Glossary

Cap – Credit Report

Terms to know… [read more]

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Cap

Definition: A limit set by a lender on how much a borrower’s monthly payment or interest rate can increase or decrease. Adjustable rate mortgages (ARMs) often include a cap to protect borrowers from big jumps in monthly payments.

Cap - Credit Report

Cash-out Refinance

Definition: A mortgage refinancing transaction in which the new mortgage amount is greater than the existing mortgage amount, plus loan settlement costs. The purpose of a cash-out refinance is to extract equity from the borrower’s home. A cash-out refinance is an alternative to a home equity loan.

Certificate of Deposit Definition

Definition: A time deposit held in a bank which pays a certain amount of interest to the depositor.

Certificate of Deposit Index Definition

Definition: One of the indexes used for determining interest rate changes on some adjustable rate mortgages. It is an average of what banks are paying on certificates of deposit.

Certificate of Reasonable Value (CRV)

Definition: A document issued by the Veterans Administration. The current market value estimate is based on an appraisal approved by the VA. The CRV places a maximum value of a VA-guaranteed mortgage loan allowed for a specific property.

Chain of Title

Definition: The history of all owners and of real property and transfers of title to property. It includes dates of their acquisition and their title and dates back to the first deed from the government.

Clear Title

Definition: Title to ownership that is clear of any lien or claims on the property and therefore available for sale.

Closing

Definition: Final step in completing a real estate transaction. This can include a meeting where contracts are to be signed which transfer ownership of real estate.

Closing costs

Definition: Miscellaneous fees charged by those involved with a sale of a home and are typically paid at closing. This can include local government office fees for recording the deed and title company fees for handling paperwork.

Collateral

Definition: Property that can be accepted by lender as security for a loan. In homeownership the collateral IS the property itself.

Collection

Definition: The efforts used in bringing loans current, when borrowers fall behind, and to file necessary notices to proceed with foreclosures when and if necessary.

Commission

Definition: A common payment method with salespeople; including Realtors, loan officers, title representatives, attorneys, etc. Commissions are paid typically at the end of a closing and are taken out of charges paid by the seller or buyer in the purchase of property.

Common Area Assessments

Definition: Charges paid to the Homeowners Association by owners of property such as individual condominiums or planned unit development. These charges are used to maintain property and common areas.

Common Areas

Definition: Portions of a building, land, or amenities which are owned or managed by a condominium project’s homeowner’s association or a planned unit development, which are used by all of the unit owners who share common expenses for maintenance.

Comparable Sales

Definition: Sales of properties, in areas nearby which have recently occurred, used to help determine the market value of a specific property.

Condominium

Definition: Can be referred to as “apartments” which are owned instead of rented. It is ownership of real property where all owners own the property including common areas and buildings. It refers to the type of ownership not type of construction or development.

Condominium Conversion

Definition: Refers to changing ownership of an existing building into a condominium version of ownership. Typically it is the change of rental spaces into condominium ownership.

Construction Loan

Definition: A loan to finance costs of construction and is short term. Payments to the builder by the lender occur periodically.

Contingency

Definition: Whatever condition that must be met before a contract is legally binding. This can include necessary home inspections and paperwork before contract binding.

Contract

Definition: a written or oral agreement regarding doing or not doing a certain thing.

Conventional Mortgage

Definition: Home loans not including government loans such as VA or FHA.

Convertible ARM

Definition: An adjustable-rate mortgage that can be changed by a borrower to a fixed-rate mortgage.

Cooperative (Co-op)

Definition: A multiple ownership where the residents of a multiunit housing complex are shareholders in the cooperative corporation that owns the property.

Cost of Funds Index (COFI)

Definition: An index used to determine changes in interest rates for certain adjustable mortgages. It is the regional average of interest expenses incurred by financial institutions in the 11th District of the federal Home Loan Bank.

Credit

Definition: An agreement where a borrower receives something valuable in exchange for a promise to repay the lender later in time.

Credit History

Definition: A record of repayment of debt for a specific individual. Credit histories are reviewed by mortgage lenders to determine credit risk.

Creditor

Definition: Someone to whom money is owed.

Credit Report

Definition: A report of a specific individual’s credit history which is prepared by the credit bureau and used by lenders to determine how credit worthy that applicant is for a loan.

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Hi! I’m Maria, the Marketing Coordinator for Homes.com. I am part of a dream team that is dedicated to running this awesome blog along with Homes.com’s social channels. If I am not busy writing blogs and socially sharing for Homes.com, you can find me painting, drinking tea with my friends, and doing DIY projects!

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