- call option
- A provision in the mortgage that gives the mortgagee the right to
call the mortgage due and payable at the end of a specified period for
- A provision of an adjustable-rate mortgage (ARM) that limits how
much the interest rate or mortgage payments may increase or decrease.
- capital improvement
- Any structure or component erected as a permanent improvement to
real property that adds to its value and useful life.
- cash-out refinance
- A refinance transaction in which the amount of money received from
the new loan exceeds the total of the money needed to repay the
existing first mortgage, closing costs, points, and the amount
required to satisfy any outstanding subordinate mortgage liens.
In other words, a refinance transaction in which the borrower receives
additional cash that can be used for any purpose.
- Certificate of Eligibility
- A document issued by the federal government certifying a veteran's
eligibility for a Department of Veterans Affairs (VA) mortgage.
- Certificate of Reasonable Value (CRV)
- A document issued by the Department of Veterans Affairs (VA) that
established the maximum value and loan amount for a VA mortgage.
- certificate of title
- A statement provided by an abstract company, title company, or
attorney stating that the title to real estate is legally held by the
- chain of title
- The history of all of the documents that transfer title to a parcel
of real property, starting with the earliest existing document and
ending with the most recent.
- change frequency
- The frequency (in months) of payment and/or interest rate changes in
an adjustable-rate mortgage (ARM).
- clear title
- A title that is free of liens or legal questions as to ownership of
- A meeting at which a sale of a property is finalized by the buyer
signing the mortgage documents and paying closing costs. Also
- closing cost item
- A fee or amount that a home buyer must pay at closing for a single
service, tax, or product. Closing costs are made up of
individual closing cost items such as origination fees and attorney's
fees. Many closing cost items are included as numbered items on
the HUD-1 statement.
- closing costs
- Expenses (over and above the price of the property) incurred by
buyers and sellers in transferring ownership of a property.
Closing costs normally include an origination fee, an attorney's fee,
taxes, an amount placed in escrow, and charges for obtaining title
insurance and a survey. Closing costs percentage will vary
according to the area of the country.
- closing statement
- Also referred to as the HUD-1. The final statement of costs
incurred to close on a loan or to purchase a home.
- cloud on title
- Any conditions revealed by a title search that adversely affect the
title to real estate. Usually clouds on title cannot be removed
except by a quitclaim deed, release, or court action.
- An asset (such as a car or a home) that guarantees the repayment of
a loan. The borrower risks losing the asset if the loan is not
repaid according to the terms of the loan contract.
- The efforts used to bring a delinquent mortgage current and to file
the necessary notices to proceed with foreclosure when necessary.
- A person who signs a promissory note along with the borrower.
A co-maker's signature guarantees that the loan will be repaid,
because the borrower and the co-maker are equally responsible for the
repayment. See endorser.
- The fee charged by a broker or agent for negotiating a real estate
or loan transaction. A commission is generally a percentage of
the price of the property or loan.
- committment letter
- A formal offer by a lender stating the terms under which it agrees
to lend money to a home buyer. Also known as a "loan
- common areas
- Those portions of a building, land, and amenities owned (or managed)
by a planned unit development (PUD) or condominium project homeowners'
association (or a cooperative project's cooperative corporation) that
are used by all of the unit owners, who share in the common expenses
of their operation and maintenance. Common areas include
swimming pools, tennis courts, and other recreational facilities, as
well as common corridors of buildings, parking area, means of ingress
and egress, etc.
- Community Home Improvement Mortgage Loan
- An alternative financing option that allows low - and
moderate-income home buyers to obtain 95 percent financing for the
purchase and improvement of a home in need of modest repairs.
The repair work can account for as much as 30 percent of the appraised
- community property
- In some western and southwestern states, a form of ownership under
which property acquired during a marriage is presumed to be owned
jointly unless acquired as separate property of either spouse.
- An abbreviation for "comparable properties"; used for
comparative purposes in the appraisal process. Comparables are
properties like the property under consideration; they have reasonably
the same size, location, and amenities and have recently been
sold. Comparables help the appraiser determine the approximate
fair market value of the subject property.
- A real estate project in which each unit owner has title to a unit
in a building, an undivided interest in the common areas of the
project, and sometimes the exclusive use of certain limited common
- condominium conversion
- Changing the ownership of an existing building (usually a rental
project) to the condominium form of ownership.
- construction loan
- A short-term, interim loan for financing the cost of
construction. The lender makes payments to the builder at
periodic intervals as the work progresses.
- consumer reporting agency (or bureau)
- An organization that prepares reports that are used by lenders to
determine a potential borrower's credit history. The agency
obtains data for these reports from a credit repository as well as
from other sources.
- A condition that must be met before a contract is legally
binding. For example, home purchasers often include a
contingency that specifies that the contract is not binding until the
purchaser obtains a satisfactory home inspection report from a
qualified home inspector.
- An oral or written agreement to do or not to do a certain thing.
- conventional mortgage
- A mortgage that is not insured or guaranteed by the federal
- convertibility clause
- A provision in some adjustable-rate mortgages (ARMs) that allows the
borrower to change the ARM to a fixed-rate mortgage at specified
timeframes after loan origination.
- convertible ARM
- An adjustable-rate mortgage (ARM) that can be converted to a
fixed-rate mortgage under specified conditions.
- cooperative (co-op)
- A type of multiple ownership in which the residents of a multi-unit
housing complex own shares in the cooperative corporation that owners
the property, giving each resident the right to occupy a specific
apartment or unit.
- corporate relocation
- Arrangements under which an employer moves an employee to another
area as part of the employer's normal course of business or under
which it transfers a substantial part or all of its operations and
employees to another area because it is relocating its headquarters or
expanding its office capacity.
- cost of funds index (COFI)
- An index that is used to determine interest rate changes for certain
adjustable-rate mortgage (ARM) plans. It represents the
weighted-average cost of saving, borrowings, and advances of the 11th
District members of the Federal Home Loan Bank of San Francisco.
- A clause in a mortgage that obligates or restricts the borrower and
that, if violated, can result in foreclosure.
- An agreement in which a borrower receives something of value in
exchange for a promise to repay the lender at a later date.
- credit history
- A record of an individual's open and fully repaid debts. A
credit history helps a lender to determine whether a potential
borrower has a history of repaying debts in a timely manner.
- credit report
- A report of an individual's credit history prepared by a credit
bureau and used by a lender in determining a loan applicant's
creditworthiness. See merged credit report.
- credit repository
- An organization that gathers, records, updates, and stores financial
and public records information about the payment records of
individuals who are being considered for credit.