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Cap. A provision of an adjustable rate mortgage limiting how much the interest rate of mortgage payments may increase.
Cash reserve. A requirement of some lenders that buyers have sufficient cash remaining after closing to make the first two mortgage payments.
Certificate of title. A document rendering an opinion on the status of a property’s title based on public records.
Clear title. A title that is free of liens and legal questions as to ownership of the property.
Closing costs. Expenses (over and above the price of the property) incurred by buyers and sellers tin transferring ownership of a property. Also called “settlement costs.”
Closing. The occasion where a sale is finalized; the buyer signs the mortgage and closing costs are paid. Also called “settlement.”
Cloud. A claim to the title of a property that, if valid, would prevent a purchaser from obtaining a clear title.
Commitment fee. A fee charged when a) an agreement is reached between a lender and a borrower for a loan a at a specific rate and points and b) the lender guarantees to lock in that rate.
Commitment letter. A formal offer by a lender stating the terms under which it agrees to loan money to a home buyer.
Co-mortgagor. One who is individually and jointly obligated to repay a mortgage loan and shares ownership of the property with one or more borrowers. See co-signer.
Condominium. A form of property ownership in which the homeowner holds title to an individual dwelling unit plus an interest in common areas of a multi-unit project.
Construction loan. A short-term loan financing improvements to real estate, such as the building of a new home. The lender advances funds to the borrower as needed while construction progresses. Upon completion of construction the borrower must obtain permanent financing or repay the construction loan in full.
Contingency. A condition that must be met before a contract is legally binding.
Conventional mortgage. Any mortgage that is not insured or guaranteed by the federal government.
Convertible ARM. An adjustable rate mortgage that can be converted to a fixed rate mortgage under specified conditions.
Cooperative. A form of common property ownership in which the residents of an apartment building do not own their own units, but rather own shares in the corporation that owns the property.
Covenant. A clause in a mortgage that obligates or restricts the borrow and which, if violated, can result in foreclosure.
Co-signer. A person who is obligated to repay a mortgage should the borrower default but does not share ownership in the property. See co-mortgagor.
CRA. Community Reinvestment Act. A federal law that requires federally chartered banks to demonstrate their commitment to making credit available and promoting affordable housing. Makes red lining illegal.
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 credit worthiness.
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