Caps
An adjustable rate mortgage (ARM) has a "cap" when there is a limitation assigned to either its periodic or lifetime interest rate increases. |
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Cash Reserves
The buyer's "cash reserves" consist of the estimated liquid funds that he/she will have subsequent to making the down payment and paying all closing costs. |
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CC&R's
The covenants, conditions and restrictions (CC&R's) are any documents that control or limit the intended uses of the property. |
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Certifcate of Occupancy (CO)
A local municipality may issue a written authorization allowing a new or nearly completed structure to be inhabited. Such a "certificate of occupancy" means that the structure has been certified as safe, sound and sanitary, and has been demonstrated to adequately match the plans and specifications provided to the Appraiser at the time the loan process began. |
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Certificate of Commitment
When the lending institution approves of a VA (Veteran's Administration) loan, it may provide a "certificate of commitment" indicating it's acceptance, which usually remains valid for up to six months. |
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Certificate of Reasonable Value (CVR)
A VA (Veteran's Administration) guaranteed mortgage may require the Veteran's Administration to issue an official, written appraisal, called a "certificate of reasonable value" (CVR), establishing the property's current market value. |
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Certificate of Title
Prior to closing, a buyer will normally have an attorney research the history of the property in question, and then draft a formal document and/or written opinion confirming that the seller has valid marketable, legal and insurable title. It should be understood that such a "certificate of title" only validates what a professional examination of available records reveals, and thus does not normally provide protection from any hidden defects in the title (for which the issuer of the certificate of title is not liable or legally responsible). Consequently, a buyer may opt to purchase a title insurance policy |
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Chattel
"Chattel" is simply another word for transportable, personal property. |
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Closing (Close of Escrow)
The closing date is the day on which a real estate transaction is formally concluded. This is typically when an attorney will confirm and/or deliver a certificate of title, certificate of abstract, and deed, for which the buyer is billed. During the closing meeting, the buyer signs the mortgage agreement, and the closing costs are paid. In short, the original arrangement stipulated in the agreement of sale is finalized. |
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Closing Costs
"Closing Costs" is an umbrella term, referring to the numerous expenses (in addition to price of the property) incurred by both buyers and sellers during the course of a successful real estate transaction. The buyer's closing costs typically include (but are not necessarily limited to) documentary stamps on notes, deed and mortgage recording, escrow fees, attorney's fees, title insurance, appraisal, inspection and survey charge. The seller's closing costs typically include (but are not necessarily limited to) preparation cost of an abstract of title, documentary stamps on the deed, escrow fees, real estate commission, recording of the mortgage, survey charge and attorney's fees. The agreement of sale, initially negotiated between the buyer and seller, may formally assign responsibility for specific individual closing costs to each party. |
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Cloud (On Title)
A property's legal title is said to have a "cloud" on it when it is known to have a real or potential outstanding claim or encumbrance that adversely affects it's marketability. |
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Co-signer
Borrowers with questionable credit histories or inadequate financial resources may be required to have a third party to co-sign a loan agreement. This person becomes individually and jointly liable for repayment of the loan. |
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Commission
Upon successful completion of a real estate transaction, the real estate agent/broker representing and assisting the seller is compensated by a commission, which is usually derived from a percentage of the final sale price (normally 6%-7% for homes, sales commissions for commercial property may vary depending upon the circumstances). |
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Commitment Period
A loan approval remains valid for a finite time frame, referred to as the "commitment period", during which the borrower must finalize the transaction. |
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Comparative Market Analysis
When attempting to assign a price to a property, the seller may be provided with a written comparative market analysis by his/her real estate agent. This is simply the real estate agent's qualified opinion as to the property's value, along with research documenting recent real estate transactions of similar type and geographical proximity, |
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Condemnation
Condemnation is the process through which a local government exercises the power of eminent domain, and assumes ownership of a property without consent of the owner, but with payment of just compensation. Condemnation may also refer to an official determination by a governmental agency that a building is unsafe or unfit for use. |
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Condominium
A condominium is a housing type in which consists of multiple individual units, with each being individually owned. Ownership of the common areas and facilities is shared, and thus each individual owner is normally charged a monthly maintenance fee. |
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Consideration
A "consideration", in a legal sense, is simply anything of value (cash, assets, services, binding agreements) that may be taken into account when entering into a contract. |
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Construction Loan
During new home creation, a builder may require a short-term, interim loan for financing the cost of construction, with the lender making payments to the builder at periodic intervals as the work progresses. |
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Construction Mortgage
The owner of an existing home may intend to move into a new home that is not yet built. In such cases a mortgage on the existing home may be procured in order to finance the building of the new home. A construction mortgage may also be used fund improvements to existing properties. |
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Contingency
Sometimes a certain condition, called a "contingency", must be satisfied before a contract can be considered legally binding. A common example would be a sales agreement being contingent upon the buyer obtaining financing. |
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Contract of Purchase
A "contract of purchase", is simply another term for "agreement of sale (see agreement of sale). |
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Contractor
The term "contractor" refers to a construction firm or professional who contracts to create buildings or portions of them. Individual tradesmen specializing in specific areas of building construction and maintenance (such as heating, electrical, plumbing, air conditioning, road building, bridge and dam erection, etc) are also called contractors. |
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Conventional Mortgage
Standard mortgage agreements that are not insured by HUD or guaranteed by the Veterans' Administration are called "conventional" mortgages, and are defined solely by terms and conditions established by the lending institution and State statutes (since States have various interest limits, mortgage rates may vary between different lenders and between different States). |
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Conversion Clause
Some Adjustable Rate Mortgages (ARM's) may include a provision called a "conversion clause", which gives the borrower the option to convert the ARM to a fixed rate loan (usually after the first adjustment period, with the new fixed rate is set at the prevailing interest rate for fixed mortgages at that time). There is normally an additional charge for inclusion of such a conversion feature. |
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Cooperative Housing
The residents of an apartment building or group of dwellings may form a corporation. In such a "cooperative housing" arrangement, the title to the property is owned by the corporation, which is governed by a board of directors elected by the stockholders. Ownership of stock in the corporation entitles the holder to occupy a unit in the building or property owned by the cooperative. Thus, residents do not actually own the units they occupy, but instead exercise an absolute right to occupy their units as long as they remain stockholders in the corporation. |
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Credit Report
Prior to granting a loan approval, a prospective lender will determine a borrower' creditworthiness through an examination of the borrower's credit report, which is a documented account of the borrower's available credit history (as compiled by a credit bureau, which is a private, profit-making company). |
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