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New Fed Mortgage recently acquired Commonwealth Mortgage, which is branded as a division of New Fed Mortgage Corp. Commonwealth Mortgage offers a “best rate” guarantee program: Applicants may receive $500 if they find a better mortgage deal elsewhere.
At the time of this review, the Commonwealth Mortgage website was very limited with information on products, rates, and fees. When we spoke to a Commonwealth representative, they informed us the company is the same as New Fed Mortgage and could only provide details on New Fed loan products.
With that, New Fed Mortgage is a mortgage lender based in Massachusetts and was founded in 2000. The lender offers home loans in 15 states across the country. In 2017, it was voted 2017’s best mortgage company in Massachusetts by Banker & Tradesman newspaper.
Borrowers will find several types of mortgage options at At Commonwealth and New Fed — including conventional, jumbo, and government-backed loans — whether they’re looking to purchase a home or refinance an existing mortgage. Here’s what to know about Commonwealth and New Fed Mortgages before applying for a home loan.
Pros and Cons of Commonwealth Mortgage, a Division of New Fed Mortgage Corporation
Offers conventional and jumbo mortgages, along with renovation and construction loans
Only available in 15 states: Connecticut, Florida, Illinois, Maine, Maryland, Massachusetts, Michigan, Mississippi, New Hampshire, New Jersey, North Carolina, Pennsylvania, Rhode Island, Tennessee, Virginia
Can’t get rate quote or closing cost estimate unless you fill out a long-form mortgage application and agree to a hard credit pull
Branch access limited to Massachusetts and New Hampshire
Limited website functionality
Commonwealth Mortgage, a Division of New Fed Mortgage Corporation: Loan Types and Products
Commonwealth and New Fed Mortgage have several loan options for homebuyers looking to make a purchase or homeowners looking to refinance an existing mortgage. Borrowers are out of luck if they need more niche options, such as home equity loans, home equity lines of credit, or construction loans.
At the time of this review, the Commonwealth Mortgage website was very limited with information on products, rates, and fees. A Commonwealth representative told us that the company is the same as New Fed Mortgage and couldn’t provide further details on products. But here’s what you’ll find on New Fed’s mortgage lineup right now:
- Conventional loans
- Federal Housing Administration (FHA) loans
- Department of Veterans Affairs (VA) loans
- U.S. Department of Agriculture (USDA) loans
- Refinance loans
- Fixed-rate loans
- Adjustable-rate loans
- Construction loans
- FHA 203(k) renovation loans
Commonwealth Mortgage, a Division of New Fed Mortgage Corporation: Transparency
Commonwealth’s website is limited to a contact form only. The New Fed’s main website is not intuitive either. It mainly provides contact information, a long-form mortgage application, and a portal for making your mortgage payment. It doesn’t link to the New Fed Mortgage Loan Center, which contains more information about New Fed but offers a clunky user experience. At the Loan Center, you’ll find details about mortgages at New Fed, a borrower checklist, glossary terms, guides on the homebuying process, and mortgage calculators.
But you’ll still need to submit a long-form online mortgage application or call the New Fed office and leave a message before you can go over your borrowing options. A loan officer will need to perform a hard credit pull before providing a mortgage rate quote and a closing cost worksheet.
This experience is a major departure from other lenders, many of which offer easy-to-navigate websites, a streamlined communication process, and rate quotes using a quick online form and soft credit pull, which won’t hurt your credit (unlike a hard credit pull, which can have a temporary but negative impact on your credit score).
Commonwealth Mortgage, a Division of New Fed Mortgage Corporation: Rates and Fees
Commonwealth and New Fed Mortgage says it doesn’t provide customized mortgage rate quotes or information about closing costs until the borrower fills out an official mortgage application and agrees to a hard credit pull. The lender also doesn’t advertise interest rates on any of its loans, so you won’t be able to comparison shop until you’re ready to fill out a mortgage application.
