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The HSH Mortgage Glossary C

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To view a linked word list, View the Summary

The Mortgage Glossary Index:

A-B C D-E F-I J-M N-P Q-S T-Z

Caps
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

Cash Out Refinance
The process of refinancing for an amount higher than the balance due, assuming the property has a sufficiently high value.

Certificate of Eligibility
A document required for a VA guaranteed loan. It is obtained through any local VA office on presentation of a DD-214 Separation Paper.

Certificate of Reasonable Value (CRV)
Used for VA loans only, a certificate issued by the Veterans Administration verifying the appraisal.

Closing
A meeting between the buyer, seller, and lender where the property and funds legally change hands. Called a Settlement in some states.

Closing Costs
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.

Closing Statement
See Settlement Statement

CODI (Cost of Savings Index)
An index used on some Adjustable Rate Mortgages (ARMs). See this page for more information.

Collateral
An asset used to secure a loan. It can be seized by a lender if the borrower defaults.

Collection
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.

Commission
The fee paid to brokers, attorneys, and others for their services.

Commitment
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
Those portions of a building, land, and amenities in condominium and cooperative projects which are used the apartment owners. The hallways, parking areas, and other amenities.

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).

Comparables
Recent sales of similar properties in the area. Used as a measure local market value to help set the current value of a property.

Condominium
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.

Conversion
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.

Construction Loan
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.

Contingency
A condition which must be met before a contract is binding. For example, a requirement that an existing lien on the property must be cleared by a certain date.

Conventional Mortgage
A loose term which generally refers to a fixed-rate conforming loan other than an FHA or VA loan.

Convertible ARM
An Adjustable-Rate mortgage with a borrower's option to convert to a fixed-rate mortgage under specified conditions.

Cooperative (co-op)
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.

COFI (Cost of Funds Index)
An index produced by the 11th District Federal Home Loan Bank. One of several indexes used to set interest rate changes for certain Adjustable-Rate Mortgages.

COSI (Cost of Savings Index)
An index used on Adjustable Rate Mortgages (ARMs) originated by World Savings, which was taken over by Wachovia Savings, which is slated to merge into Wells Fargo Bank.

Credit Report
A report of an individual's credit history used by lenders to determine credit risk. A record of an individual's repayment of debt.

CRV
See Certificate of Reasonable Value (CRV)

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