Newrez Mortgage Review: An Online Lender With Some Unique Loan Products

Newrez is an online mortgage lender that could be a solid choice for many buyers, especially borrowers who qualify for a government-backed loan and investors. Newrez Mortgage offers conventional, VA, and FHA loans, but also offers mortgages for non-owner occupied properties and investment properties. Read our full review to find out if Newrez Mortgage might be right for you.

This mortgage lender is a good fit for: Borrowers who want a streamlined online process, especially if they are self-employed or have adverse items on their credit.

Top perks

Online process

Newrez Mortgage offers an online mortgage platform while also making it easy for borrowers to get personal assistance from a mortgage professional. For example, borrowers can get a custom rate quote by starting an application online or by calling Newrez and speaking directly to a loan officer.

Excellent educational resources

Newrez Mortgage's website has an impressive collection of educational resources that can help borrowers learn about interest rates, mortgage types, and the application process.

Several loan types

Newrez Mortgage offers conventional mortgages in both fixed- and adjustable-rate forms, as well as VA, USDA, home equity, and FHA loans.

Newrez Mortgage also offers refinancing loans, in both rate-and-term refinancing and cash-out refinancing forms.

On-time closing guarantee

If a loan doesn't close by the contract closing date due to the fault of Newrez, the company will pay the borrower the amount of their earnest money deposit, up to $5,000. The offer only applies to borrowers with credit scores of 700 or higher, and homes with at least 30 days from the purchase contract to the closing date.

Niche and specialty loans

This is the biggest differentiator between Newrez Mortgage and its competitors. The lender offers a line of non-qualified mortgage (non-QM) types known as its Smart Series that help borrowers who don't qualify for traditional mortgage types to obtain financing.

First, the SmartEdge loan product offers mortgages to borrowers with recent adverse credit events (but who still have relatively high credit scores). These loans can be made for as much as $3 million to borrowers with credit scores of 660 or higher and debt-to-income ratios of up to 50%.

Next, the SmartSelf loan is designed for self-employed borrowers that may have difficulty documenting their income through traditional methods. Borrowers can qualify with no tax returns with a minimum 660 credit score, by using their bank statements to qualify.

Finally, the SmartVest loan is the company's investment property loan and bases financing on the property's cash flow, or the borrower's equity in other properties.

It's also worth noting that Newrez Mortgage offers a 40-year fixed-rate term with interest-only payments for the first 10 years, available on all three types of Smart Series loans. This is designed to help borrowers keep their monthly payments as low as possible in response to rising interest rates and home prices.

Nationwide availability

Newrez Mortgage is licensed to originate mortgages in all 50 states and Washington D.C. Many online lenders cannot operate in all states, so this is a nice advantage.

What could be improved

Rates not available online

Many mortgage lenders, especially those that primarily operate online, publish a schedule of their current interest rates. However, Newrez doesn't make its current rates available online -- the only way for borrowers to see what the company's interest rates are is to fill out an application.

Fee information is tough to find

It isn't just interest rates that aren't disclosed on Newrez's website, it doesn't list its origination fees or average closing costs. Multiple sources indicate that Newrez Mortgage's fee structure is on par with the industry average, but transparency of rates and fees would help improve the customer experience.

Home equity loan, but no HELOCs

Newrez Mortgage doesn't offer home equity lines of credit (HELOCs). Homeowners who want to borrow against their equity would need to pursue a home equity loan or a cash-out refinance mortgage.

The main difference between a HELOC and a home equity loan is that with a HELOC, you can borrow as needed, up to your limit. With a home equity loan, you have to take the loan in one lump sum. A cash-out refinance replaces your current mortgage.

Newrez Mortgage's home equity loans are available for $50,000 to $350,000 to borrowers who have sufficient home equity.

The qualification process depends on the type of mortgage you want to apply for. Newrez Mortgage doesn't publish minimum credit score requirements for its loans, but it does confirm that VA loans are available with no down payment and FHA loans have a 3.5% down payment requirement. Standard credit score requirements are 620 for a conventional mortgage or 580 for a FHA loan.

Newrez Mortgage's non-QM mortgages have more flexible guidelines that might appeal to you. For example, some of these accept debt-to-income ratios as high as 50%, while conventional loans cap DTI at 48-49%. The DTI for USDA loans is capped at around 44%, and FHA loans typically require a DTI of less than 43%.

Unlike many other mortgage companies, Newrez Mortgage doesn't publish its current rates online. However, according to public records, Newrez Mortgage's rates are about the same as the national average, and its total loan costs and origination fees are also on par with what you can expect to pay at other lenders. For context, take a look at current mortgage refinance rates among other lenders.

Newrez Mortgage doesn't publish its current mortgage rates online. According to numerous sources, Newrez Mortgage's rates are about the same as the national average, and its total loan costs and origination fees are similar to what you can expect to pay at other lenders. According to mortgage consumer advocate site MortgageWaldo.com, Newrez's typical closing costs are $149 less than the national average.

Check out current mortgage rates from similar lenders to get an idea of where Newrez might stand.

Newrez Mortgage is a solid online mortgage lender that is worth a look if you're considering a conventional, VA, or FHA loan. And it can be an especially good option for self-employed borrowers and those whose credit history is outside of the realm of traditional mortgage approval.