Terms starting with the letter C

• A periodic cap limits how much the rate can increase at each adjustment period.  
• A lifetime cap limits how much the rate can increase during the term of the loan.  
• A payment cap, limits how much the monthly payment may increase.  See Payment Cap for detailed provisions of this type of cap. 

Carryback Loan
A loan in which a seller agrees to finance a buyer in order to complete a property sale.

Cash Needed
The total dollar amount required for payment of closing costs and down payment.

Cash Out Refinance
A mortgage loan that allows the borrower to pay off an existing debt and obtain excess money from the equity of their home for payment of closing costs and additional funds for personal needs (i.e., college tuition, home improvement, remodel home, purchase automobile and etc).

Cash Reserve
Sufficient cash remaining after closing to make the first two mortgage payments and two months of long-term debts.

Caveat Emptor
"Let the purchaser beware."  The buyer is duty-bound to examine the property he or she is purchasing and he or she assumes conditions which are readily known upon view.  The seller is under no obligation to disclose defects but may not actively conceal a known defect or lie if asked.

CC&R's
Covenants, conditions, and restrictions.  The basic rules establishing the rights and obligations of owners of real property within a subdivision or other tract of land in relation to other owners within the same subdivision or tract and in relation to an association of owners organized for the purpose of operating and maintaining property commonly owned by the individual owners.

Certificate of Eligibility (COE)
The document given to qualified veterans which entitles them to VA guaranteed loans for homes, business, and mobile homes. Certificates of Eligibility may be obtained by sending DD-214 (Separation Paper) to the local VA office with VA form 1880 (request for Certificate of Eligibility).  Now verified through email to streamline the process.

Certificate of Reasonable Value
Commonly referred to as a "CRV". Veterans Administration's certified appraisal of value of real property.

Certificate of Taxes Due
A written statement or guaranty of the condition of the taxes on a certain property, made by the County Treasurer of the county wherein the property is located.  Any loss resulting to any person from an error in a tax certificate shall be paid by the county which such treasurer represents.

Certificate of Title - See Title Insurance
A written opinion by an attorney setting forth the status of title to the property as shown on the public records.  The certificate does not certify as to matters not of record and affords no protection unless the author was negligent.

Certificate of Veteran Status
The document given to veterans or reservists who have served 90 days of continuous active duty (including training time).  It may be obtained by sending DD 214 to the local VA office with form 26-8261a (request for certificate of veteran status).  This document enables veterans to obtain lower down payments on certain FHA insured loans.

Chain of Title
The series of transactions from GRANTOR to GRANTEE as evidenced in the land records.

Chapter 7
Provision of the 1978 Bankruptcy Reform Act that covers liquidations under a court appointed trustee.

Chapter 11
Provision of the 1978 Bankruptcy Reform Act that covers reorganizations where the debtor remains in control of the business and its operations.

Chattel
Any item of property other than real estate, usually referred to as personal property; an item of movable property.

Clear Title
A title that is free of liens or any legal question as to the ownership of the property.

Closing
The final meeting where the sale and transfer of property and/or loan settlement is fully executed.  This meeting generally requires the borrower(s), seller(s), lender (or their agent) to be present.  The closing includes the delivery of a deed, signing of notes, and the collection and disbursement of funds necessary to complete the sale and loan transaction.  Also known as Settlement.

Closing costs
Closing costs are the total expenses that the buyer pays at the time a real estate transaction is completed.  closing costs generally range between 3 and 6 percent of the home purchase price.  With conventional loans, the following closing costs cannot be paid by the Seller for the Buyer: Pre-paid interest, Hazard insurance impounds, or Property tax impounds.

• Loan Origination and/or Discount Points: style='font-size:10.0pt;font-family: Expressed in points, it's a fee which is equal to 1% of the loan amount. The points will vary with the interest rate the lender charges: the lower the interest rate, the higher the points.
• Processing Fee: A fee charged by the lender for processing the loan application.
• Administration or Document Fee: A fee charged by the lender for preparing the loan document.
• Underwriting Fee: A fee charged by the lender for underwriting the loan.
• Appraisal: The fee charged by an appraiser for evaluation of the property.
• Credit Report Fee: A fee charged by a credit reporting agency
• Tax Service Fee: A one-time fee for a service which notifies the lender when the borrowers' taxes are delinquent.
• Flood Certificate Fee: A one-time fee for searching records for required flood zoning and flood insurance.
• Escrow Fee: A charged by the title/escrow company for their services guaranteeing the transfer of funds.
• Title Insurance Premium: A fee charged by the title company for a lender's policy and an owner's policy to protect from possible loss due to defects in title.
• Notary Fees: Fees charged by the title/escrow company for notarizing the legal documents at closing.
• Title Document Fee: Fees charged by the title/escrow company for researching public records, preparation of a preliminary and final title report and providing title insurance.
• Recording Fees: Title/escrow company fee for recording the Deed of Trust with County Recorder's office.
• Express Mail & Courier Fees: Charges incurred by title companies for using express mail & courier services.  All title and escrow documents use special delivery services for promptness and safety.

