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| | 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 whatever reason. |
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| | Cap - A provision of an ARM limiting how much the interest rate or mortgage payments may increase. |
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| | Capital Expenditure - The cost of an improvement made to extend the useful life of a property or to add to its value. |
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| | Capital Improvement - Any structure or component erected as a permanent improvement to real property that adds to its value and useful life. |
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| | Caps (Interest) - Consumer safeguards which limit the amount the interest rate on an adjustable rate mortgage may change per year and/or the life of the loan. |
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| | Caps (Payment) - Consumer safeguards which limit the amount monthly payments on an adjustable rate mortgage may change. |
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| | Cash Out - A loan transaction in which the borrower receives funds at the time of closing. |
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| | Cash-out Refinance - Refinancing transaction in which the money the borrower receives from the new loan exceeds the total amount he uses to repay the existing first mortgage, closing costs, points; and satisfy any outstanding subordinate mortgage liens. In other words, a refinance transaction in which the borrower receives additional cash he can use for any purpose. |
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| | CD indexed - These ARMs are indexed to Certificate of Deposits (CDs). Adjustments occur every six months, with a per adjustment cap of 1 percent and a lifetime cap of 6 percent. |
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| | Certificate of Deposit - A document written by a bank or other financial institution that is evidence of a deposit, with the issuers promise to return the deposit plus earnings at a specified interest rate within a specified time period. Certificate of Eligibility A document issued by the federal government certifying a veterans 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 establishes the maximum value and loan amount for a VA mortgage. |
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| | Certificate of Title - A certificate issued by a title company or a written opinion by an attorney that the seller has good marketable and insurable title to the property which he is offering for sale. A certificate of title offers no protection against any hidden defects in the title which an examination of the records could not reveal. The issuer of a certificate of title is liable only for damages due to negligence. |
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| | 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. |
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| | Change Frequency - The frequency (in months) of payment and/or interest rate changes in an adjustable-rate mortgage (ARM). |
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| | Chattel - Another name for personal property. |
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| | Claim - An amount requested of an insurer, by a policyholder or a claimant, for an insured loss. |
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| | Clear Title - A title that is free of liens or legal questions as to ownership of the property |
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| | Closing - The meeting between the buyer, seller and lender where the property and funds legally change hands. Also called settlement. |
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| | Closing Cost Item - A fee or amount that a homebuyer must pay at closing for a single service, tax, or product. |
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| | Closing Costs - Includes a loan origination fee, points, appraisal fee, title search and insurance, survey, taxes, deed recording fee, credit report charge and other costs assessed at settlement. The closing costs usually are about 2 percent to 6 percent of the mortgage amount. |
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| | Closing Day - The day on which the formalities of a real estate sale are finished. The certificate of title, abstract, and deed are generally prepared for the closing by an attorney and this cost charged to the buyer. The buyer signs the mortgage, and closing costs are paid. The final closing merely reiterates the original agreement reached in the agreement of sale. |
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| | Cloud (On Title) - An outstanding claim which negatively affects the marketability of title. |
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| | Co-Borrower - An additional borrower on a loan. A co-borrower's obligation on a loan are the same as all other borrowers. |
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| | Coinsurance - A sharing of insurance risk between the insurer and the insured. Coinsurance depends on the relationship between the amount of the policy and a specified percentage of the actual value of the property insured at the time of the loss. |
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| | Coinsurance Clause - A provision in a hazard insurance policy that states the amount of coverage that must be maintained -- as a percentage of the total value of the property -- for the insured to collect the full amount of a loss. |
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| | Collateral - Property offered to support a loan that can be seized if you default. |
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| | Collection - The efforts used to bring a delinquent mortgage current and to file the necessary notices to proceed with foreclosure when necessary. |
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| | Co-maker - 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. |
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| | Commission - The fee charged by or paid to a broker, agent or auto sales rep for negotiating a real estate, car sale or loan transaction. A commission is generally a percentage of the sales price. |
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| | Commitment - An agreement, often in writing, between a lender and a borrower to loan money at a future date subject to the stated conditions. |
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| | Commitment Letter - A formal offer by a lender stating the terms under which it agrees to loan money to a homebuyer. |
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| | Common Area Assessments - Levies against individual unit owners in a condominium or planned unit development (PUD) project for additional capital to defray homeowners' association costs and expenses and to repair, replace, maintain, improve, or operate the common areas of the project. |
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| | Common Areas - Those portions of a building, land, and amenities owned (or managed) by a planned unit development (PUD) or condominium project's 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 areas, means of ingress and egress, etc. |
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| | Common Law - An unwritten body of law based on general custom in England and used to an extent in the United States. |
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| | 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. |
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| | Comparables - An abbreviation for comparable properties used for comparative purposes in the appraisal process; facilities of reasonably the same size and location with similar amenities; properties which have been recently sold, which have characteristics similar to property under consideration, thereby indicating the approximate fair market value of the subject property. |
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| | Competitive Market Analysis (CMA) - A report prepared by a real estate agent that determines a house's market value. The agent compares the house's attributes to similar properties in the area that have recently sold or are still on the market. The CMA is often used to establish the listing price. |
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| | Compounded Interest - Interest is computed on the principal balance of a mortgage plus accrued interest. |
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| | Condemnation - A determination by a governmental agency that a particular building is unsafe or unfit for use. |
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| | Condominium - Individual ownership of a unit and an individual interest in the common areas and facilities which serve the project. |
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| | Condominium Conversion - Changing the ownership of an existing building (usually a rental project) to the condominium form of ownership. |
