NewDay USA Mortgage Review: A Mortgage Company Designed for Veterans

Posted on April 29th, 2020
NewDay USA Mortgage Review: A Mortgage Company Designed for Veterans

Today we’ll review NewDay USA, a mortgage lender that is geared specifically toward veterans and active duty military.

Like other mortgage companies, they offer both home purchase loans and refinance loans, but only those backed by the United States Department of Veterans Affairs (VA) and the Federal Housing Administration (FHA).

Let’s discover more about this company, whose goal is to become one of the largest VA lenders in the country.

NewDay USA Quick Facts

  • Top-10 VA mortgage lender headquartered in Fulton, Maryland
  • Founded in 1998 by current CEO Rob Posner
  • Direct-to-consumer company offering VA loans and FHA loans
  • A Ginnie Mae (GNMA) approved issuer/servicer
  • Licensed to lend in 43 states and the District of Columbia
  • Originated around $2.5 billion in 2019

How to Apply with NewDay USA

NewDay USA is a direct-to-consumer mortgage lender. This means you work directly with a loan officer at their company to obtain your mortgage.

To get started, you fill out what amounts to a lead form and then a loan officer will contact you to go over your options and eligibility.

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You enter basic information including the type of loan you’re looking for, property type, estimated home value, property address, name, and contact info.

It’s also possible to call the company directly or fill out a much shorter contact form if you’re interested in getting a loan.

Unfortunately, they don’t seem to offer the ability to apply for a home loan directly on their website.

So you will need to speak with a human being to get the ball rolling.

In terms of whether they offer a digital mortgage process, that’s unclear.

They don’t really talk about the loan process on their website, but I assume you have the ability to upload documents and complete most items online.

NewDay USA’s SafeClose

Just this month NewDay launched “SafeClose,” a new process where customers can sign their mortgage closing documents without a notary agent entering their home.

This initiative is part of their effort to continue lending during the coronavirus epidemic, and adheres to the CDC’s social distancing guidelines.

How it works is pretty simple.

First, loan documents are reviewed by the borrower and signed electronically using the applicant’s home computer.

Next, five key loan documents that must be signed in the presence of a notary are physically delivered to the customer’s front door for signature.

The notary observes the customer signing the documents from a safe distance, then verifies and notarizes them so the loan can fund.

What Types of Loans Does NewDay USA Offer?

  • Primarily offer VA loans and some FHA loans
  • Can get a home purchase loan with zero down
  • Or a refinance loan including streamline or cash out
  • Fixed-rate mortgages only with either 30-year or 15-year term

As noted, NewDay USA is a veteran-focused home loan lender, meaning they specialize in VA loans.

If you’re unaware, it’s possible to purchase a home with zero money down when utilizing a VA loan, a great benefit for veterans that isn’t available to others.

Aside from home purchase loans, NewDay USA also offers home refinance loans, including a cash out refinance up to 100% of the home’s value.

Many lenders limit VA cash out refinance to 90%, so this is a unique program offered by NewDay USA.

They also offer a “Rate Reduction Loan,” otherwise known as a VA streamline refinance, which doesn’t require a home appraisal or income verification.

It allows you to lower your mortgage rate if you already have a VA loan, and closing costs can be financed into the loan amount so nothing is paid out-of-pocket.

The company also appears to offer FHA loans, though these might be a secondary offering if you don’t qualify for a VA loan for some reason.

They do not offer conventional loans, such as those backed by Fannie Mae or Freddie Mac, nor do they offer home equity lines/loans.

In 2019, their product mix consisted of 97% VA loans and 3% FHA loans. With regard to loan purpose, 90% were cash out refis, 6% were purchases, and 4% were rate and term refinances.

NewDay USA only appears to offer fixed-rate mortgages, with the 30-year fixed commanding a 97% share.

The states of California and Florida account for nearly a quarter of their loan volume.

