C1
call option
A provision in the mortgage that gives the mortgagee (the lender) the right to call the mortgage due
and payable at the end of a specified period for whatever reason.
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.
capital
(1) Money used to create income, either as an investment in a business or an income property. (2) The
money or property comprising the wealth owned or used by a person or business enterprise. (3) The
accumulated wealth of a person or business. (4) The net worth of a business represented by the
amount by which its assets exceed liabilities.
capital expenditure
The cost of an improvement made to extend the useful life of a property or to add to its value.
capital improvement
Any structure or component erected as a permanent improvement to real property that adds to its value
and useful life.
cash-out refinance
A refinance transaction in which the amount of money received from the new loan exceeds the total of
the money needed to repay the existing first mortgage, closing costs, points and the amount required to
satisfy any outstanding subordinate mortgage liens. In other words, a refinance transaction in which the
borrower receives additional cash that can be used for any purpose.
certificate of deposit
A document written by a bank or other financial institution that is evidence of a deposit, with the issuer's
promise to return the deposit plus earnings at a specified interest rate within a specified time period.
See adjustable rate mortgage (ARM).
certificate of deposit index
An index that is used to determine interest rate changes for certain adjustable-rate mortgage (ARM)
plans. It represents the weekly average of secondary market interest rates on six-month negotiable
certificates of deposit. See adjustable-rate mortgage.
Certificate of Eligibility
A document issued by the federal government certifying a veteran's eligibility for a Department of
Veterans Affairs (VA) mortgage.
Certificate of Reasonable Value (CRV)
A document issued by the Department of Veterans Affairs (VA) that establishes the maximum value and
loan amount for a VA mortgage.
certificate of title
A statement provided by an abstract company, title company, or attorney stating that the title to real
estate is legally held by the current owner.
chain of title
The history of all of the documents that transfer title to a parcel of real property, starting with the
earliest existing document and ending with the most recent.
change frequency
The frequency (in months) of payment and/or interest rate changes in an adjustable-rate mortgage
(ARM).
chattel
Another name for personal property.
clear title
A title that is free of liens or legal questions as to ownership of the property.
closing
A meeting at which a sale of a property is finalized by the buyer signing the mortgage documents and
paying closing costs. Also called "settlement." At this meeting, ownership of the property is transferred
from the seller to the buyer.
closing cost item
A fee or amount that a home buyer must pay at closing for a single service, tax, or product. Closing
costs are made up of individual closing cost items such as origination fees and attorney's fees. Many
closing cost items are included as numbered items on the HUD-1 statement.
closing costs
Expenses (over and above the price of the property) incurred by buyers and sellers in transferring
ownership of a property. Closing costs normally include an origination fee, an attorney's fee, taxes, an
amount placed in escrow and charges for obtaining title insurance and a survey. Closing costs
percentage will vary according to the area of the country; lenders or REALTORS® often provide
estimates of closing costs to prospective homebuyers.
closing statement
See HUD-1 statement.
cloud on title
Any conditions revealed by a title search that adversely affect the title to real estate. Usually clouds on
title cannot be removed except by a quitclaim deed, release, or court action.
coinsurance
A sharing of insurance risk between the insurer and the insured. Coinsurance depends on the
relationship between the amount of the policy and a specified percentage of the actual value of the
property insured at the time of the loss.
coinsurance clause
A provision in a hazard insurance policy that states the amount of coverage that must be maintained --
as a percentage of the total value of the property -- for the insured to collect the full amount of a loss.
collateral
An asset (such as a car or a home) that guarantees the repayment of a loan. The borrower risks losing
the asset if the loan is not repaid according to the terms of the loan contract.
collection
The efforts used to bring a delinquent mortgage current and to file the necessary notices to proceed
with foreclosure when necessary.
co-maker
A person who signs a promissory note along with the borrower. A co-maker's signature guarantees that
the loan will be repaid, because the borrower and the co-maker are equally responsible for the
repayment. See endorser.
commission
The fee charged by a broker or agent for negotiating a real estate or loan transaction. A commission is
generally a percentage of the price of the property or loan.
commitment letter
A formal offer by a lender stating the terms under which it agrees to lend money to a home buyer. Also
known as a "loan commitment."
call option
A provision in the mortgage that gives the mortgagee (the lender) the right to call the mortgage due
and payable at the end of a specified period for whatever reason.
