Mortgage and Real Estate Terms Sorted Alphabetically:
C - caps, cash flow, cash out (second mortgage), cash
out refinance…more
CAPS - consumer safeguards for adjustable
rate mortgages that limit the amount monthly payments
can increase. An interest rate cap limits the amount
the interest can change, while a payment cap limits
the increase in monthly payment to a specific dollar
amount.
CASH FLOW - the amount of money you have available
after monthly debt-servicing.
CASH OUT SECOND MORTGAGE - to turn some of your home’s
equity into cash through a home
equity loan; this is to use the financial power
in your house as an investment vehicle in addition
to a "home" for you and your family.
CASH OUT REFINANCE - a first
mortgage
refinance transaction in which the amount of money
received from the new loan, exceeds the total of the
money needed to repay the existing mortgage(s) plus
the closing costs of the new loan. In other words,
a refinance transaction in which the borrowers receive
additional cash, which is used for any lawful purpose.
CHAIN OF TITLE - a history of the documents which
have transferred title to a parcel of real property,
from the original owner to the present owner.
CLOSING - the event of getting all paperwork appropriately
recorded in the official County Recorders office,
for the County in which the real property is located.
A purchase transaction, the meeting between the buyer,
seller and lender (or their agents) where the property
and funds legally change hands. Also called settlement.
CLOSING COSTS - the costs and fees associated with
obtaining your mortgage that are assessed at the closing
or settlement. "Closing Costs" normally
are itemized and charged per item (except for the
origination and/or discount POINTS), they are usually
billed by outside non-affiliated vendor/suppliers
to the transaction. They often can include charges
and fees for escrow, legal & title insurance,
notary, tax service and flood certification fees,
underwriting, credit report, processing, document
preparation, photo inspection, real estate appraisal,
appraisal review, administration fees, courier, wire
transfer fees, recording fees, warehouse fee, insurance,
administration fees, taxes and other fees. These can
easily average $2,300 or more per transaction, depending
on the type and size of your loan. There's No Free
Lunch - there's a lot of vendor/suppliers involved
with residential real estate mortgage loans.** SEE
'POINTS' AND 'GOOD FAITH ESTIMATE' **
CLOUD ON TITLE - any condition revealing in a title
search that adversely effects the title to the real
property. Usually a 'cloud on title' will require
some legal action to clear up the problem, i.e.: a
deed, release or other recorded document.
COLLATERAL- the real property offered as security
for a loan.
COMBINED LTV - the way a lender calculates the (C)LTV
on a home equity loan; it is based on the sum of the
debts on both mortgages, compared to the fair market
value of your home. Up to 80% is common, above that
percentage costs and fees paid can be a bit higher.
COMMON AREA - an area owned by the owners or tenants
of a condominium complex, or subdivision for the common
use of residents; i.e.: clubhouse, pool, green belt
areas.
COMMUNITY PROPERTY - in some states, a form of ownership
under which property acquired during a marriage is
presumed to be owned jointly, unless acquired as separate
property of either spouse. CO-MORTGAGOR - a second
borrower, who signs a mortgage loan with a mortgagor.
The co-mortgagor's credit history, income, assets,
and debts are combined with the mortgagor's for underwriting
and ration analysis purposes. The co-mortgagor must
also hold title to the property.
COMPARABLES - properties used for comparative purposes
in the appraisal process, that have similar characteristics
to the subject property. Also referred to as "comps."
CONDITIONS, COVENANTS AND RESTRICTIONS (CC&Rs)
- a recorded document stating the specific conditions
that run concurrently with the land.
CONDOMINIUM - a form of real property ownership whereby
the purchaser receives title to the interior space
of a unit, in a multi-unit structure and a proportional
interest in common areas. The size of each unit is
measured from the interior surfaces (exclusive of
paint and other finishes of the exterior walls, floors
and ceiling (air space).
CONFORMING AND NON-CONFORMING LOANS - types of loans
available to different categories of borrowers. Conforming
loans follow strict guidelines for eligibility as
to loan sizes, credit score, rates, income and residence
stability, savings and reserves habits etc. Non-conforming
loans fall outside of the eligibility guidelines established
for conforming lending. These may include bad
credit mortgage financing alternatives.
COVENANT - a legally enforceable promise or restriction
in a mortgage. For example, the borrower may covenant
to keep the property in good repair, and adequately
insured against fire and other casualties. A breach
of a covenant in a mortgage usually creates a default
as defined by the mortgage and can be the basis for
foreclosure. CONVEY - the act of transferring title
to real property from one party to another.
