Frequently Asked Questions
Your residential mortgage escrow account is used to collect and disperse funds required to cover homeowner’s insurance, property taxes, and private mortgage insurance expenses.
Your monthly mortgage payment includes extra funds to pay for your annual insurance and property tax expenses. These funds are deposited into your escrow account and periodically withdrawn, by Centennial Lending, to pay these expenses. Your escrow account balance changes as these deposits and withdrawals occur, but must not drop below a federally mandated amount. The amount required to keep your escrow account adequately funded is dependent on
the actual amount of these expenses and directly impacts the amount of your monthly mortgage payment. In most cases your monthly mortgage payment will increase over time to cover the future “shortage” caused by rising insurance and property tax expenses.
Unfortunately, the amount required to cover future expenses is impossible to predict as the information is not available when Centennial Lending adjusts your monthly mortgage payment. Centennial Lending uses the actual expense amount from the previous year to determine the amount required to keep your escrow account adequately funded, but this often results in an escrow funds “deficit” at the end of each year as the property taxes and insurance expenses increase
The unpredictability of these expenses impacts your monthly mortgage payment in two ways:
- Deficit: The funds required to cover the deficiency from the previous year plus any additional funds required to maintain the federally mandated funding level. Deficits can be paid in a lump sum or broken up and included in your new monthly payment. Paying a lump sum reduces the increase in your new monthly mortgage payment.
- Shortage: The funds required to cover the estimated future cost of insurance and property tax expenses. This amount is automatically added
to your new monthly mortgage payment resulting in an increased payment amount.
This statement describes the amount paid into and out of your escrow account to cover your homeowner’s insurance and property tax expense during the past year. It also projects how much will need to be paid out in the coming year.
This notice describes the escrow funds “shortage” from the previous year, the amount required to cover the projected future “deficit”, as well as a new monthly mortgage payment. The new monthly mortgage payment may be one of two options depending on how the “shortage” from the previous year is paid.
In the event you have a fixed rate mortgage any increase in your monthly mortgage payment is the direct result of an increase in your property taxes and/or property insurance. While we are happy to help explain these changes, we do not have the ability to impact these costs or the amount of money required to fund your escrow account.
Your escrow account is analyzed once per year at which time the amount of required escrow funds is likely to change.
Your payment changes even when the previous year “deficit” is paid in a lump sum because the amount needed in the account to cover the future “shortage” caused by increasing expenses.
Increases in homeowner’s insurance and/or property taxes are unpredictable. While Centennial Lending knows these expenses are likely to increase, escrow fund requirements must be based on actual information from the previous year.
The best way to avoid an escrow funds shortage is to keep track of your homeowner’s insurance premium and your property tax bill. Compare the actual expenses against the projected amount on your Annual Escrow Account Disclosure Statement and adjust your monthly mortgage payment accordingly.
Some expenses come due in the middle of the computation/analysis cycle. When this happens, the “projected” amount to be paid changes to the “actual” amount disbursed.
Property taxes are paid according to the tax district in which your property resides and may be paid quarterly, semi-annually or annually. In the event that Centennial Lending is escrowing for your taxes, we will make sure that your property taxes are paid on time.
Homeowner’s insurance premiums are generally paid once or twice a year. You can log into your online account and review the “escrow” or “history” tab to see when your premiums were paid.
You can log into your online account and click on the “escrow” tab. From here you will be able to see when bills are due and when they have been paid. You can also look at your “history” to see when these items we paid.
In most situations, you will contact your insurance company to file a claim. The insurance company will usually ask that you obtain a quote from a contractor to repair any damage. The contractor will provide an estimate of costs to the insurance company. Once the insurance company approves the scope of work and the costs, they will issue a check for a portion of the cost. Once all work has been satisfactorily completed, the insurance company will issue a check for the remainder.
The insurance check will be payable to you, as the owner, as well as any lien holder(s) listed on the insurance policy. You will need to get the check endorsed by any (and all) lien holder(s).
For smaller projects, Centennial Lending may be able to endorse the insurance check and allow you to pay your contractor directly, documents will still need to be obtained.
For most projects, including those projects with a larger scope, guidelines require that we hold the funds in an escrow account on your loan and make periodic payments to you as work is being completed. The disbursements would be payable to you and the contractor.
In order to open the escrow account for the insurance claim we will need the following items:
- Endorsed check(s)
- Copy of the insurance claim (all pages provided by insurance company)
- Signed copy of the contract(s), from the licensed contractor of your choice, including an itemized list of work to be completed.
Centennial Lending will only release funds from your escrow account with written authorization from you, combined with a bill. We pay you or you and the contractor directly, ensuring you do not end up with unpaid liens on your most valuable asset.
- Project Completion: Once all work has been completed to your satisfaction, we ask that you please confirm the work has been completed and provide the final bill from the contractor. The final bill should include the full estimate less any payments or deposits made.
- Inspection: Centennial Lending will send an independent third-party to confirm completion of work in accordance with insurance adjuster breakdown. Centennial Lending pays the $40 cost of inspection.
- Final Payment: After Centennial Lending confirms completion of the work, a final check will be paid to you and or you and the contractor.
- Left-over funds: Should funds be left-over after all work has been completed, the funds will be returned to you as long as the loan is current.
