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1. What is a Credit Score? How can I check my Credit Report?
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Credit scores are numerical values that rank individuals according to their credit history at a given point in time. The score is based on the timeliness of past payment history, amount of credit outstanding, amount of credit available and other factors. Credit scores help determine the relative credit worthiness of a borrower and they can range from approximately 400 to 900. The lower the score, the greater the risk of default on a loan.
The three credit reporting agencies allow you to request one free report per year. These three agencies include:
Experian, Inc.
Post Office Box 2104
Allen, TX 75013
Phone: (888) 397-3742
Website: www.experian.com
Trans Union Consumer Relations
2 Baldwin Place
Post Office Box 1000
Chester, PA 19022
Phone: (800) 916-8800
Website: www.transunion.com
Equifax
Post Office Box 740241
Atlanta, GA 30374
Phone: (800) 685-1111
Website: www.equifax.com
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2. What documentation will I need during the course of my loan?
This can change, but before you close, Castle Point Mortgage may want to see copies of the following:
- Proof of identification;
- Proof of property and hazard insurance;
- Income documentation, such as W2's and pay stubs; and
- If you want to consider situation specific income, such as alimony payments or child support, you may need a copy of the fully executed divorce decree-indicating amount of child support, alimony or separate maintenance payments.
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3. What’s an Interest Rate? What is APR? What are Points?
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Interest Rate
The interest rate of your loan affects your monthly payment; the higher the interest rate, the higher your monthly payment, while the lower the interest rate, the lower your monthly payment. In the early years of a loan, interest will make up the bulk of the mortgage payments. The percentage of the payment that is applied to principal will gradually increase over the years as the loan is paid off.
Points
A point, also known as an "origination fee" or “discount point,” is equal to 1% of loan amount. For example, for a loan equal to $100,000, one point would equal $1,000; two points would equal $2,000, etc. Points are paid to the lender at the time of closing and intended to save the borrower money on interest over the life of a loan and, therefore, lower monthly payments.
APR
Annual Percentage Rate. The yearly cost of a loan, including interest, insurance, and the origination fee (points), expressed as a percentage.
While the interest rate is the contractual rate that you agree to pay for your mortgage loan and is used to calculate the interest portion of your monthly mortgage payment, APR includes the interest rate and factors in the prepaid finance charged to give you an average yearly rate.
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4. What’s the difference between a Fixed Rate and an Adjustable Rate Mortgage?
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With a fixed rate mortgage, the interest rate and the monthly payment amount remain the same over the entire mortgage term, traditionally 15 or 30 years. Fixed-rate loans may be appropriate for buyers who plan to live in the property more than 10 years and for total payment stability.
With an adjustable rate mortgage, also known as an ARM, the interest rate fluctuates according to an economic index. Interest rates of ARMs are typically lower than the rate for a comparable fixed rate mortgage due to the fact that over time, the rate will adjust according to current market conditions.
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5. Does Castle Point Mortgage offer refinancing on mobile homes?
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No. We do not lend on mobile or manufactured homes.
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6. Will Castle Point Mortgage consider borrowers who have tax liens or judgments?
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Yes. We will consider loans with tax liens or judgments; however, underwriting guidelines may require that all open judgments and tax liens must be paid with loan proceeds.
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7. Does Castle Point Mortgage lend on commercial property, or mixed-use properties?
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We do not lend on commercial properties, but we do lend on mixed-use properties.
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8. Does Castle Point Mortgage lend on multi-unit income properties?
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Yes, up to 4 units are acceptable.
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