Understand the most important lending and mortgage terms. Mortgages can be confusing for the first time home buyer, so let us help explain. Below you'll find explanations for most of the mortgage industry terms.
What is 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…
What is Caps (Payment)?
Consumer safeguards may limit the amount monthly payments on an adjustable-rate mortgage may change. Because they do not limit the amount of interest the lender is earning, they may cause negative…
What is Cashier’s check (or bank check)?
A check whose payment is guaranteed because it was paid for in advance and is drawn on the bank's account instead of the…
What is Certificate of eligibility?
Document issued by the Veterans' Administration to qualified veterans that entitles them to VA guaranteed loans. This certificate can be obtained through local VA office by submitting form DD-214…
What is Certificate of title?
Written opinion of the status of title to a property, given by an attorney or title company. This certificate does not offer the protection given by title…
What is Certificate of veteran status?
Document given to veterans or reservists who have served 90 days of continuous active duty (including training time) which enables them to obtain lower down payments on certain FHA-insured loans.…
What is Closing costs?
Fees incurred in a real estate or mortgage transaction and paid by borrower and/or seller during a mortgage loan closing. These typically include a loan origination fee, discount points, attorney's…
What is Collection?
The process of bringing a delinquent debt current and the filing of the necessary notices to proceed with repossession or foreclosure when…
What is Combined loan-to-value (CLTV)?
The ratio of the total mortgage liens against the subject property to the lesser of either the appraised value or the sales…
What is Condominium?
A form of property ownership in which the homeowner holds title to an individual dwelling unit and an interest in common areas and facilities of a multi-unit…
What is Conforming loan?
A mortgage loan under the maximum amount of loans that FNMA and FHLMC are legally allowed to buy. Maximum loan amount varies by…
What is Consumer Reporting Agency (or Bureau)?
An organization that handles the preparation of reports used by lenders to determine a potential borrower's credit history. The agency gets data for these reports from a credit repository and from…
What is Conversion clause?
A provision in some ARMs allowing you to change an ARM to a fixed-rate loan, usually after the first adjustment period. The new fixed rate is set at current rates, and there may be a charge for the…
What is Conversion option?
Many "short-term" ARM products feature a conversion option. This option allows a consumer, subject to certain restrictions, to convert the loan from an adjustable to a fixed-rate…
What is Cost of funds index (COFI)?
An index of the weighted-average interest rate paid by savings institutions for sources of funds, usually by members of the 11th Federal Home Loan Bank…
What is Credit Risk Score?
A credit score measures a consumer's credit risk relative to the rest of the U.S. population, based on the individual's credit usage history. The credit score most widely used by lenders is the…