Mortgage Glossary - C
Definitions of Mortgage Terms
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- Cancellation Clause - A provision in a lease or other contract that spells out under what conditions the parties can call off the deal.
- Cash Out Refinance- When a borrower refinances his mortgage at a higher amount than the current loan balance with the intention of pulling out money for personal use, it is referred to as a "cash out refinance."
- Certificate of Title - A certificate issued by a title company that confirms that the seller has marketable and insurable title to the property which he is offering for sale.
- Closing - This has different meanings in different states. In some states a real estate transaction is not consider "closed" until the documents record at the local recorders office. In others, the "closing" is a meeting where all of the documents are signed and money changes hands.
- Closing Costs - Closing costs are separated into what are called "non-recurring closing costs" and "pre-paid items." Non-recurring closing costs are any items which are paid just once as a result of buying the property or obtaining a loan. "Pre-paid" are items which recur over time, such as property taxes and homeowners insurance. A lender makes an attempt to estimate the amount of non-recurring closing costs and prepaid items on the Good Faith Estimate which they must issue to the borrower within three days of receiving a home loan application.
- 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 deed, release, or court action.
- Compound Interest - Interest that is determined by adding the interest earned in the current period to the principal and computing the next period's interest on this "compounded" total amount.
- Conditional Committment - A promise by a lender to make a loan if the borrower meets certain requirements.
- Construction to Permanent 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
- Consumer Credit Counseling Service - A service that offers counseling about how to work out a realistic budget and debt repayment plan and work with creditors. The goal is to ensure that debts are paid back over time.
- 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.
- Contingent Fee - A fee that is paid if a specified event occurs
- Contract for Deed - An agreement for sale of property in which the buyer takes possession while making payments, but the seller holds title until full payment is made. Also called a land contract.
- Contract to Purchase - A document in which a property's buyer and seller approve the price and other terms of the transfer of title. Also known as an agreement of sale, a purchase contract or a sale contract.
- Coventional Loan or Conventional Financing - A mortgage that is not insured or guaranteed by a government agency such as the Federal Home Administration (FHA) or Veterans Administration (VA).
- Conventional Mortgage - Refers to home loans other than government loans (VA and FHA).
- Conversion Clause - A provision that may appear in an adjustable-rate loan agreement allowing the loan to be changed to a fixed-interest rate loan, usually for an additional charge.
- Convertible ARM - An adjustable-rate mortgage that allows the borrower to change the ARM to a fixed-rate mortgage within a specific time.
- Convertible Mortgage - An adjustable-rate home loan which the borrower has the option at specified times of changing into a fixed-rate loan.
- Cooperating Broker - A real-estate broker who finds a buyer for a property and initiates a negotiation and shares in a commission.
- Cooperative Mortgage - A type of multiple ownership in which the residents of a multiunit housing complex own shares in the cooperative corporation that owns the property, giving each resident the right to occupy a specific apartment or unit.
- Credit Score - A number, roughly between 300 and 800, that reflects the credit history detailed by a person's credit report. Lenders calculate this number with the assistance of computer systems as part of the process of assigning rates and terms to the loans they make.
- Credit Scoring System - A numerical system designed to measure the likelihood that a borrower will repay a debt created by assigning scores to various characteristics connected to creditworthiness.