Frequently Asked Questions
We have done our best to provide answers to the most frequently asked questions, but the best way to get answers is to contact us directly. You can count on our team to answer your questions honestly and expertly. We are here to serve so give us a call.
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.
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.
Absolutely! Our services are available to all consumers. Some products may require that yoau become a member of one of our partner credit unions but the process is generally integrated into the standard loan process.
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.
Ideally we’d like to have you authorize a recurring ACH transaction which ensures that your payments are made automatically each month. This can be done at the time of closing or anytime thereafter by contacting a Centennial Lending representative. Alternatively you can complete a one-time ACH payment by logging in or you may utilize your primary financial institution’s bill payment system, mail your payment or even drop it off in person if you like.
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.
Centennial Lending offers a variety of residential investment property funding options. You are more than welcome to complete and email an application which can be found on our Commercial Lending page, or you can contact us directly to discuss your options. In either case we will discuss your personal goals and make sure that we point you in the right direction.
I don’t know if you’re aware of a popular trend in New Year’s resolutions, where people choose a single word to inspire their year, rather than a list of concrete goals. I only became aware of it in the last couple of years, but I’ll be honest and let you know right now ...