Cloud on the Title
An outstanding claim or encumbrance which, if valid, would affect or impair the title of the owner of the property.

CLTV - See Loan-to-Value (LTV) 

Co-borrower
Borrower(s) who contribute income and credit history to the qualification process of a loan and whose name(s) appear(s) on all closing documents. The co-borrower is also liable for the debt and condition of property.

COE - See Certificate of Eligibility 

Cognovit Note
Note containing a confession of judgment by the borrower.

Collateral Security
Often called simply "collateral." In banking phraseology, it means some security additional to the personal obligation of the borrower, as a chattel mortgage or trust deed.

Commingling
Mixing money belonging to others with personal or business funds.  Illegal commingling is using the money of one beneficiary for the benefit of another or failing to maintain such money in identified escrow accounts. 

Common Interest Community
Means real estate described in a declaration with respect to which a person, by virtue of such person's ownership of a unit, is obligated to pay for real estate taxes, insurance premiums, maintenance or improvement of other real estate described in a declaration.  Ownership of a unit does not include holding a leasehold interest in a unit of less than forty years, including renewal options.  The period of the leasehold interest, including renewal options, is measured from the date the initial term commences.  A common interest community is not a condominium unless the undivided interests in the common elements are vested in the unit owners.

Common Law
The principles and rules of law, originating from usage and custom, sanctioned by the courts and which are not dependent upon legislative expression or enactment for their authority. Also that body of law, based on custom and usage, developed and formulated by the old English courts.

Community Property
Property, real or personal, which by statute belongs equally to husband and wife; more specifically, property acquired by the husband and wife, or either, during marriage, by their industry and not by gift, said property belonging equally to husband and wife.  Community property laws exist only in nine states: Ariz., Calif., Idaho, La., Nev., N.M., Okla., Tex., and Wash.

Condemnation
In real property law, the process by which property of a private owner is taken for public use, with compensation to the owner, under the right of eminent domain.

Condominium
A structure of two or more units where the interior space is individually owned, and the balance of the land (structure and land) are commonly owned by the owners of each individual unit.

Condominium Ownership
"Condominium" means a common interest community in which portions of the real estate are designated for separate ownership, and the remainder of which is designated for common ownership solely by the owners of the separate ownership portions (pools, tennis court, weight room, etc).  

Conforming loan
Single-family home loans with a maximum loan amount of $359,650 that is typically higher than FHA and VA loans with lower interest rates.

Consideration
One of the essential elements of a contract. A promise or an act of legal value bargained for and received in return for a promise.

Construction Loan
A short term interim loan for financing the cost of construction.  The lender advances funds to the builder at periodic intervals as the work progresses.

Construction Mortgage. A short-term mortgage used to finance the building of a structure.  

Constructive Notice. Often called "legal notice", the conclusive presumption that all persons have knowledge of the contents of a recorded instrument.

Contingency
A condition that must be met before a contract is legally binding.

Contract
An agreement, enforceable at law, between two or more competent persons, having for its object a legal purpose, wherein the parties agree to act in a certain manner.

Contract sale or deed
A contract between a purchaser and a seller of real estate to convey title after certain conditions have been met.  It is a form of installment sale.

Controller
The chief accounting executive of an organization whose principal functions are (1) financial reporting, (2) tax administration, (3) management audits, (4) planing controls and developing accounting systems and procedures.

Conventional Mortgage
A mortgage securing a loan made by private investors without governmental participation (not F.H.A. insured or V.A. guaranteed).

Conversion
An unauthorized assumption and exercise of the right of ownership over goods or personal chattels belonging to another, to the alteration of their condition or the exclusion of the owner's rights.

Convertible ARM
An adjustable-rate mortgage that can be converted to a fixed-rate mortgage under specified conditions.

Conveyance
An instrument in writing by which some estate, interest, or title in real estate is transferred from one person to another, such as a deed or mortgage.

Cooperative
A structure of two or more units in which the right to occupy a unit is obtained by the purchase of stock in the corporation that owns the building or units.

Covenant
A written agreement or restriction on the use of land or promising certain acts.  Homeowner Associations often enforce restrictive covenants governing architectural controls and maintenance responsibilities.  However, land could be subject to restrictive covenants even if there is no homeowner's association.

Credit Report
A report obtained from a credit bureau agency or company that discloses a borrower's credit history and current credit status.

CRV - See Certificate of Reasonable Value

Cul-de-Sac
A passage way with one outlet.  Streets in newer subdivisions are sometimes built in cul-de-sac fashion.

Cumulative Loan-to-Value (CLTV) - style='font-size:10.0pt; font-family:See Loan-to-Value (LTV)

Curtesy
A common law estate in land given to the husband upon his wife's death, consisting of a life estate in all the property owned by the wife during the marriage, provided a child was born alive from their marriage.  Abolished in Colorado.