This is a big question and difficult to answer in an FAQ. There are myriad options and it can be difficult to determine which is suited to your need. The best way to decide which loan is best for you is to speak to a qualified and trusted expert. The Centennial Lending team is uniquely positioned to help you answer this question. We have the expertise and relationships to ensure that your individual needs are met.
Generally speaking, interest rates fluctuate for a number of reasons, including the overall state of the economy, inflation and monetary policy. Your specific rate will be affected by these factors as well as the strength of your file. Considerations include your credit history, loan type, and the terms of your loan.
You can use the APR as a guideline to shop for loans but you should not depend solely on the APR in choosing the loan program that’s best for you.
The Federal Truth in Lending law requires that all financial institutions disclose the APR when advertising a rate. The APR is designed to present the actual cost of obtaining financing, by requiring that some, but not all, closing fees are included in the APR calculation. These fees in addition to the interest rate determine the estimated cost of financing over the full term of the loan. Since most people do not keep the mortgage for the entire loan term, it may be misleading to spread the effect of some of these up front costs over the entire loan term.
Unfortunately, the APR doesn’t include all the closing fees and lenders are allowed to interpret which fees they include. Fees for things like appraisals, title work, and document preparation are not included even though you’ll probably have to pay them. For adjustable rate mortgages, the APR can be even more confusing. Since no one knows exactly what market conditions will be in the future, assumptions must be made regarding future rate adjustments.
Look at total fees, possible rate adjustments in the future if you’re comparing adjustable rate mortgages, and consider the length of time that you plan on having the mortgage. Don’t forget that the APR is an effective interest rate–not the actual interest rate. Your monthly payments will be based on the actual interest rate, the amount you borrow, and the term of your loan.
An adjustable rate mortgage, or an “ARM” as they are commonly called, is a loan type that offers a lower initial interest rate than most fixed rate loans. The trade-off is that the interest rate can change periodically, usually in relation to an index, and the monthly payment will go up or down accordingly. You essentially get a lower initial rate in exchange for assuming additional risk down the road.
While many borrowers are skeptical of adjustable rate mortgages an “ARM” might be the right solution for you depending on your specific needs.
FHA loans are mortgages issued by government-approved lenders and insured and administered by the U.S. Department of Housing and Urban Development HUD. FHA mortgage loans generally require less of a down payment and have less stringent qualification requirements than conventional loans. Any borrower of legal age is eligible to apply for an FHA mortgage loan regardless of income level, including non-U.S. citizens. However, FHA does limit the maximum amount an individual can borrow under this program based on the location of the property.
The easiest way to pay your mortgage down quickly is to make additional principal payments. Even modest principal payments in addition to your normal monthly payment can take years off of your loan.
Refinancing may also provide an opportunity to pay your mortgage off more quickly. You may be able to shorten the term of your loan which is likely to increase your monthly payment while reducing the amount of total interest paid, or you may be able to lower your interest rate which may decrease your required monthly payment and allow you to make additional principal payments. In any event, it is important that you discuss your goals with a trusted expert and consider the costs of refinancing before proceeding.
You can utilize the calculators following this FAQ to calculate the impact of additional principal payments, shortening your term or refinancing to a lower rate. And as always, our team is here during normal business hours to answers your questions.
Absolutely! Our services are available to all consumers. Some products may require that you become a member of one of our partner credit unions but the process is generally integrated into the standard loan process.
Centennial Lending mails your secure password as soon as your loan closes. You will need this password to login but may change it any time after your initial login.
Logging in is as easy as clicking on your loan type:
Please contact us if you have not received your secure password or if you have additional questions or concerns. You can reach us any time during normal business hours by calling 720-494-2740.
The easiest way to make your payment is through a recurring ACH transaction. This option utilizes your bank account number and routing number to automatically draw payments from the account you designate. You can establish a recurring ACH payment by completing the authorization form at the time of your loan closing or anytime thereafter by contacting Centennial Lending.
You may also schedule a one-time ACH payment by logging into your Centennial Lending account.
In the event that you have an auto lease or residential mortgage and do not wish to establish a recurring payment you will receive a payment coupon book which you can use to make your payments by mail. Commercial borrowers will not receive coupons but will receive a monthly billing statement.
Online Bill Pay
All borrowers can utilize their primary financial institution’s online bill pay system.
All of our borrowers are welcome to drop off their payment in person.
The simplest way to update your contact information is by logging into your online account. You will need your account number and password in order to login. Click on your loan type below to begin.
Once logged in click on the “Contact” button in the top menu. Select your preferred method of receiving a confirmation, include your updated contact information in the text box, and click submit. We will update your contact information provide a confirmation using your preferred method.
Alternatively, you may click the Contact Us button and complete the “Write To Us” form. Complete the form, select Update Contact Information from the “Interest” drop down menu, include your new contact information in the “How may we help?” text box, and click submit. We will update your contact information and send you a confirmation via email.
As a last resort, you may provide your new contact information via traditional mail.
Centennial Lending requires written/emailed requests prior to updating contact information. We will not update contact information over the phone.
Keeping your contact information up to date ensures you receive important loan information and documents in a timely manner. Centennial Lending does not sell your information and rarely sends promotional information.
“The quality of being honest and having strong moral principles.” That is the English Oxford Dictionary’s definition of Integrity. For many years I have struggled with the notion that Integrity and the business world...