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.