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California
Bungalow - Top
A
small, one-story, compact, early-twentieth-century house.
California
Ranch - Top
A
one-story, post-World War II style, ground-hugging house with a
low, pitched roof.
Call
Option - Top
A
provision in a home loan that gives the mortgagee the right to call
the mortgage due and payable at the end of a specified time period
for any reason.
Cancellation
Clause - Top
A
contract provision that gives the right to terminate obligations
upon the occurrence of specified events.
Cap
- Top
Refers
to a provision of an adjustable rate mortgage (ARM) that limits
how much the interest rate or payment can increase or decrease.
Capital
- Top
1)
The net worth of a business defined by the amount by which its assets
exceed its liabilities. 2) Money used to create income. 3) The money
or other assets comprising the wealth at the disposal of a person
or business enterprise. 4) The accumulated wealth of a business
or individual.
Capital
Expenditures - Top
The
cost of an improvement made to extend the useful life of a property
or to add to its value.
Capital
Improvement - Top
Any
component constructed as a permanent improvement to real property
that increases its value and adds to its useful life.
Cash
Out Refinance - Top
A
refinance loan that provides the borrower with cash that exceeds
the amount required to pay off existing mortgages on the home. This
additional cash can be used by the borrower for any purpose.
Certificate
of Deposit (CD) - Top
An
instrument, issued by a bank or other financial institution, that
is evidence of a type of savings deposit. The document includes
the institution’s promise to return the deposit, plus earnings
at a specified interest rate within a specified period.
Certificate
of Deposit index - Top
A
rarely used index that is used to determine interest rate changes
for certain adjustable-rate mortgages (ARM) plans.
Certificate
of Eligibility - Top
A
document issued by the federal government certifying a veteran’s
eligibility for a Department of Veterans Affairs (VA) loan.
Certificate
of Reasonable Value (CRV) - Top
A
document issued by the Department of Veterans Affairs (VA) that
establishes the maximum value and loan amount for a VA loan.
Certificate
of Title - Top
A
statement of opinion rendered by a title company or attorney, stating
that a title to real property is legally held by the current owner.
Chain
of Title - Top
A
history of all documents, including conveyances and encumbrances,
that affect title to a parcel of real property, starting with the
earliest existing document and ending with the most recent.
Change
Frequency - Top
Term
sometimes used to describe the frequency of payment or interest
rate changes in an adjustable-rate-mortgage (ARM).
Chattel
- Top
Anything
tangible and owned, other than real estate. The same as personal
property.
City/County
Tax Stamp - Top
A
tax that is required in some municipalities if a property changes
hands or a new mortgage is obtained. The amount of this tax can
vary with each state, city and county. For our comparison purposes,
this fee is considered a tax or other unavoidable fee.
Civilian
Employment - Top
Economic
indicator that reports the number of new civilian jobs created and
the percentage of civilians in the job market who are unemployed.
One of the most anticipated and closely watched economic indicators.
Frequency: monthly. Source: Labor Department.
Clear
Title - Top
A
title that is free of clouds, liens, disputed interests or legal
questions as to ownership of the property.
Close
of Escrow - Top
A
meeting of the parties involved in a real estate transaction to
finalize the process. In the case of a purchase, the close of escrow
usually involves the seller, the buyer, the real estate broker and
the lender. In the case of a refinance, the close of escrow involves
the borrower and the lender. Sometimes referred to as the settlement
or closing.
Closing
- Top
A
meeting of the parties involved in a real estate transaction to
finalize the process. In the case of a purchase, a closing usually
involves the seller, the buyer, the real estate broker and the lender.
In the case of a refinance, the closing involves the borrower and
the lender. Sometimes referred to as the settlement or the close
of escrow.
Closing
Cost Item - Top
A
single fee that a home buyer must pay at closing. Closing costs
are made up of individual closing cost items such as origination
fees, escrow fees, underwriting fees and processing fees. Most closing
cost items are included as numbered items on the HUD-1 Settlement
Statement.
Closing
Costs - Top
The
total of all the items that must be paid at closing related to your
new mortgage.
Closing
Statement - Top
Also
referred to as the HUD-1 or the settlement statement, this is the
document that provides line by line detail of the financial details
related to a specific real estate transaction such as the fees paid
by the seller and the buyer for a purchase transaction or the fees
paid by the borrower for refinances.
