Mortgage Glossary, Loan
Terms and Economic Terms for Interest Only Loans
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Mortgage Glossary - C Terms
Cap: a limit, such as that placed
on an adjustable rate mortgage, on how much a monthly payment or
interest rate can increase or decrease.
Cash reserves: a cash
amount sometimes required to be held in reserve in addition to the
down payment and closing costs; the amount is determined by the
lender.
Certificate of title: a
document provided by a qualified source (such as a title company)
that shows the property legally belongs to the current owner; before
the title is transferred at closing, it should be clear and free
of all liens or other claims.
Closing: also known as settlement,
this is the time at which the property is formally sold and transferred
from the seller to the buyer; it is at this time that the borrower
takes on the loan obligation, pays all closing costs, and receives
title from the seller.
Closing costs: customary
costs above and beyond the sale price of the property that must
be paid to cover the transfer of ownership at closing; these costs
generally vary by geographic location and are typically detailed
to the borrower after submission of a loan application.
Commission: an amount,
usually a percentage of the property sales price, that is collected
by a real estate professional as a fee for negotiating the transaction..
Condominium: a form
of ownership in which individuals purchase and own a unit of housing
in a multi-unit complex; the owner also shares financial responsibility
for common areas.
Conventional loan: a
private sector loan, one that is not guaranteed or insured by the
U.S. government.
Cooperative (Co-op): residents
purchase stock in a cooperative corporation that owns a structure;
each stockholder is then entitled to live in a specific unit of
the structure and is responsible for paying a portion of the loan.
Credit history: history
of an individual's debt payment; lenders use this information to
gouge a potential borrower's ability to repay a loan.
Credit report: a record
that lists all past and present debts and the timeliness of their
repayment; it documents an individual's credit history.
Credit bureau score: a
number representing the possibility a borrower may default; it is
based upon credit history and is used to determine ability to qualify
for a mortgage loan.
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