Castle Commercial Mortgage: FAQs

How did Castle Commercial Mortgage Co. get into the lending business?

About fifteen years ago in Steve Hickox law office, a client in the roofing business was finding his customers could not pay immediately for new roofs.We set up a lending arm to fund his roofing business, which made loans to the customer and take a small second mortgage on the property where the roof was installed.

Later our client came back with plenty of business but not enough credit to fund all of the credit transactions. He started selling the notes and deeds of trust generated by his roofing business to Steve Hickox and a partner. This was the start of Castle Commercial Mortgage Co.

What is a Private Money Lender?

Castle Commercial Mortgage Co. is a Private Money Lender. Some also call us a Hard Money Lender. Basically, we use Private Funds to make short-term real estate/real property loans. These loans can be quicker to get and more flexible than conventional lenders/banks.

Why should I get a loan from Castle Commercial Mortgage Co.?

We fill a niche that conventional lenders/banks can not make a loan; whether that is because of the type of credit score, type of property or project, etc. The bank may disqualify a customer due to an underwriting requirement: credit score, LTV, type of property, etc. Some of Castle Commercial Mortgage's best customers have come from closings that fell apart at the last minute and needed to be funded ASAP. Castle Commercial Mortgage Co. can help you, the real estate investor short-term financing needs.

What is Castle Commercial Mortgage Co. loan terms?

Castle Commercial Mortgage typically charges for a short-term (i.e. 6 months): 3% Origination Fee & 13% APR. The monthly payment is interest only with a balloon payment (entire principle amount with the accrued interest) due at the end of the term.

Isn't Castle Commercial Mortgage rates & fees high?

Yes, Castle Commercial Mortgage rates & fees are at a higher market rate than conventional lenders due mainly to the higher cost of capital. We pay our investors more for the use of their money; more than banks are credit their depositors.

How can Castle Commercial Mortgage charge such high rates & fees?

Sources of capital on real estate ventures are limited.Conventional lenders/banks tend to have many requirements which not everyone can meet: i.e. having 20% down; or a FICO score above 680. Other real estate deals need to close fast and conventional lenders/banks can take 30-60 days to approve and fund the loan.

Castle Commercial Mortgage Co. typically will fund 24-48hrs after making a loan commitment. The approval process may be only a day or two on some loans. That mainly is due to getting an appraisal & inspection done on the property.

What are your requirements for borrowing?

Castle Commercial Mortgage requires the following:

    1.Personal financial statement.
    2.Credit report.
    3.Appraisal of the collateral. On smaller deals, we look
    at the collateral and perform our own appraisal based
    on recent sold comparables. Loan to value is lower
    than 85%.
    4.Title insurance policy insuring that our loan is in first
    position on the collateral.
    5.Execution of our note and deed of trust by the borrower
    at a title company closing.
    6.Property and casualty insurance naming CCM as insured.
    7.On site property inspection by our staff.
    8.Estimates and budget of work to be performed on the
    9.Exit strategy. This is either a marketing plan for the
    property or a refinance plan.We are often able to provide
    refinance sources to the borrower as the exit strategy.
    10. We verify the above on a case by case basis.

Does Castle Commercial Mortgage have a Pre-Payment penalty?

No. Castle Commercial Mortgage does not have a Pre-Payment penalty. We hope and would like to encourage you do payoff your loan early. That allows us to use those funds again and signifies your project is successful. I will probably tell everyone in the office: you are one of our BEST customers after you payoff your loan early.

What kind of mortgage loans will you not make?

Castle Commercial Mortgage will never make consumer loans. We never bail a delinquent home owner out of trouble; or, lend to a borrower with a credit score that indicates an unwillingness to repay. We never lend unless our analysis shows that the borrower will succeed.We never lend if we think the borrower is being dishonest with us.

Why do you think you will continue to find quality borrowers?

When Banks make loans they look primarily at the income of the borrower for repayment of the loan. We look at the whole picture: the value of the collateral and the loan to value ratio (LTV); the experience of the borrower, many of our borrowers are repeat customers; the credit score of the borrower and the repayment ability of the borrower. We take a common sense approach to each loan and treat each loan on its merits.The borrower must convince us that he is going to make money on the transaction including paying us our interest and fees. We try to only make loans that are win/win. We want the borrower to make money, preferably a lot of money. The more money the borrower makes in his real estate transaction the more willing he is to pay our interest and fees and the more likely he is to be a repeat customer. Right now we are finding more borrowers than we have capital. That is why we are coming to you.

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