Cloud
on Title - Top
Any
conditions such as encumbrances, liens or claims revealed by a title
search that adversely affect the title to real estate. Clouds on
a title often cannot be removed, except by a quitclaim deed release,
or court action. Compare with clear title.
Co-maker
- Top
A
person who signs a promissory note along with the primary 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. Sometimes called a co-signer.
Coinsurance
- Top
A
sharing of hazard insurance risk between the insurer and the insured,
or others. A coinsurance clause states to what extent a loss will
be covered based on the percentage of value insured.
Collateral
- Top
Property
pledged as security for a debt. The borrower risks losing the collateral
if the debt is not repaid according to the terms of the loan contract.
Collection
- Top
The
process of bringing a delinquent debt current and the filing of
the necessary notices to proceed with repossession or foreclosure
when necessary.
Commission
- Top
The
fee charged by a broker or agent for negotiating a real estate or
loan transaction. A commission is generally a small percentage of
the price of the property or amount borrowed. Sometimes called points.
Commitment
Letter - Top
A
written offer from a lender to provide financing to a borrower.
The commitment letter states the terms under which the lender agrees
to provide financing to the borrower. Also called a loan commitment.
Common
Area Assessments - Top
Charges
against individual unit owners in a condominium complex, or planned
unit development (PUD), for additional funds to repair, maintain,
or improve the common areas of the project.
Common
Areas - Top
Those
areas of a property (usually a planned unit development or condominium
project) that are used by all owners or tenants. Common areas may
include swimming pools, tennis courts, and other recreational facilities,
as well as common corridors of buildings and parking areas.
Common
Law - Top
The
body of law based on general custom in England and used to a certain
extent in the United States. Common law sometimes prevails unless
superseded by other law.
Community
Home Buyer’s Program - Top
An
income-based community lending model, under which mortgage insurers
and Fannie Mae offer flexible underwriting guidelines to increase
a low or moderate income family’s buying power and to decrease
the total amount of cash needed to purchase a home. Borrowers who
participate in this model are required to attend pre-purchase home-buyer
education sessions.
Community
Land Trust Mortgage Loan - Top
An
alternative financing option that enables low to moderate income
homebuyers to purchase housing that has been improved by a nonprofit
Community Land Trust and to lease the land on which the property
stands.
Community
Property - Top
In
some western and southwestern states, a form of ownership under
which property accumulated through joint efforts of husband and
wife is presumed to be owned equally by them unless acquired as
separate property of either spouse.
Comparables
- Top
An
abbreviated form of comparable properties. Comparables are used
for comparative purposes in the appraisal process and are properties
that are very similar to the property being appraised. They have
been sold recently and have approximately the same size, location
and features. Comparables help the appraiser determine the approximate
fair market value of the subject property. Often just called “comps”.
Compound
Interest - Top
Interest
paid on the original principal balance, and on the accumulated and
unpaid interest.
Condemnation
- Top
The
taking of private property for public purpose by a government under
the right of eminent domain. Also, the determination that a building
is not fit for use or is dangerous and must be destroyed.
Condominium
- Top
A
form of real estate ownership in which each owner has title to a
specific unit in a project and joint ownership in the common areas
of the project.
Condominium
Conversion - Top
Changing
the ownership of an existing rental complex building to the condominium
form of ownership.
Condominium
Hotel - Top
A
condominium complex that has registration desks, short-term occupancy,
room service and daily cleaning services. Such properties are often
operated as commercial hotels even though the units may be individually
owned.
Conforming
Loan - Top
A
loan that does not exceed the maximum loan amount allowed for the
most common mortgage investors. Loans that exceed this amount are
referred to as "jumbo mortgages". The cost of obtaining
a jumbo mortgage is generally higher than the cost of obtaining
a conforming mortgage.
Construction
Loan - Top
A
short term loan that is used to finance the construction of a new
home. During the term of the loan the lender makes payments to the
builder as the work progresses and the borrower makes interest payments
on only the funds that have been disbursed to the builder. Typically,
the construction loan is refinanced into a permanent loan after
the home is completed.
Construction
Spending - Top
Economic
indicator that measures the total amount of spending in the U.S.
on all types of construction. The residential construction component
is useful for predicting future national new home sales and mortgage
origination volume. Frequency: monthly. Source: Commerce Department.
Consumer
Confidence - Top
A
monthly survey of 5,000 households designed to measure Americans’
optimism about their current situation and the future. Frequency:
monthly. Source: Conference Board.
