What is a 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.
What is a cap?
A provision of an adjustable-rate mortgage (ARM) that limits how much the interest rate or mortgage payments may increase or decrease.
What is a capital improvement?
Any structure or component erected as a permanent improvement to real property that adds to its value and useful life.
What is a 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.
What is a certificate of deposit?
Commonly known as a "CD," certificates of deposit bear a maturity date and a specified rate of interest. Penalties may apply for early withdrawal.
What is a certificate of eligibility?
A document issued by the federal government certifying a veteran's eligibility for a Department of Veterans Affairs (VA) mortgage.
What is a 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.
What is a 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 current owner.
What is a 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.
What is a change frequency?
The frequency (in months) of payment and/or interest rate changes in an adjustable-rate mortgage (ARM).
What is a clear title?
A title that is free of liens or legal questions as to ownership of the property.
What is a closing?
A meeting at which a sale of a property is finalized by the buyer signing the mortgage documents and paying closing costs. Also called "settlement."
What is a 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. 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.
What is a 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.
What is a 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.
What is collateral?
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.
What is a collection?
The efforts used to bring a delinquent mortgage current and to file the necessary notices to proceed with foreclosure when necessary.
What is a combination loan?
With this type of loan, you receive a first mortgage for 80 percent of the loan amount, and a second mortgage at the same time for the remainder of the balance. If avoiding PMI (mortgage insurance) is important to you, consider combination loans--known as 80/10/10 loans or 80/20's.
What is a combined loan-to-value (CLTV)?
The unpaid principal balances of all the mortgages on a property (first and second usually) divided by the property's appraised value.
What is a co-maker on a loan?
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.
What is a commission?
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.
What is a commitment 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 commitment."
What are 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.
What is a 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 value.
What is 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.
What are comparables?
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.
What is compound interest?
E-LOAN CDs and Savings accounts compound interest daily. This refers to any interest earned on an account holder's principal balance, as well as any prior interest.
What is a condominium conversion?
Changing the ownership of an existing building (usually a rental project) to the condominium form of ownership.
What is a conforming loan?
The current conforming loan limit is $417,000 and below. Conforming loan limits change annually.
What is a 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.
What is a 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.
What is a contingency?
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.
What is a conventional mortgage?
A mortgage that is not insured or guaranteed by the federal government.
What is a 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.
What is a convertible ARM?
An adjustable-rate mortgage (ARM) that can be converted to a fixed-rate mortgage under specified conditions.
What is a 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.
What is 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.
What is a 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.
What is a covenant?
A clause in a mortgage that obligates or restricts the borrower and that, if violated, can result in foreclosure.
What is a 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.