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| | Condominium Hotel - A condominium project that has rental or registration desks, short-term occupancy, food and telephone services, and daily cleaning services and that is operated as a commercial hotel even though the units are individually owned. |
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| | Conduit - Secondary market entity that purchases loans from originators. Conduits provide expertise to evaluate, price, purchase, and service nonconforming loans. |
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| | Conforming Loan - Any loan that meets the criteria and limits set forth by the largest buyers of loans, Fannie Mae or Freddie Mac. |
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| | Construction Loan - A short term interim loan for financing the cost of construction. The lender advances funds to the builder as the work progresses. |
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| | 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. |
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| | Contingency - A condition that must be met before a contract is legally binding. |
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| | Contract - An oral or written agreement to do or not to do a certain thing. |
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| | Contractor - A person who contracts to erect buildings. There are also contractors for each phase of construction: heating, electrical, plumbing, air conditioning, road building and others. |
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| | Conventional Loan - A mortgage not insured by FHA or guarantee by the VA or Farmers Home Administration (FmHA). |
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| | Conventional Mortgage - Any mortgage which is not insured or guaranteed by a government agency such as HUD/FHA, VA, or the Farmers Home Administration. |
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| | Conversion Option - A conversion option allows you to convert an ARM to a fixed rate mortgage. You will likely pay a higher rate or more points to have this option. |
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| | 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 time. |
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| | Convertible Arm - An adjustable-rate mortgage that can be converted to a fixed-rate mortgage under specified conditions. |
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| | Cooperative (co-op) - A type of multiple ownership in which the residents of a multiunit housing complex own shares in the cooperative corporation that owns the property, giving each resident the right to occupy a specific apartment or unit. |
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| | Cooperative Corporation - A business trust entity that holds title to a cooperative project and grants occupancy rights to particular apartments or units to shareholders through proprietary leases or similar arrangements. |
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| | Cooperative Housing - An apartment building or a group of dwellings owned by a corporation, the stockholders of which are the residents of the dwellings. It is operated for their benefit by their elected board of directors. In a cooperative, the corporation or association owns title to the real estate. A resident purchases stock in the corporation which entitles him to occupy a unit in the building or property owned by the cooperative. While the resident does not own his unit, he has an absolute right to occupy his unit for as long as he owns the stock. |
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| | Cooperative Mortgages - Mortgages related to a cooperative project. |
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| | Cooperative Project - A residential or mixed-use building wherein a corporation or trust holds title to the property and sells shares of stock representing the value of a single apartment unit to individuals who, in turn, receive a proprietary lease as evidence of title. |
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| | 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. |
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| | Correspondent - An entity that typically sells the Mortgages it originates to other lenders. The Correspondent performs some or all of the loan processing functions such as taking the loan application, ordering credit reports, appraisals, title reports, and verifying the borrower's income and employment. The Correspondent may or may not have delegated underwriting and typically funds the loans at settlement. The Mortgage is closed in the Correspondent's name and the Correspondent may or may not service the Mortgage. The Correspondent could commission a Mortgage Broker to perform some of the processing functions. |
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| | Cosigner - Another person who signs your loan and assumes equal responsibility for it. |
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| | Cost of Funds - These ARMs are indexed to the actual costs of what banks pay to borrow money. Rates can adjust every month, six months, or every year. |
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| | 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 savings, borrowings, and advances of the 11th District members of the Federal Home Loan Bank of San Francisco. |
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| | Covenant - A clause in a mortgage that obligates or restricts the borrower and that, if violated, can result in foreclosure. |
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| | Coverage - The amount of protection, usually expressed in a percentage of the total claim amount, an insured receives under a certificate. |
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| | Credit - The right granted by a creditor to pay in the future in order to buy or borrow in the present; also, a sum of money owed to a person or business. |
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| | Credit Bureau - An agency that keeps your credit record. |
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| | Credit Card - Any card used from time to time to borrow money or buy goods or services on credit. |
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| | Credit History - The record of how you've borrowed and repaid debts. |
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| | Credit Life Insurance - A type of insurance often bought by mortgagors because it will pay off the mortgage debt if the mortgagor dies while the policy is in force. |
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| | Credit Ratio - The ratio, expressed as a percentage, which results when a borrower's monthly payment obligation on long-term debts is divided by his or her net income (FHA/VA loans) or gross monthly income (Conventional loans). |
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| | Credit Report - Report of an individual's credit history that a credit reporting company (CRC) or credit repository prepares that you use to determine a borrower's creditworthiness. |
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| | Credit Reporting Company - Company that collects information received from more than one credit repository, merges all the information, and reports it in one form; merged credit reports. |
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| | Credit Repository - Company that collects information on an individual's credit history and reports it in one form, the in-file credit report. |
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| | Credit Scoring System - Statistical system used to rate credit applicants according to various characteristics relevant to creditworthiness. |
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| | Credit Warranty - Guarantee or promise by the seller of the loan relating to the creditworthiness of the borrower(s). The seller warrants that the borrower has the willingness to repay and there is evidence of an acceptable credit reputation. |
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| | Creditor - A person or business from whom you borrow or to whom you owe money. |
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| | Credit-related Insurance - Health, life, or accident insurance designed to pay the outstanding balance of debt. |
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| | Creditworthiness - Past and future ability to repay debts. |
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| | Cure - A loan that is removed from a delinquency status with no loss to the insurer. |
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| | Current Index Value - Your current index value is the index that is used to figure your interest adjustment on ARMs. |
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