call option
A provision in the mortgage that gives the mortgagee 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. |
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. |
caveat
A notice given to a legal authority not to do something until the person giving
notice can be heard. |
certificate of acknowledgement
One of two documents that give the property owner the right to sell if dower rights
apply. This document is signed by the non-owner spouse and certifies that the
non-owner spouse consented to the sale of his/her own FREE will. |
certificate of compliance
A stamp issued by the municipality which states that the building complies with
the building location requirements. |
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.
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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." |
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 home buyers. |
closing date
The date on which the title and keys to the property are transferred from the
seller to the buyer, and the money is paid. |
CMHC - Canada Mortgage
and Housing Corporation
Provides mortgage loan insurance to various mortgage lenders. |
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. |
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. |
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." |
common area assessments
Levies against individual unit owners in a condominium or planned unit development
(PUD) project for additional capital to defray homeowners' association costs and
expenses and to repair, replace, maintain, improve, or operate the common areas
of the project. |
common areas
Those portions of a building, land, and amenities owned (or managed) by a planned
unit development (PUD) or condominium project's homeowners' association (or a
co-operative project's co-operative corporation) that are used by all of the unit
owners, who share in the common expenses of their operation and maintenance. Common
areas include swimming pools, tennis courts, and other recreational facilities,
as well as common corridors of buildings, parking areas, means of ingress and
egress, etc. |
common law
An unwritten body of law based on general custom in England and used to an extent
in the United States. |
comparables
An abbreviation for "comparable properties"; used for comparative purposes in
the appraisal process. Comparables are properties like the property under consideration;
they have reasonably the same size, location , and amenities and have recently
been sold. Comparables help the appraiser determine the approximate fair market
value of the subject property. |
compound interest
Interest paid on the original principal balance and on the accrued and unpaid
interest. |
condemnation
The determination that a building is not fit for use or is dangerous and must
be destroyed; the taking of private property for a public purpose through an exercise
of the right of eminent domain. |
condominium
A real estate project in which each unit owner has title to a unit in a building,
an undivided interest in the common areas of the project, and sometimes the exclusive
use of certain limited common areas. |
condominium conversion
Changing the ownership of an existing building (usually a rental project) to the
condominium form of ownership. |
condominium hotel
A condominium project that has rental or registration desks, short-term occupancy,
food and telephone services, and daily cleaning services and that is operated
as a commercial hotel even though the units are individually owned. |
construction loan
A short-term, interim loan for financing the cost of construction. The lender
makes payments to the builder at periodic intervals as the work progresses. |
contingency
A condition that must be met before a contract is legally binding. For example,
home purchasers often include a contingency that specifies that the contract is
not binding until the purchaser obtains a satisfactory home inspection report
from a qualified home inspector. |
contract
An oral or written agreement to do or not to do a certain thing. |
conventional mortgage
A mortgage that is not insured or guaranteed by the federal government. |
convertibility clause
A provision in some adjustable-rate mortgages (ARMs) that allows the borrower
to change the ARM to a fixed-rate mortgage at specified time frames after loan
origination. |
convertible ARM
An adjustable-rate mortgage (ARM) that can be converted to a fixed-rate mortgage
under specified conditions. |
co-operative (co-op)
A type of multiple ownership in which the residents of a multiunit housing complex
own shares in the co-operative corporation that owns the property, giving each
resident the right to occupy a specific apartment or unit. |
co-operative corporation
A business trust entity that holds title to a co-operative project and grants
occupancy rights to particular apartments or units to shareholders through proprietary
leases or similar arrangements. |
co-operative mortgages
Mortgages related to a co-operative project. This usually refers to the multifamily
mortgage covering the entire project but occasionally describes the share loans
on the individual units. |
co-operative project
A residential or mixed-use building wherein a corporation or trust holds title
to the property and sells shares of stock representing the value of a single apartment
unit to individuals who, in turn, receive a proprietary lease as evidence of title.
|
corporate relocation
Arrangements under which an employer moves an employee to another area as part
of the employer's normal course of business or under which it transfers a substantial
part or all of its operations and employees to another area because it is relocating
its headquarters or expanding its office capacity. |
counteroffer
One party’s written response to the other party’s offer during negotiation of
a real estate purchase between buyer and seller. |
covenant
A clause in a mortgage that obligates or restricts the borrower and that, if violated,
can result in foreclosure. |
credit
An agreement in which a borrower receives something of value in exchange for a
promise to repay the lender at a later date. |
credit history
A record of an individual's open and fully repaid debts. A credit history helps
a lender to determine whether a potential borrower has a history of repaying debts
in a timely manner. |
credit life insurance
A type of insurance often bought by mortgagors because it will pay off the mortgage
debt if the mortgagor dies while the policy is in force. |
creditor
A person to whom money is owed. |
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 creditworthiness. See merged credit
report.
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