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Call Option
A right to the future purchase of an item at a specified price.
Cap
Limit on the amount the interest rate or monthly payment may increase for a mortgage loan at a given time.
RELATED MORTGAGE TERMS: Lifetime Payment Cap|Periodic Payment Cap
Capital
Money that is used to make more money.
RELATED MORTGAGE TERMS: Capital Gains
Capital Gains
In real estate transactions it is the profit an individual makes on the sale of their property or building.
RELATED MORTGAGE TERMS: Capital
Cash Flow Option
See Pay Option Adjustable Rate Mortgage
Cash Out Refinance
A refinanced mortgage loan that uses the equity remaining above the original loan amount in exchange for cash. This loan program is an alternative to a home equity line of credit.
RELATED MORTGAGE TERMS: Home Equity Line of Credit (HELOC)
MORTGAGE LOAN EXAMPLES: Cashout Refinance and HELOC Compared
Cash Reserves
See Reserves
Certificate of Eligibility
In real estate terms it is a federal document certifying a veteran as eligible for a VA Mortgage Loan.
RELATED MORTGAGE TERMS: Certificate of Veteran Status|VA Mortgage
MORTGAGE LOAN EXAMPLES: Certificate of Eligibility Request Form
Certificate of Title
Document provided by a title company or attorney that shows an individual to be the legal owner of a given property.
RELATED MORTGAGE TERMS: Title
Certificate of Veteran Status
Federal document used to verify the veteran status of an individual as a qualification for obtaining a VA mortgage.
RELATED MORTGAGE TERMS: Certificate of Eligibility|VA Mortgage
MORTGAGE LOAN EXAMPLES: Certificate of Veteran Status Request Form
Change Frequency
Frequency of time periods where the payment and/or interest rate adjusts in an adjustable rate mortgage.
RELATED MORTGAGE TERMS: Adjustable Rate Mortgage (ARM)
Chapter 7
Type of bankruptcy where debtor's assets are liquidated to pay off creditors.
RELATED MORTGAGE TERMS: Bankruptcy|Chapter 13
MORTGAGE LOAN EXAMPLES: Chapter 7 Legal Code
Chapter 11
Type of bankruptcy that typically reorganizes a corporation or partnership.
MORTGAGE LOAN EXAMPLES: Chapter 11 Legal Code
Chapter 13
Type of bankruptcy provided to individuals with a regular income that allows an individual to keep their property and have their debts adjusted to their income so they can be paid off over an average of three to five years.
RELATED MORTGAGE TERMS: Bankruptcy|Chapter 7
MORTGAGE LOAN EXAMPLES: Chapter 13 Legal Code
Charged Off
Credit debt that has been reported to one or more credit bureaus as uncollectible by a creditor.
Charged Points
See Points
Closing
Meeting where the sale of a property or the refinance of a mortgage loan is completed. Also known as settlement, this step of the loan process includes the notarized signing of a mortgage loan contract and the transfer of title when applicable.
RELATED MORTGAGE TERMS: Closing Costs
Closing Costs
Expenses incurred from the mortgage loan process that are added to the total loan amount. Lender fees, title charges, and recording fees are a few items that are include as part of the total closing costs.
RELATED MORTGAGE TERMS: Closing|Good Faith Estimate (GFE)
MORTGAGE LOAN EXAMPLES: Closing Costs
Closing Date
Date that the mortgage loan transaction completes.
RELATED MORTGAGE TERMS: Closing
CLTV
See Combined Loan to Value
Co-borrower
Other than the borrower, they are any person who has signed a mortgage contract and who is also legally responsible for repaying the loan. In terms of qualifying for a mortgage loan, the co-borrower's credit and income is considered secondary to the borrower's credit and income. Therefore, to obtain the best rate when applying for a mortgage loan the borrower should be the individual who has the higher income, the better credit, or both.
RELATED MORTGAGE TERMS: Borrower|Uniform Residential Loan Application (1003)
COFI
See Cost of Funds Index
Collections
A company, or department within a company, that has been delegated to attempt recovery of payments for past due accounts. Once reported to one or more credit bureaus, an item marked as in collections on a credit report can significantly reduce one's credit score.
RELATED MORTGAGE TERMS: Credit Score
Combined Loan to Value (CLTV)
Ratio of total unpaid mortgage loan amount to property value. An individual with a mortgage loan balance of $40,000, a home equity line of credit balance of $20,000, and a home appraised at $100,000 would have a combined loan to value (CLTV) of 60%.
RELATED MORTGAGE TERMS: Appraisal|Balance|Home Equity Line of Credit (HELOC)|Loan to Value (LTV)
MORTGAGE LOAN EXAMPLES: Combined Loan to Value (CLTV)
Commission
In real estate terms it is the compensation paid to a loan officer, mortgage broker, or real estate agent.
RELATED MORTGAGE TERMS: Loan Officer (LO)|Mortgage Broker|Real Estate Agent
Common Stock
Asset representing ownership in a corporation, but legally has no definite value.