COOPERATIVE (CO-OP) - in real estate, a form of multiple
ownership in which a corporation or business trust
entity holds title to a property (usually an apartment
complex), and grants occupancy rights to shareholder
tenants through proprietary leases. Also called co-ops
in many areas. CREDIT RATING - a level assigned to
you in determining your eligibility for loans based
on your record of payment on financial obligations,
your income level, and the amount of available collateral.
CREDIT REPORT - a report that documents a borrower's
credit history and current status, published by three
credit repositories. Pursuant to the Federal Fair
Credit Reporting Act (formerly Title VI CCCP) borrowers
can obtain a copy of their credit report from the
credit repository facility (NOT from a lender or loan
agent/ banker) and examine their own credit report.
A borrower has rights to view their own individual
and personal report run only through the credit repositories,
not a potential credit grantor. No one in the lending
cycle is lawfully allowed to give you a copy of it
or let you view it. Contact the "bureaus"
(800/685-1111, 800/682-7654, 800/888-4213), they have
toll-free telephone numbers, websites, and they're
responsive. PLUS if there are errors, only they can
fix them - and by law they MUST. CREDIT SCORES - the
three major credit repositories Experian, TransUnion,
and Equifax have a score ranking level assigned to
each customer in their credit files. This "score"
is their version of who's more, and who's a less risky
loan candidate. All three are different, different
amounts, different numbers, and they are compiled
from different ingredients. The "math" they
use is their conclusion as to the "risk in advancing
credit to a particular individual" -- their opinions
differ. These scores can change daily, and sometimes
in a major way at month end as well. If you heard
one of your three "numbers" (scores) from
somebody last week, although it could still be "close"
to that number now, actually it means nothing today
to a new lender! Most lenders and loan bankers utilize
the middle score out of the three (but many of the
newer funding programs use the "primary repository"
instead), for the primary income earner (the potential
loan individual who earns the most money). After more
than 30 years of computerized study (visit the inventor
of FICO "scores") and millions of borrowers
tested and tracked, it has been scientifically shown
that a medium score at 600, means the lender will
lose money on one out of every eight loans it makes.
A score of 700 for example, means the lender will
lose money on one out of every 1,293 loans it makes!
If YOU were a lender and had the opportunity to make
all that "interest" (or not), what score
would you want from customers that YOU made loans
to with your own money??
CREDITWORTHINESS - your credit history, which contains
information about your borrowing habits and money-management
skills, and which determines a lender's decision about
what level "risk," or credit grade, to assign
you - or even whether the loan should be made.
Mortgage Glossary - Mortgage and Real Estate Terms Sorted Alphabetically:
Mortgage
Glossary
A
- adjustable rate mortgage, adjustment interval, amortization,
annual percentage rate (APR) - more
B
- balloon mortgage, bankruptcy, basis point, beneficiary
- more
C
- caps, cash flow, cash out (second mortgage), cash
out refinance - more
D
- debt consolidation, debt service, debt reduction
plan, debt-to-income ratio - more
E
- earned and unearned income, earnest money, easement,
economic life - more
F
- Fair Credit Reporting Act, fair market value, Fannie
Mae - more
G
- good faith estimate, grace period, gradual payment
mortgage (GPM), grantee - more
H
- home equity, home improvement loan, Home Mortgage
Disclosure Act (HMDA) - more
I
- index, in file credit report, inflation, initial
interest rate, ingress and egress - more
L
- lender buy-down mortgage, liability insurance, LIBOR,
loan application - more
M
- manufactured home, market value, maximum loan amount,
mechanic's liens - more
N
- negative amortized (Neg/AM), Neg AM Loans, negative
cash flow, net worth - more
O
- obsolescence, off-site improvements, on-site improvements,
ordinary income - more
P
- par, partial payment, partnership, party wall, payment
shock - more
Q
- quality control, quit claim deed, quote - more
R
- rate shopper, real property, real estate loans,
reconciliation - more
S
- sales contract, satisfaction or mortgage, seasoned
mortgage, second mortgage - more
T
- tax lien, tenancy in common, tenant, term, title,
title insurance - more
U
- underwriting, unencumbered property, uniform commercial
code (UCC)ï -more
V
- VA (Department of Veterans Affairs) Mortgage, vacancy
rate, VA funding fee - more
