Glossary of Terms, C-H
- Cap
- A provision of an adjustable-rate mortgage (ARM) that
limits how much the interest rate or mortgage payments may
increase or decrease. See lifetime payment cap, lifetime
rate cap, periodic payment cap, and periodic rate cap.
- Carrier
- This refers to the mover that you are working with.
- Certificate of deposit (CD)
- A document written by a bank or other financial institution
evidencing a deposit that will be returned with interest
at a specified interest rate within a specified time period.
- C.O.D.
- Cash on delivery.
- Common area assessments
- Levies against individual unit owners in a condominium
or planned unit development (PUD) project for funds to defray
homeowners' association costs and expenses and to repair,
replace, maintain, improve, or operate the common areas
of the project. The allocation of the proportionate individual
share of the common expenses
- Common areas
- 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 for equal use by all of
the unit owners, who share in the expenses of their operation
and maintenance. Common areas include swimming pools, tennis
courts, and other recreational facilities. In a condominium
or cooperative, the buildings, parking areas, and other
commonly-owned assets.
- Comparables
- A common-use term meaning "comparable properties". Comparables
are properties similar to 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.
- Condominium
- A real estate project (may be dwelling, office, garage,
marina) in which each unit owner has title to a unit and
an undivided interest in the common areas of the project,
and sometimes the exclusive use of certain limited common
areas.
- Condominium conversion
- Changing the ownership of an existing building (usually
a rental project) to the condominium form of ownership
- 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.
- 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.
- Counter-offer
- A rejection of the original offer by proposing a new offer,
thereby terminating the original offer.
- Credit
- An agreement in which a borrower receives something of
value in exchange for a promise to repay the lender at a
later date.
- Credit history
- A record of an individual's open and fully repaid debts
used by a lender to determine whether the individual has
a history of repaying debts in a timely manner.
- Closing
- A meeting between a buyer and seller (and their respective
agents and/or attorneys) at which a sale of a property is
finalized and the deed is delivered to the buyer in exchange
for the purchase price. Also called "settlement."
- Commission
- The fee paid to a broker for successfully concluding a
real estate or loan transaction. A commission is generally
a percentage of the price of the property or loan.
- Consumer reporting
agency (or bureau)
- An organization that prepares reports 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.
- 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.
- Contract
- An oral or written binding agreement between two or more
competent parties to do or not to do some legal act for
a legal consideration.
- Contract for Sale (or Deed)
- A contract between purchaser and a seller of real estate
to convey title after certain conditions have been met;
a form of installment sale.
- Credit
- An agreement in which a borrower receives something of
value in exchange for a promise to repay the lender at a
later date.
- Credit history
- A record of an individual's open and fully repaid debts
used by a lender to determine whether the individual has
a history of repaying debts in a timely manner.
- Creditor
- A person to whom money is owed.
- 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. See merged credit report.
- 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.
- Debt
- An amount owed to another. See installment loan and revolving
liability.
- Debt-to-Income Ratio
- The ratio of a borrower's monthly payment obligation on
long-term debts divided by gross monthly income expressed
as a percentage. See housing expenses-to-income ratio.
- Deed
- A legal document conveying title to a property.
- Deed-in-lieu (of foreclosure)
- A deed given by a mortgagor to the mortgagee to satisfy
a debt and avoid foreclosure. Also called a "voluntary conveyance."
- Deed of trust
- The document used in some states instead of a mortgage
when title is conveyed to a trustee.
- Deposit
- A sum of money or other valuable consideration given to
bind the sale of real estate, or to ensure payment or an
advance of funds in the processing of a loan. See earnest
money deposit.
- Down payment
- Money paid to make up the difference between the purchase
price and the mortgage amount.
- Earnest money deposit
- A deposit made by the potential home buyer at the time
of an offer. See binder, deposit.
- Effective gross income
- All annual income including salary, overtime and bonus
that is regular or guaranteed from all sources.
- Encumbrance
- Limitations against a person's interest in a property,
such as mortgages, leases, easements, or restrictions.
- Equal Credit Opportunity Act (ECOA)
- A federal law requiring lenders and other creditors to
make credit equally available without discrimination based
on race, color, religion, national origin, age, sex, marital
status, or receipt of income from public assistance programs.
- Equity
- The difference between the fair market value of the property
and the amount of debt outstanding against it.
- Escrow
- Money, documents or other items of value in the care of
a third party to be released upon the fulfillment of a condition.
For example, the deposit by a borrower with the lender of
funds to pay real estate taxes and insurance premiums when
they become due, or the deposit of funds or documents with
an attorney or escrow agent to be disbursed upon the closing
of a sale of real estate.
- Escrow account
- The account in which escrow payments are held.
- Examination of title
- The report on the title of a property from the public
records or an abstract of the title.
- Fair Credit Reporting
Act
- A law that regulates the disclosure of consumer credit
reports and histories by reporting agencies and establishes
procedures for correcting mistakes on one's credit record.
- Fair Housing Act
- A law that prohibits discrimination in sales of property
or the granting of loans on the basis of race, religion,
color, national origin, sex, familial status, or handicap.
- Fannie Mae (FNMA)
- A New York Stock Exchange Company providing the nation's
largest source of financing for home mortgages. It operates
pursuant to a federal charter and is and the largest non-bank
financial services company in the world. (Federal National
Mortgage Association)
- Fannie Mae's Community Home Buyer's
Program
- A plan under which mortgage insurers and Fannie Mae offer
flexible underwriting guidelines to increase a low or moderate
income family's buying power by decreasing the total amount
of cash needed to purchase a home.
- Federal Housing Administration (FHA)
- An agency of the U.S. Department of Housing and Urban
Development (HUD) which insures residential mortgage loans
made by private lenders. While the FHA sets standards for
construction and underwriting, it does not lend money or
plan or construct housing.
- Fixed-rate mortgage (FRM)
- A mortgage in which the interest rate remains constant
during the entire term of the loan, regardless of the change
in market interest rates.
- Fixture
- Personal property that is attached to real property becoming
part of the real property.
- Foreclosure
- The legal process by which a borrower is deprived of their
interest in the mortgaged property. This usually is the
last action taken by a lender to collect from a borrower
in default. Foreclosure involves a forced sale of the property
at public auction with the proceeds of the sale being applied
against the mortgage debt.
- Home inspection
- An examination conducted by a person (usually a licensed
professional) contracted by the buyer to evaluate the structure,
systems and mechanical condition of a property. A satisfactory
home inspection is often included as a contingency by the
purchaser.
- Homeowners association
- A nonprofit association comprised of all owners that manages
the assets (physical and monetary) of any common-ownership-type
property such as a condominium, cooperative, planned unit
development (PUD) or any other property developed with common
ownership. In a condominium project, it has no ownership
interest in the common elements. In a PUD project, it holds
title to the common property. In a cooperative, it owns
all the property.
- Homeowner's insurance
- An insurance policy that protects a dwelling and its contents
from personal liability and damage. Sufficient coverage
is required by lenders.
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