MORTGAGE LOAN EXAMPLES: Common Stock
Compound Interest
Interest accumulating based on an amount that includes the original principal balance plus the unpaid accrued interest.
RELATED MORTGAGE TERMS: Principal Balance
MORTGAGE LOAN EXAMPLES: Compound Interest
Condemned Property
Property that has been deemed unusable by the government.
MORTGAGE LOAN EXAMPLES: Condemned Home
Condition to Funding
Requirement that needs to be met in order for a mortgage loan to close.
RELATED MORTGAGE TERMS: Closing
MORTGAGE LOAN EXAMPLES: Condition to Funding
Condominium (Condo)
Type of property where the space that is owned is part of a multi-unit building. Owners of condominium collectively own common areas of the entire property to which they are all financially responsible for.
RELATED MORTGAGE TERMS: Townhouse (THOUSE)
MORTGAGE LOAN EXAMPLES: Condominium
Condominium Rider
Document used to amend provisions in the note for a mortgage loan of a condominium.
MORTGAGE LOAN EXAMPLES: Condominium Rider
Conforming Mortgage
Mortgage loan that meets requirements for eligibility to be purchased by Fannie Mae or Freddie Mac.
RELATED MORTGAGE TERMS: Fannie Mae (FNMA)|Freddie Mac (FHLMC)
Construction Financing
Loan program for a borrower who is adding a building to their property.
Construction Loan
Interim mortgage loan used to construct a building. Typically a mortgage lender funds the loan amount in stages as construction progresses.
MORTGAGE LOAN EXAMPLES: Construction Mortgage Loan
Consumer Price Index (CPI)
Index for the cost of living as determined by the Bureau of Labor Statistics
MORTGAGE LOAN EXAMPLES: Consumer Price Index (CPI)
Consumer Reporting Agency
Company that a mortgage loan lender or broker may use to obtain credit reports with a full credit history for a prospective borrower.
RELATED MORTGAGE TERMS: Credit History|Credit Report
Contract to Purchase
See Agreement of Sale
Conventional Mortgage
Private sector mortgage loan that is not guaranteed or insured by the federal government.
Conversion Clause
Provision in a convertible adjustable rate mortgage that allows the loan to be converted to a fixed rate mortgage at specified times.
RELATED MORTGAGE TERMS: Adjustable Rate Mortgage (ARM)|Convertible Mortgage|Fixed Rate Mortgage (FRM)
Conversion Option
See Conversion Clause
Convertible Mortgage
Adjustable rate mortgage loan containing a conversion clause or conversion option that allows the loan program to be changed to a fixed rate mortgage at specified times.
RELATED MORTGAGE TERMS: Adjustable Rate Mortgage (ARM)|Conversion Clause|Fixed Rate Mortgage (FRM)
Cooperative (CO-OP)
Multiple individuals that have ownership of a corportation which owns a building where each shareholder owns a portion of that building.
Co-signer
Individual who assumes responsibility for a loan that is not their own in the event that the borrowing person defaults on the loan payments.
Cost of Funds Index (COFI)
Yield index based on the cost of funds to institutions in the San Francsico Federal Bank District that is used commonly to set the rate of adjustable rate mortgages.
Cost of Savings Index (COSI)
Interest rate index sometimes used determine the change in interest rate for an adjustable rate mortgage.
RELATED MORTGAGE TERMS: Adjustable Rate Mortgage (ARM)
Credit Authorization
Disclosure that officially authorizes a lender to request a credit report from a consumer reporting agency.
RELATED MORTGAGE TERMS: Consumer Reporting Agency|Credit Report
MORTGAGE LOAN EXAMPLES: Credit Authorization Disclosure
Credit Bureau
Company that collects information from creditors about their borrowers concerning the status of credit debt. Equifax, Experian (formerly TRW), and Transunion are the three major credit bureaus that most consumer reporting agency compile their credit reports from.
RELATED MORTGAGE TERMS: Consumer Reporting Agency|Credit Report
Credit History
Record of an individual's credit use over time that is held by credit bureaus.
RELATED MORTGAGE TERMS: Credit Bureau|Credit Report
Credit Rating
See Credit Score
Credit Report
Document provided usually by a consumer reporting agency that contains an individual's recorded credit history which includes items such as mortgage loan balances, credit debt balances, and employment history.
RELATED MORTGAGE TERMS: Consumer Reporting Agency|Credit Authorization|Credit Bureau|Credit History|Credit Score
MORTGAGE LOAN EXAMPLES: Credit Report
Credit Score
Number generally between 300 and 850 that is determined by a credit bureau which reflects an individual's credit history.RELATED MORTGAGE TERMS: Credit Bureau|Credit Report|FICO Score
Cumulative Interest
Total interest payments over the life of a loan.
RELATED MORTGAGE TERMS: Interest

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