NewDay USA Cash Buyer Certificate and Operation Home

If you’re a veteran or servicemember looking to purchase a home, you can take advantage of the company’s so-called “Cash Buyer Certificate” and “Operation Home” initiative.

In short, they want as many veterans as possible to realize the American Dream of homeownership.

The first step is to contact NewDay USA for a Cash Buyer Certificate, which is essentially a mortgage pre-approval that shows home sellers you’re a qualified and serious home buyer.

But unlike some flimsy pre-qualification letters, it’s actually a full credit and income approval verified by a NewDay USA underwriter.

This gives applicants confidence that they’ll be able to close, and an edge relative to other buyers if the seller knows they mean business.

Next, they can connect you with a real estate agent that is veteran-focused, or possibly a veteran themselves, who understands fellow vets.

The agent and NewDay USA loan officer will guide you through the process from start to close.

NewDay USA Mortgage Rates

Like many other lenders, they do not openly advertise their mortgage rates on their website. As such, we have no idea where they stand competitively.

However, VA mortgage rates tend to be quite cheap relative to other loan types, so they’ll probably sound attractive regardless.

NewDay also doesn’t disclose their lender fees upfront, so it’s not clear if they charge an origination fee, or common lender fees like underwriting and processing.

So be sure to take the time to shop around with other mortgage lenders if you care about price. Pay attention to both the interest rate offered and the APR, which factors in the lender fees!

NewDay USA Mortgage Reviews

In terms of customer satisfaction, NewDay USA has a 4.6 out of 5-star rating with Trustpilot based on over 4,000 customer reviews.

Most of the reviews tend to point out that the loan process was very easy and fast, with one mentioning a quick digital process.

Some mention mortgage rates being lower than what their current lender could offer, or them being the “best” or “great.” So that might give us an idea of how competitive they are.

Haven’t seen much mention of lender fees in the reviews, so be sure to consider those, even if they are bundled into the loan amount and not paid out-of-pocket.

They also have a 4.25 rating out of 5 on ConsumerAffairs and an A+ rating with the Better Business Bureau, despite not being an accredited business.

The Pros and Cons of NewDay USA

The Good

  • Highly rated on Trustpilot and ConsumerAffairs review sites
  • Offer cash out refinances up to 100% of property value
  • Appear to close their loans quickly
  • May be more flexible in approval relative to other lenders
  • Tailored toward veterans and servicemembers
  • Cash Buyer Certificate offers full pre-approval for home shoppers

The Potential Bad

  • Only offer VA loans and FHA loans
  • Do not lend in MA, ND, NY, RI, UT, VT, or WV
  • Do not offer conventional home loan financing or equity loans/lines
  • Unable to apply for a home loan directly online
  • Do not advertise mortgage rates or lender fees

3 Comments

  1. Mark Cline July 21, 2020 at 1:25 pm -

    My talking to NewDay USA has been short and not so informative. My wife and I have a VA loan, have great credit, and meet all the criteria for a cash out refinance loan, but after filling out their computer process, we were left several days and phone calls to finally be told that cash out department wasn’t currently working or wasn’t available to us or anyone.

    What is going on with this company? The only response was that they lied to us about the cash out program. I am now talking to the Better Business Bureau!!

  2. Colin Robertson July 21, 2020 at 2:54 pm -

    Mark,

    Might be related to the entire industry staying away from cash out refis due to COVID-19. Not just NewDay USA, but they probably should have taken the time to explain that to you regardless.

  3. Robert Zannini July 24, 2020 at 11:57 am -

    I called NewDay several months ago when interest rates had lowered significantly. My intent to was try and re-finance with a lower interest rate. However, when I revealed that I had a conventional mortgage, I was told that they were not re-financing conventional mortgages at the time and possibly in several weeks that policy would change. My phone number was taken and told they would keep me posted on the policy. No phone calls and so much for the company for veterans. I gather that my situation just wasn’t profitable enough for NewDay.

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