REAL ESTATE GLOSSARY
A
B
C
D
E
F
G
H
J
L
M
N
O
P
Q
R
S
T
V
call option
Similar to the acceleration clause.
cap
Adjustable Rate Mortgages have fluctuating interest rates,
but those fluctuations are usually limited to a certain
amount. Those limitations may apply to how much the loan may
adjust over a six month period, an annual period, and over
the life of the loan, and are referred to as "caps." Some
ARMs, although they may have a life cap, allow the interest
rate to fluctuate freely, but require a certain minimum
payment which can change once a year. There is a limit on
how much that payment can change each year, and that limit
is also referred to as a cap.
certificate of
deposit index
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
Eligibility
A document issued by the Veterans Administration that
certifies a veteran's eligibility for a VA loan.
Certificate of Reasonable Value (CRV)
Once the appraisal has been performed on a property being
bought with a VA loan, the Veterans Administration issues a
CRV.
closing
This has different meanings in different states. In some
states a real estate transaction is not consider "closed"
until the documents record at the local recorders office. In
others, the "closing" is a meeting where all of the
documents are signed and money changes hands.
closing costs
Closing costs are separated into what are called
"non-recurring closing costs" and "pre-paid items."
Non-recurring closing costs are any items which are paid
just once as a result of buying the property or obtaining a
loan. "Pre-paids" are items which recur over time, such as
property taxes and homeowners insurance. A lender makes an
attempt to estimate the amount of non-recurring closing
costs and prepaid items on the Good Faith Estimate which
they must issue to the borrower within three days of
receiving a home loan application.
co-borrower
IAn additional individual who is both obligated on the loan
and is on title to the property.
collateral
In a home loan, the property is the collateral. The borrower
risks losing the property if the loan is not repaid
according to the terms of the mortgage or deed of trust.
commission
Most salespeople earn commissions for the work that they do
and there are many sales professionals involved in each
transaction, including Realtors, loan officers, title
representatives, attorneys, escrow representative, and
representatives for pest companies, home warranty companies,
home inspection companies, insurance agents, and more. The
commissions are paid out of the charges paid by the seller
or buyer in the purchase transaction. Realtors generally
earn the largest commissions, followed by lenders, then the
others.
common area
assessments
In some areas they are called Homeowners Association Fees.
They are charges paid to the Homeowners Association by the
owners of the individual units in a condominium or planned
unit development (PUD) and are generally used to maintain
the property and common areas.
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.
community property
In some states, especially the southwest, property acquired
by a married couple during their marriage is considered to
be owned jointly, except under special circumstances. This
is an outgrowth of the Spanish and Mexican heritage of the
area. comparable sales
Recent sales of similar properties in nearby areas and used
to help determine the market value of a property. Also
referred to as "comps."
condominium
A type of ownership in real property where all of the owners
own the property, common areas and buildings together, with
the exception of the interior of the unit to which they have
title. Often mistakenly referred to as a type of
construction or development, it actually refers to the type
of ownership.
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. These are
often found in resort areas like Hawaii.
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.
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.
convertible ARM
IAn adjustable-rate mortgage that allows the borrower to
change the ARM to a fixed-rate mortgage within a specific
time.
cost of funds
index (COFI)
One of the indexes that is used to determine interest rate
changes for certain adjustable-rate mortgages. It represents
the weighted-average cost of savings, borrowings, and
advances of the financial institutions such as banks and
savings & loans, in the 11th District of the Federal Home
Loan Bank.
credit history
A record of an individual's repayment of debt. Credit
histories are reviewed my mortgage lenders as one of the
underwriting criteria in determining credit risk.
credit report
A report of an individual's credit history prepared by a
credit bureau and used by a lender in determining a loan
applicant's creditworthiness.
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.
|