New American Funding: 2024 Home Equity Review

Benefits

• With a New American Funding HELOC, you can borrow up to 85 percent of your combined loan-to-value (CLTV) ratio, up to $400,000.
• You’ll get a fixed rate on your initial draw. (For subsequent draws, however, that rate moves higher or lower based on prevailing market rates.) 

Drawbacks

• New American Funding requires HELOC borrowers to withdraw all of their equity funds at closing.
• The lender doesn’t work with HELOC borrowers in some states, including New York and Texas.

Home equity loan products offered

New American Funding offers HELOCs to borrowers in the majority of states (excluding Delaware, Hawaii, Kentucky, Maryland, New York, South Carolina, Texas and West Virginia). Depending on your home’s value and level of equity, you could take out up to $400,000 with this lender’s line of credit. However, unlike some other HELOC lenders, you’re required to draw all of these funds initially; you can then draw more as you repay. Your repayment period could last up to 20 years after the draw period.

With a New American Funding HELOC, you’ll get a fixed interest rate on the initial draw. If you borrow more during the draw period, you’ll pay whatever the prevailing market rate is at the time, which might be higher than the initial rate. The most competitive HELOC rates go to well-qualified borrowers who set up auto-pay.

You can only get a HELOC through New American Funding on your primary residence.

Types of fees charged

New American Funding charges a 4.99 percent origination fee on HELOCs, along with an appraisal and recording fee, depending on your location.

How to qualify for a HELOC with New American Funding

To qualify for a HELOC with New American Funding, you’ll need a credit score of at least 620 and at least 15 percent to 20 percent equity in your home. Like many types of home loans, the debt-to-income (DTI) ratio caps out at 43 percent. You’ll also need to have sufficient income and meet other eligibility criteria, such as having homeowners insurance.

How to apply with New American Funding

You can apply for a New American Funding HELOC on the lender’s dedicated HELOC website. The lender allows you to link your accounts in the online application, which can help speed up the process. New American Funding is also available by phone at 888-964-7404, Monday through Saturday, 9 a.m. to 8 p.m. ET.

How Bankrate scored New American Funding

• Methodology

  To determine a home equity lender's Bankrate Score, Bankrate rates lenders on a scale of one (1) to five (5) stars — with five (5) the highest rating — based on a variety of factors relating to the lender's products and services. To assign our ratings, we assessed each mortgage lender across three core areas:

  • Affordability: Annual percentage rate (APR) - 80%; introductory APR - 20%
  • Availability: Licensing - 50%; credit score - 20%; loan minimum - 10%; draw requirement - 10%; loan products - 10% 
  • Borrower experience: Rate transparency - 45%; convenience - 35%; customer service - 10%; fixed-rate options - 10%

  Learn more about our methodology.