptions About Interest-Only Loans A common misconception is that if you’re not paying down your loan’s principal, you’re not building equity in your home. Not necessarily true. Chances are that even if you’re not paying down your principal, you’re building equity in your home through appreciation.
Is an interest-only home loan right for you? Speak to a Home Express Mortgage Specialist Today!

back to top

 

Pre-qualifying for a loan… 

Getting pre-qualified for a loan gives you an idea of how much you might qualify to borrow based on your stated income, assets and liabilities. Since you have not actually applied for a loan and none of your information has been verified, the loan amount is in no way guaranteed.

Getting pre-qualified lets you know how much you qualify to borrow after your income, assets, and liabilities have been verified.
Call New American Funding to get Pre-Qualified or Pre-Approved!

back to top

 

Mortgage Basics 

Simply put, a mortgage is a loan you take out to finance the purchase of your home. It’s also a legal contract stating that you promise to pay back the loan on a monthly basis. Your monthly payment typically goes toward interest, taxes and insurance as well as the loans principal.

There are literally hundreds of variations of mortgages. Fortunately, there are just a few basics you need to know in order to understand most of them.
Fixed-rate mortgages have a fixed interest rate over the term of the loan. By far, most mortgages closed each year are fixed-rate mortgages. The advantage of a fixed-rate mortgage is that your monthly payment never changes. The disadvantage is that if interest rates fall below your fixed-rate and you want to lower your rate and consequently your mortgage payment, you’ll have to refinance.

Adjustable-rate mortgages (ARM) start with a lower interest rate than a fixed-rate mortgage for an introductory period – typically 1, 3, or 5 years – after which the rate adjusts – usually annually – based on a pre-determined index. An ARM is a good choice if you’re expecting to live in your home for less than five years and can also help you qualify for a larger loan.
The term of your mortgage is the number of years you have to pay back the loan. Most people opt for 30-year terms, but 15- and 20-year terms are available.
The down payment is the difference between how much you borrow and the purchase price of your home. And, in spite of what most people think, you don’t need a big down payment to buy a home. New American Funding offers many low and even zero down payment loans. For more information on our low and zero down payment programs, call New American Funding’s California mortgage lender specialist today for more details.

*Your loan will close as long as the property gets a satisfactory title and appraisal and your financial situation remains the same.

back to top

 

Top Ten Tax Deductions 

Your home may be brimming with tax advantages. How will you get all of the homeowner tax breaks you’re entitled to? Consult a professional tax advisor for details, but here’s a list of the top 10 deductions to consider.

1. Tax Deductible Mortgage Interest
Interest on the loan for your primary residence is fully tax deductible, if you qualify. Our Tax Savings Calculator can help you figure the tax advantages of home ownership.

2. Tax Breaks for Home Refinancers
If you refinanced, you may be able to write-off the points paid for the new loan. But, there’s a twist: you’ll have to deduct them proportionately over the life of your loan. So, if your new loan has a 30-year term, you’ll deduct 1/30th of your points each year.

A couple of things to consider: If you’ve refinanced before, and you have points from the previous refinance that you haven’t finished deducting, you can write off the rest of those points in the year you refinance.

3. Deductible Loan Points for Homebuyers

The points you pay at closing when you buy a home are deductible on your income tax statement for that year. If the seller paid some (or all) of your points for you, you may be able to deduct those seller-paid points.

4. No Income Taxes On Capital Gains
Thanks to the 1997 Tax Act, once every two years, single homeowners can realize a tax-exempt profit of up to $250,000 – as long as the seller owned and occupied the home as a principal residence during any two of the last five years. Married homeowners who file jointly on their tax returns do not have to pay taxes on up to $500,000 of gain when they sell their primary residence.

5. Home Improvements

Although you can’t deduct the expenses associated with home improvements, keep in mind that making improvements to your home may increase the purchase price of your home. Keeping all of your receipts from home improvements may help you prove your homes worth at resale and reduce the potential taxable gain when selling your home.

6. Real Estate and Property Taxes
State and local property taxes can be deducted as an expense against income, however the real estate taxes are only deductible in the year they are actually paid to the government.

7. Home Office
If you have a qualified office in your home, you may be able to deduct costs associated with maintaining the portion of your home exclusively used for business. For example, 100% of your expenses related to the office such as painting and upkeep are deductible, as well as a portion of indirect expenses such as the cost of utilities and garbage pickup.

8. Limited Moving Expense
Homeowners who have recently relocated for work may be able to write off the cost of moving themselves, their household goods, their vehicles, and other reasonable costs associated with the move. Restrictions do apply. For instance the new job must be 50 or more miles farther from the old home than was the old job.

9. Health Related Improvements
Any home improvements for medical purposes can be deducted entirely from your taxes as long as the improvements do not add to the overall value of the home and are for a chronically ill or disabled person. If you qualify, you may be able to deduct a portion of expenses such as a swimming pool for treating polio victims or an air conditioner to alleviate a specific medical condition.

10. Vacation Homes
Owning a vacation home has more benefits than you may think. You can deduct some of the costs associated with owning a vacation home, such as real estate taxes, personal property taxes, mortgage interest, and points.

back to top

 

What if I have other questions? 

Please Contact Us for further information.

back to top