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.
capital
(1) Money used to create income, either as an investment in a business or an income property. (2) The
money or property comprising the wealth owned or used by a person or business enterprise. (3) The
accumulated wealth of a person or business. (4) The net worth of a business represented by the
amount by which its assets exceed liabilities.
capital expenditure
The cost of an improvement made to extend the useful life of a property or to add to its value.
capital improvement
Any structure or component erected as a permanent improvement to real property that adds to its value
and useful life.
cash-out refinance
A refinance transaction in which the amount of money received from the new loan exceeds the total of
the money needed to repay the existing first mortgage, closing costs, points and the amount required to
satisfy any outstanding subordinate mortgage liens. In other words, a refinance transaction in which the
borrower receives additional cash that can be used for any purpose.
certificate of deposit
A document written by a bank or other financial institution that is evidence of a deposit, with the issuer's
promise to return the deposit plus earnings at a specified interest rate within a specified time period.
See adjustable rate mortgage (ARM).
certificate of deposit index
An index that is used to determine interest rate changes for certain adjustable-rate mortgage (ARM)
plans. It represents the weekly average of secondary market interest rates on six-month negotiable
certificates of deposit. See adjustable-rate mortgage.
Certificate of Eligibility
A document issued by the federal government certifying a veteran's eligibility for a Department of
Veterans Affairs (VA) mortgage.
Certificate of Reasonable Value (CRV)
A document issued by the Department of Veterans Affairs (VA) that establishes the maximum value and
loan amount for a VA mortgage.
certificate of title
A statement provided by an abstract company, title company, or attorney stating that the title to real
estate is legally held by the current owner.
chain of title
The history of all of the documents that transfer title to a parcel of real property, starting with the
earliest existing document and ending with the most recent.
change frequency
The frequency (in months) of payment and/or interest rate changes in an adjustable-rate mortgage
(ARM).
chattel
Another name for personal property.
clear title
A title that is free of liens or legal questions as to ownership of the property.
closing
A meeting at which a sale of a property is finalized by the buyer signing the mortgage documents and
paying closing costs. Also called "settlement." At this meeting, ownership of the property is transferred
from the seller to the buyer.
closing cost item
A fee or amount that a home buyer must pay at closing for a single service, tax, or product. Closing
costs are made up of individual closing cost items such as origination fees and attorney's fees. Many
closing cost items are included as numbered items on the HUD-1 statement.
closing costs
Expenses (over and above the price of the property) incurred by buyers and sellers in transferring
ownership of a property. Closing costs normally include an origination fee, an attorney's fee, taxes, an
amount placed in escrow and charges for obtaining title insurance and a survey. Closing costs
percentage will vary according to the area of the country; lenders or REALTORS® often provide
estimates of closing costs to prospective homebuyers.
closing statement
See HUD-1 statement.
cloud on title
Any conditions revealed by a title search that adversely affect the title to real estate. Usually clouds on
title cannot be removed except by a quitclaim deed, release, or court action.
coinsurance
A sharing of insurance risk between the insurer and the insured. Coinsurance depends on the
relationship between the amount of the policy and a specified percentage of the actual value of the
property insured at the time of the loss.
coinsurance clause
A provision in a hazard insurance policy that states the amount of coverage that must be maintained --
as a percentage of the total value of the property -- for the insured to collect the full amount of a loss.
collateral
An asset (such as a car or a home) that guarantees the repayment of a loan. The borrower risks losing
the asset if the loan is not repaid according to the terms of the loan contract.
collection
The efforts used to bring a delinquent mortgage current and to file the necessary notices to proceed
with foreclosure when necessary.
co-maker
A person who signs a promissory note along with the borrower. A co-maker's signature guarantees that
the loan will be repaid, because the borrower and the co-maker are equally responsible for the
repayment. See endorser.
commission
The fee charged by a broker or agent for negotiating a real estate or loan transaction. A commission is
generally a percentage of the price of the property or loan.
commitment letter
A formal offer by a lender stating the terms under which it agrees to lend money to a home buyer. Also
known as a "loan commitment."
| Real Estate and Loan Glossary of Terms |
| Capital Real Estate and Loans Nannette Truong Kazan, Broker-Real Estate Specialist |
| Cell: 714 478-4940 |
| Fax: 949 266-8911 |
| Office: 949 679-3400 |
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