Mortgage Glossary – C
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
all Option
A provision of a note, which allows the lender to require repayment of the loan in full before the end of the loan term. The option may be exercised due to breach of the terms of the loan or at the discretion of the lender.
Caps (interest)
Caps limit the amount the interest rate on an adjustable rate mortgage can change in an adjustment interval and/or over the life of the loan.
Caps (payment)
Consumer safeguards, which limit the amount monthly payments on an adjustable-rate mortgage may change.
Cash Out Refinancing
Money received when you get a new loan that is larger than the remaining balance of your current loan. This is based upon any equity that has been built up in the house.
The cash out amount is calculated by subtracting the sum of the old loan and fees from the new mortgage loan.
Cashier’s Check (or Bank Check)
A check whose payment is guaranteed because it was paid for in advance and is drawn on the bank’s account instead of the customer’s.
Cash to Close
Liquid assets that are readily available to be used to pay the closing costs involved in the closing of a mortgage transaction.
Ceiling
The maximum allowable interest rate of an adjustable rate mortgage.
Certificate of Title
Written viewpoint of the status of title to a property, given by an attorney or title company. This certificate does not offer the protection given by title insurance.
Chain of Title
The chronological order of conveyance of a property from the original owner to the present owner.
Closing
The consummation of a real estate transaction. The closing includes the delivery of a deed, financial adjustments, signing of notes and disbursement of funds necessary to complete the sale and loan transaction.
Closing Costs
Money paid generally by the borrower in connection with the closing of a mortgage loan.
Conforming Loan
Conventional home mortgages eligible for sale and delivery to either the Federal National Mortgage Association (FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC). These agencies generally purchase first mortgages up to loan amounts mandated by Congressional directive
COFI
See Cost of Funds Index.
Collateral
Property (for example, your home) pledged as security for a debt.
Commission
Money paid to a real estate agent or broker for negotiating a real estate or loan transaction.
Commitment (loan)
A binding pledge to lend and a statement by the lender of the terms and conditions under which a loan is made.
Commitment Letter
A formal offer by a lender stating the terms under which it agrees to loan money to a homebuyer
Condominium
A form of property ownership in which the homeowner holds title to an individual dwelling unit and a proportionate interest in common areas and facilities of a multi-unit project.
Conforming Loan
A mortgage loan which meets all requirements to be eligible for sale and delivery to Federal agencies such as FNMA and FHLMC. The maximum conforming loan amount is $300,000 for a one-unit property.
Contingency
A condition which must be satisfied before a contract is legally binding.
Contract of Sale
The agreement between the buyer and seller on the purchase price, terms, and conditions of a sale.
Conventional Loan
Loans that are not made under any government housing program; they are not subject to the restrictions of government insured housing programs, such as loan size limits.
Conversion Clause
A provision in some ARMs that allows you to change an ARM to a fixed-rate loan, usually after the first adjustment period. The new fixed rate will be set at current rates and there may be a charge for the conversion feature.
Convertible ARMs
A type of ARM loan that can be converted to a fixed-rate loan during a given time period.
Conveyance
The document used to affect a transfer, such as a deed or mortgage.
Cost of Funds Index (COFI)
An index of the weighted-average interest rate paid by savings institutions for sources of funds.
Covenant
A clause in a contract that obligates or restricts the parties and which, if violated, can result in a legal action.
Credit Bureau
A credit bureau is a clearinghouse for credit history information.
Credit Report
A report detailing the credit history of an individual.
Credit Score
A statistical model used in assessing an individual’s creditworthiness information such as your current history, type of credit you use and late payments.
