2021 Commonwealth Mortgage Lender Review

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New Fed Mortgage recently acquired Commonwealth Mortgage, which is a division of New Fed Mortgage Corp. Commonwealth Mortgage offers a “best rate” guarantee program: applicants can 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 representative from the Commonwealth, they informed us that the company is the same as New Fed Mortgage and could only provide details on New Fed loan products.

With this, New Fed Mortgage is a Massachusetts based mortgage lender founded in 2000. The lender offers home loans in 15 states across the country. In 2017, it was voted the best mortgage company in Massachusetts in 2017 by the Banker & Tradesman newspaper.

Borrowers will find several types of mortgage options at Commonwealth and New Fed, including conventional, jumbo, and government guaranteed loans, whether they are looking to buy 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

The inconvenients

  • Only available in 15 states: Connecticut, Florida, Illinois, Maine, Maryland, Massachusetts, Michigan, Mississippi, New Hampshire, New Jersey, North Carolina, Pennsylvania, Rhode Island, Tennessee, Virginia

  • Cannot get a quote or estimate for closing costs unless you complete a detailed mortgage application form and accept a firm credit application

  • Limited branch access in Massachusetts and New Hampshire

  • Limited website functionality

Commonwealth Mortgage, a division of the New Fed Mortgage Corporation: loan types and products

Commonwealth and New Fed Mortgage have several loan options for home buyers 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 could not provide more product details. But here’s what you’ll find on the New Fed’s mortgage lineup right now:

Commonwealth Mortgage, a division of the New Fed Mortgage Corporation: Transparency

The Commonwealth website is limited to a contact form only. The New Fed’s main website isn’t intuitive either. It mainly provides contact information, a detailed mortgage application form and a portal to make your mortgage payment. It is not related to the New Fed Mortgage Loan Center, which has more information about New Fed but offers a clunky user experience. At the Loan Center, you’ll find details on New Fed mortgages, a checklist for borrowers, glossary terms, guides on the home buying process, and mortgage calculators.

But you’ll still need to submit a detailed online mortgage application or call the New Fed office and leave a message before you can review your borrowing options. A loan officer will need to perform a credit analysis before providing a mortgage rate quote and closing cost worksheet.

This experience is a major change from other lenders, many of which offer easy-to-navigate websites, a streamlined communication process, and quotes using a quick online form and flexible credit, which will not harm your credit (unlike credit, which can have a temporary but negative impact on your credit score).

Commonwealth Mortgage, a division of the New Fed Mortgage Corporation: rates and fees

Commonwealth and New Fed Mortgage claims that it does not provide personalized mortgage quotes or closing cost information until the borrower has completed a formal mortgage application and accepted a firm credit application. The lender also doesn’t advertise interest rates on any of their loans, so you won’t be able to compare prices until you’re ready to complete a mortgage application.

To qualify for a mortgage with Commonwealth or New Fed, you will need a credit score of at least 580 for an FHA loan or 620 for a conventional loan. However, a higher score can help you get a lower mortgage rate.

If you do decide to apply, find out what closing costs you will pay and compare them to what you would pay with other lenders. Here are some of the typical fees homebuyers pay when they take out a mortgage:

  • Lender origination fees
  • Assessment fees
  • Credit file fees
  • Title insurance costs
  • Registration fees
  • Escrow deposit
  • Prepaid interest
  • Optional mortgage points
  • Late fee

The new Fed doesn’t charge prepayment penalties – which are fees for paying off your mortgage before maturity – on any of its loans. Borrowers can freeze a mortgage rate for free, but they may have to pay to extend the freeze if the borrower delays closing.

Refinancing with Commonwealth Mortgage, a division of the New Fed Mortgage Corporation

If you already have a mortgage, you can refinance your home loan to better suit your financial goals. The new Fed offers two refinancing options:

  • Rate and term refinancing, where you take out a new loan and get a new loan term, a new interest rate, or both. Homeowners typically do this to reduce their monthly mortgage payments, remove private mortgage insurance, or speed up their repayment schedule.
  • Refinancing of collection, that allows you to take out a mortgage that’s more than you owe, pay off your current mortgage, and pocket the difference (less closing costs). You will then pay off the new, larger loan over time and be able to use the money for any kind of expense.

Commonwealth Mortgage, a division of the new Fed Mortgage Corporation in relation to mortgage lenders

Commonwealth and New Fed Mortgage Ally at home New American funding
Minimum credit score 580 for the FHA; 620 for conventional 620 to comply; 700 for jumbo 580
Minimum deposit 0% to 3.5%, depending on the loan program 3% for conventional; 5% for compliance; 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, DC Washington, DC and all states except New York and Hawaii
Main types of loans Conventional, jumbo, VA, FHA, USDA, renovation loans, adjustable rate, fixed rate, refinancing, cash-out refinancing, construction loans Conventional, jumbo, adjustable rate, fixed rate, refinancing, cash-out refinancing Conventional, Jumbo, VA, FHA, USDA, Home Improvement Loans, Variable Rate, Fixed Rate, Refinance, Refinance With Withdrawal, Reverse Mortgages, Home Equity Lines of Credit

How To Shop For The Best Mortgage Rate

Before you start shopping for a home, it’s best to start with a mortgage pre-approval. Pre-approval helps you set your budget and substantiate your offer to purchase. But you are not tied to that lender, so you can consult with others when you are ready to apply for a home loan.

Shopping can help you compare offers and potentially save thousands of dollars in interest and fees over the life of the loan. Start by collecting quotes from several mortgage lenders. Then compare the interest rate and closing costs, and use an online mortgage calculator to help you figure out how much you would spend on interest with each option.

Take a look at an example: Let’s say you receive two mortgage rate quotes for a home worth $ 200,000 with a 20% down payment and a 30-year term.

INTEREST RATE MONTHLY INTEREST AND PAYMENT OF THE PRINCIPAL INTEREST SAVED OVER THE TERM OF THE LOAN
3.25% $ 696
3.1% $ 683 $ 4,680

With an interest rate of 3.25%, the monthly principal and interest payment is $ 696. But with an interest rate of 3.1%, you save $ 13 per month on interest charges. It may not seem like much, but it represents savings of $ 4,680 over 30 years.

Final result

Commonwealth and New Fed Mortgage offers a wide selection of loans, but it is only available in 15 states in the United States. 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 difficult to determine if the lender is affordable for you. If you live in the lender’s footprint and decide to apply, be sure to compare multiple lenders and ask for a loan estimate after applying. Use the loan estimate to compare your options and get the best deal.

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