To qualify for a mortgage with Commonwealth or New Fed, you’ll need a credit score of at least 580 for an FHA loan or a 620 for a conventional loan. However, a higher score may help you get a lower mortgage rate.
If you decide to apply, ask about any closing costs you’ll pay and compare them to what you’d pay with other lenders. Here are some of the typical fees homebuyers pay when taking out a mortgage:
- Lender origination fee
- Appraisal fee
- Credit report fee
- Title insurance fees
- Recording fees
- Escrow deposit
- Prepaid interest
- Optional mortgage points
- Late fees
New Fed doesn’t charge prepayment penalties — which are fees for paying down your mortgage ahead of schedule — on any of its loans. Borrowers may lock in a mortgage rate for free, but they may have to pay to extend the lock if the borrower causes closing delays.
Refinancing With Commonwealth Mortgage, a Division of New Fed Mortgage Corporation
If you have an existing mortgage, you can refinance your home loan to better fit your financial goals. New Fed offers two refinance options:
- Rate-and-term refinance, where you take out a new loan and get a new loan term, interest rate, or both. Homeowners usually do this to lower their monthly mortgage payments, remove private mortgage insurance, or speed up their payoff timeline.
- Cash-out refinance, which allows you to take out a mortgage for more than you owe, pay down your current mortgage, and pocket the difference (minus closing costs). You’ll then repay the new, larger loan over time and can use the cash for any type of expense.
Commonwealth Mortgage, a Division of New Fed Mortgage Corporation Compared to Mortgage Lenders
|Commonwealth and New Fed Mortgage||Ally Home||New American Funding|
|Minimum credit score||580 for FHA; 620 for conventional||620 for conforming; 700 for jumbo||580|
|Minimum down payment||0% to 3.5%, depending on the loan program||3% for conventional; 5% for conforming; up to 20% for jumbo loans||0% to 5%, depending on the mortgage program|
|Where does the lender operate?||15 states||37 states and Washington, D.C.||Washington, D.C., and all states except New York and Hawaii|
|Major loan types||Conventional, jumbo, VA, FHA, USDA, renovation loans, adjustable-rate, fixed-rate, refinance, cash-out refinance, construction loans||Conventional, jumbo, adjustable-rate, fixed-rate, refinance, cash-out refinance||Conventional, jumbo, VA, FHA, USDA, renovation loans, adjustable-rate, fixed-rate, refinance, cash-out refinance, reverse mortgages, home equity lines of credit|
How to Shop Around to Get the Best Mortgage Rate
Before you start shopping for a home, it’s best to start with a mortgage pre-approval. The pre-approval helps you define your budget and support your purchase offer. But you’re not locked in with that lender, so you can check out others when you’re ready to apply for a home loan.
Shopping around can help you compare offers and potentially save thousands of dollars in interest and fees over the life of the loan. Start by gathering rate quotes from multiple mortgage lenders. Then, compare the interest rate and closing costs, and use an online mortgage calculator to help you figure out how much you’d spend on interest with each option.
Take a look at one example: Let’s say you receive two mortgage rate quotes on a home worth $200,000 with a 20% down payment and 30-year term.
|INTEREST RATE||MONTHLY INTEREST AND PRINCIPAL PAYMENT||INTEREST SAVED OVER LOAN TERM|
With a 3.25% interest rate, the monthly principal and interest payment comes out to $696. But with a 3.1% interest rate, you save $13 a month on interest costs. That might not sound like much, but it adds up to $4,680 in savings over 30 years.
Commonwealth and New Fed Mortgage has a wide loan selection, but it’s only available in 15 states across the U.S. We struggled with the user experience. You also won’t be able to get a quote on closing costs and your interest rate until you’re ready to apply for a mortgage, so it can be hard to gauge whether the lender is affordable to you. If you live within the lender’s footprint and decide to apply, be sure you compare multiple lenders and request a Loan Estimate after applying. Use the Loan Estimate to compare your options and get the best deal.