Consumer
Price Index (CPI) - Top
Measures
the change in the cost of living for most American families. Widely
followed as an indicator of inflation of retail purchases. Frequency:
monthly. Source: Federal Reserve.
Consumer
Reporting Agency (CRA) - Top
A
company that prepares detailed reports used by lenders to determine
a potential borrower’s creditworthiness. These agencies obtain
data for these reports from a credit repository as well as from
other sources. More Commonly referred to as credit bureaus.
Consumer
Sentiment - Top
An
index designed to measure consumer optimism. Includes a preliminary
report at mid-month and final report near month-end. Frequency:
semimonthly. Source: University of Michigan.
Contingency
- Top
A
condition that must be met before a contract is legally binding.
For example, a lender's commitment to provide financing to a borrower
may be contingent on receipt of an acceptable appraisal.
Contract
- Top
An
oral or written agreement to do or not to do a certain thing for
consideration.
Conventional
Mortgage - Top
A
mortgage that is not insured or guaranteed by a government agency.
Convertibility
Clause - Top
A
provision in some adjustable-rate-mortgages (ARM’s) that allows
the borrower to change the ARM to a fixed-rate-mortgage at a specified
period within the term of the loan.
Convertible
ARM - Top
An
adjustable rate mortgage (ARM) that allows a borrower to convert
their mortgage to a fixed rate loan for the remainder of the loan
term if certain conditions are met.
Cooperative
Project - Top
A
residential or mixed-use building wherein a corporation holds title
to the property, sells shares of stock, representing the value of
a single apartment, to individuals who then receive a lease, or
similar agreement, as evidence of title.
Cooperative
(Co-op) - Top
A
type of real estate ownership in which residents of a multi-unit
property own shares of the corporation that owns the property. The
ownership of these shares gives the owner the right to occupy a
unit in the building.
Cooperative
Corporation - Top
A
corporation that holds the title to a cooperative project and grants
occupancy rights to shareholders through leases or similar rental
agreements.
Cosigner
- Top
Another
person who signs your loan and assumes equal responsibility for
it.
Cost
of Funds Index (COFI) - Top
An
index that may be used to determine the interest rate changes of
an adjustable rate mortgage (ARM). The Cost of Funds Index, or COFI
as it is commonly called, is the weighted average of interest rates
that Federal Home Loan banks have paid to their customers recently.
Usually, the COFI for the 11th district of Federal Home Loan Banks
is used and covers banks in California, Nevada, and Arizona. The
index value is announced on the last working day of the month following
the month listed.
Courier/Mailing
Fee - Top
The
fee associated with a lender sending documents to other parties
involved in the loan, like an attorney or title company. For our
comparison purposes, this fee is considered a third party fee, however
some lenders may choose not to pass these costs on to the borrower.
Covenant
- Top
A
promise written into deeds, mortgages and other financial instruments
that obligates or restricts the borrower. The violation of some
covenants can result in foreclosure.
Credit
- Top
A
lender may reduce the actual amount of the closing costs by a credit
in order to offer more competitive fees.
Credit
Bureau - Top
An
agency that gathers and keeps your credit record.
Credit
Grade - Top
A
value given to an individual to reflect their current and past debt
repayment patterns. A grade of "A" is considered to be
the best.
Credit
History - Top
A
record of a person’s debt history, including all open and fully
repaid obligations. A credit history helps a lender to determine
whether a potential borrower has satisfactory history of repaying
debts in a timely fashion.
Credit
Life Insurance - Top
A
type of insurance, often bought by borrowers, that will pay off
the debt if the borrower dies while the policy is in force.
Credit
Report - Top
A
record of an individual's current and past debt repayment patterns.
A credit history helps a lender to determine whether a borrower
has a history of repaying debts in a timely manner. For our comparison
purposes, the credit report fee is considered to be a third party
fee.
Credit
Repository - Top
An
institution that collects, maintains, stores and sells financial
and publicly recorded information about the payment records of individuals
applying for credit.
Credit
Scoring System - Top
A
statistical system used to rate credit applicants according to various
characteristics relevant to creditworthiness.
Credit-Related
Insurance - Top
Health,
life or accident insurance designed to pay the outstanding balance
of a debt.
Creditor
- Top
A
person or business that is owed money.
Customer
Credit - Top
Economic
indicator that measures the level of outstanding consumer installment
debt. Can be used in conjunction with real sales to determine whether
cash or credit is fueling growth. Frequency: monthly. Source: Federal
Reserve.
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