What’s the first thing you do when you’re thinking about buying a home? If you’re like 44% of home buyers, you look online at the various properties for sale. Then, you might contact a real estate agent and do some research about the home buying process online.
The next step is, for many home buyers, contacting a mortgage lender or a bank. Applying for mortgages can be confusing, stressful, and overwhelming, so picking a company you feel comfortable working with is important.
One lender who offered competitive interest rates in 2020 was Newrez. They also stand out from the crowd because they offer non-qualified mortgages.
Should you apply for a mortgage from Newrez, or should you look elsewhere for your borrowing needs? Let’s take a look at what you need to know.
Newrez LLC: An Overview
Newrez LLC is a direct mortgage lender that was originally called New Penn Financial. They are a nationwide mortgage lender that has licenses in every U.S. state and Washington, D.C. Founded in 2008, Newrez offers both traditional loan products and flexible non-qualified mortgages (non-QM loans.)
There are more than 100 physical Newrez branch locations, but many people engage in the loan application process remotely. They state that they use a secured portal through which you can upload your documents. When it comes time to close on your new home, you can receive and sign your closing package and documents electronically.
Newrez Mortgage Rates
One of the drawbacks of applying for a home loan through Newrez is that they don’t share their current rates online. It’s worth shopping around for a lower mortgage rate, in general, because it can reduce your mortgage payments, help you get more house for your budget, and boost your buying power. Since mortgage interest rates vary between lenders, it is advised that you apply for loans from several different lenders and compare offers.
There are a number of factors that determine your mortgage interest rate, including:
- Credit scores
- Home location
- Down payment amount
- Home price and loan amount
- Interest rate type
- Loan term
- Loan type
(Are you wondering what you need to know about credit scores? You can learn more here.)
The average 30-year interest rate for Newrez mortgages in 2020 was about on par and even slightly lower than other big competitors. That being said, it’s important to understand that mortgage interest rates can vary quite a bit depending on the circumstance of the homeowner.
The average 30-year interest rate in 2020 from Newrez was 3.20%. This is equal to the average for Rocket Mortgage and lower than Wells Fargo.
Daily mortgage rates aren’t the only factor you’ll want to consider when comparing loan offers, though. You’ll also want to be considerate of other terms including the closing costs. When compared with Rocket Mortgage and Wells Fargo, the median origination fee for Newrez was about on par with Wells Fargo and quite a bit cheaper than Rocket Mortgage.
For 2020, the median total loan costs for Newrez was $3,890. This is higher than Wells Fargo, which had a median total loan cost of $3,370, and lower than Rocket Mortgage which came in at $4,610.
What Makes It Unique?
There are countless mortgage companies, credit unions, and banks that offer home loans to borrowers. However, not all of these lenders are willing to work with buyers who have non-standard applications.
What makes Newrez unique is that they offer specialized loan products in order to help accommodate buyers in addition to government-backed and conventional loans.
These non-qualified mortgages (non-QM) are intended to help people whose applications might get turned down at other financial institutions. These include people who:
- Are investing in real estate
- Are self-employed and are looking for a bank statement loan
- Have previous blemishes on their credit
These non-traditional, non-QM loans can help people use alternative documentation in order to verify their income. In some instances, these programs might also have flexibility when it comes to their credit guidelines.
Newrez also offers customizable loan terms in a way that is unique when compared to other lenders. It is common for lenders to offer loan terms for 15-, 20-, or 30- year home loans. With Newrez, though, borrowers can choose non-traditional term lengths such as 18, 23, or 27 years.
Additionally, Newrez has home loans for real estate investors and manufactured home loans.
Have Borrowers Had a Good Experience With Newrez?
All of the above might make you believe that applying for a Newrez mortgage might be a good choice for you. However, it’s worth learning from the experiences of other borrowers when choosing a lender.
Unfortunately, a first glimpse of the customer reviews for Newrez shows that people haven’t always had the best time working with this lender.
On LendingTree, Newrez scores 3 out of 5 stars. Based on the six reviews left on Trustpilot, the lender scored a 2.3 out of 5.
Who can make a judgment based on six reviews, though? Well, on the Beter Business Bureau website, 1,035 customer reviews result in a similar rating of 2.34 out of 5.
According to the BBB, there were 541 complaints filed against Newrez in the previous three years, 407 of which have been closed in the last year.
On WalletHub, Newrez has a slightly higher rating, scoring 3.6 stars out of 5 based on 3,275 reviews.
If you are looking for another major mortgage lender that offers loans in all 50 states, you might research whether getting a US Bank home mortgage is right for you. By comparison, their reviews are more favorable.
Is Newrez the Right Mortgage Lender For You?
If you are looking for competitive loan fees, a low-interest rate, and non-QM mortgage options, it’s worth taking a look at Newrez. For people who need to use alternative documents to verify their income, this might provide a solution.
That being said, it’s worth considering the customer feedback that exists online. When you are working with a mortgage lender, you want to know that they are there to help when you have a question or a concern. Based upon the many reviews that are online, borrowers have had a frustrating experience working with Newrez, to say the least.
Whether you are looking for information on mortgage lenders or the mortgaging process, we have a vast library of articles to help you find the information you’re looking for. Check out our other resources here.