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3 comments

I closed loan with bank of america using Naca as mortgage broker.

I wanted to give my views so people can make an educated choice.

Advantages:

1. Closing costs paid by lender ( Appraisal + Attorney fee+ Title insurance+ Survey - These are paid by Lender)

2. No PMI with no down payment - could not find it anywhere else

3. Interest rate buy down - 1 point (1% of loan amount) reduces your interest rate by 0.25% for 30 year loan and 0.5% for 15 year loan. This one is big for me. I could not reduce my interest rate more than 1 point with other lenders and others could not match naca interest rate.

Cons:

1. Naca mortgage consultants are bottleneck as they do not pick up phones or answer Emails some times 3 business days or more. There is no SLA. You need to keep calling Naca member services, Naca office manager or regional director, walk into naca office and keep escalating or reach out for suggestions on naca forums.

2. Closing takes more time with all back and forth compared regular lender. Prepare for atleast 60 days to close.

3. Naca second lien of $25K to ensure you occupy the house and volunteer for naca.

Summary: If you want to save money on closing cost and pmi (>$10k) and get a lower interest rate naca is the best program. You need a lot of patience, persistence but you will be happy in the end if it works for you Happy .

Product or Service Mentioned: Naca Mortgage.

Reason of review: Lower interest rate and saved on closing costs.

NACA Pros: No mortgage insurance, No closing costs, Lower interest rate.

NACA Cons: No sla, Longer wait times for getting response to emails or phone calls.

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Anonymous
#1644383

I have a friend going through the process and as a home owner who has owned and sold x4 in my lifetime with traditional mortgage products (always obtained through a broker), I am confused why the buy-down rate is viewed as a plus. ANY lender will offer you points (same process, same %), and there is pure math equation there to determine its value .

If you purchase a home for $200K and use your downpayment to instead buy down your interest rate (NACA) and your neighbor who has decent credit with a mortgage broker who shops around for a solid interest rate puts down $40K on the $200K house, well, on day one, you are $200K in arrears and he is $160K in arrears. Somewhere down the road - 15 or so years in - you, on paper, will break even. But in that same 15 year period, your neighbor who simply by the fact he has equity, has had opportunity you have not. Your neighbor only had to pay an additional mortgage payment every year (which is lopped right off the principle) to continue to stay ahead of the game.

Life happens. Are you 100% certain you will stay in that home and continue to own it during that period? Because if you do not, you have tossed away your point money. I get that NACA helps people who otherwise have *** credit AND no down payment come up with a plan (over a period of year+) to be able to purchase a home, but so won't a credit counselor - for FREE.

NACA may not be a "for profit", but neither is a credit union and a million other companies. People who run NACA make huge salaries. And depending on which RE market you are in, you risk losing out on a good housing deal because NACA buyers cannot close quickly. Remember, NACA isn't your lender.

Your real lendeer will run a final number/credit view before the underwriter signs off on your loan, and if there is anything - any change which NACA promised would not be an issue (or missed), you have lost your purchase. PMI?

Please. You can have your house re-appraised in 2 years and its value will have increased enough to eliminate it, especially since the traditional lender requires a down payment so you (unlike the NACA buyer) have equity in your house from day one.

Anonymous
to Traditional #1715043

Thanks this was great information.

Anonymous
#1629191

very helpful

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