The HSH Mortgage Glossary C
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The Mortgage Glossary Index:
Caps are limits on the amount that the interest rate on an Adjustable Rate Mortgage can change at any one adjustment and (usually) over the life of the loan. They protect the borrower from huge increases in the monthly payment in a rising interest rate environment. Rarely, a cap may apply to the payment amount rather than to the rate. Under certain conditions, payment caps can cause the loan balance to increase rather than decrease. See Negative Amortization
The total costs and fees associated with closing. Includes one-time non-recurring fees and charges for inspections and other services, and (usually) initial escrows for recurring costs such as property taxes and insurance.
See Settlement Statement
CODI (Cost of Savings Index)
An index used on some Adjustable Rate Mortgages (ARMs). See this page for more information.
The semi-formal process used by lenders in contacting borrowers in an effort to bring a loan current. In the case of a mortgage, the mailing and formal recording of certain documents which may be required to foreclose on a property.
A promise by a lender to make a loan within a specified time period, subject to compliance with stated conditions. The lender's obligation expires if the borrower does not close the loan prior to the expiration date of the commitment.
Common Area Assessments
Fees paid (usually) to an Owners Association Fees by the owners of the individual units in a condominium or cooperative which are used to maintain the property and common areas.
Community Home Buyers Programs
A series of low-income loan programs offered under Fannie Mae and Freddie Mac auspices. These generally require only 3 - 5% down but do require PMI (Private Mortgage Insurance).
A form of ownership in real property where the owners have title to only of an apartment or townhouse. The common areas and the building exteriors are owned jointly. All owners have generally rights to all common areas.
Usually refers to the process of converting a property from rental to either a condominium or cooperative property. Tenants generally have a first right of purchase for the unit they occupy.
A loan used to finance construction of a new home and, sometimes, the land for a home. Depending on local custom, a construction loan may a permanent mortgage with funds disbursed as construction proceeds, or may be a short-term loan that must be repaid on completion.
A form of ownership in which the residents own shares in a corporation which owns the entire property. Shareholders are entitled to occupy a specific apartment and to have use of the common areas.
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