Call Option

This is much like an acceleration clause.

Cap

An adjustable rate mortgage has an interest rate that can vary, however fluctuations are most often have a time limit. The limiting factor may be the amount a loan can be adjusted for a specific time period, such as six months, a year, or the entire lifetime of the loan. Some adjustable rate mortgages, can have a cap that covers the full time period of the loan, but allow for the interest rate to be adjusted at any time; however there is usually a requirement for a minimum payment that can change once per year. The change in the payment amount per year is limited, and this limit is called a cap.

Cash-out Refinance

This occurs when a borrower refinances a loan mortgage for more money than a current loan in order to receive cash at closing.

Certificate of Deposit

A deposit with a time restriction at a lending institution that will pay a specific interest amount to the person depositing the funds.

Certificate of Deposit Index

This is an index (measurement) used in establishing interest rate changes on some ARMs (adjustable rate mortgages. The index is calculated by determining the average payments for certificates of deposit at lending institutions.

Certificate of Eligibility

This is a verification from Veterans Administration stating a military veteran's eligibility to receive a Veterans Administration real estate loan.

Certificate of Reasonable Value ( CRV )

This is a document issued by the Veterans Administration following a real estate appraisal on a property that will be financed by a VA loan.

Chain of Title

Documents stating all title transfers for a property over a period of time.

Clear Title

This is a property title that is free of legal issues or liens regarding property ownership.

Closing

This term can have different definitions depending on the state where property is being purchased. A closing can mean all documents are recorded with the proper authorities. In other states, the closing can mean the signing of all documents and exchange of money for the purchase.

Closing Costs

Closing costs are classified into two groups: one is called "pre-paid", the other is all "non-recurring" closing costs. Pre-paid costs are those that will reoccur at times, like property tax and insurance coverage. The non-recurring closing costs are those that are paid at closing on a one-time basis.

Closing Statement

See Settlement Statement.

Cloud on Title

These are conditions that are discovered during a title search that negatively affect the title to real property. These negative situations are usually removed by a release, decision of courts, or by deed.

Co-Borrower

A person who signs a loan, usually to help close a real estate transaction, and becomes a responsible party to the loan; obligated to pay, if necessary. This person is also listed on the title of the property.

Collateral

Property that a borrower risks losing if a loan for purchase is not repaid according to terms of the loan. For a real estate mortgage, the property is the collateral and the terms of repayment are listed by mortgage or trust deed.

Collection

If a borrower fails to make timely payments, a lender may place a loan in the "collection" category. The lender is required to notify the borrower by mail and forward necessary documents. If the borrower fails to make the payments current, the property may go into foreclosure.

Commission

Commissions in real estate sales are paid by the seller or buyer to the agent or broker who helps consummate the sale of property. Other parties may also receive commissions.

Common Area Assessments

This is also called a the "Homeowners Association Fees," typically for a condominium owners association. Owners of condominiums pay into the owners association account to maintain landscaping, outdoor lighting, streets, signs and other amenities.

Common Areas

Areas of a planned unit development, like a condominium, where all unit owners have access and share the expense for maintenance and replacement and daily upkeep. Common areas include parking lots, landscaped areas, recreational facilities, corridors, signs, curbing and streets, tennis and/or swimming swimming facilities, laundry facilities, garbage, outdoor lighting, and others.

Community Property

This is property acquired by a married couple during the time of the marriage. This property is said to be "jointly owned."

Comparable Sales

This is a comparison of recent sales of similar properties in a local areas used to establish the property's market value. This is also called "comps."

Condominium

A type of real property ownership where all owners share in ownership of common areas and buildings. The exception to this is the interior of the individual units to which each owner has title.

Condominium Conversion

This is the process of transferring ownership of a building, typically apartment building, to condominium ownership.

Condominium Hotel

A condominium with rentals occupancy including food services and other amenities. It is operated like a commercial hotel company although the individual units are privately owned. This is a popular means of ownership for vacation rental accommodations.

Construction Loan

An interim loan used to pay for construction costs. A builder will be paid at specific intervals by a lender at various phases of the construction project.

Contingency

This is a requirement that must be met prior to a contract becoming legally binding. Home purchases often have a contingency that requires a property inspection by a licensed home inspector.

Contract

This is a written or agreement to perform or not perform certain actions.

Conventional Mortgage

This is the most common type of mortgage, using saving and loan, banks, and other mortgage lenders, however, it does not refer to government loans, including Veterans Administration and FHA loans.

Convertible ARM

This is adjustable rate mortgage that provides the borrower the right to change the adjustable rate mortgage into a fixed-rate mortgage. There is a time limitation for exercising this right.

Cooperative ( Co-Op )

A type of multiple ownership for a multi-unit housing complex where residents have shares in the corporation that owns the property. This provides the right for a resident to occupy a specific unit or apartment.

Cost of Funds Index ( COFI )

This is an index used to establish interest rate fluctuations for some adjustable-rate mortgages (ARMs). It is a weighted average cost of the loans and savings of financial institutions like savings and loans and banks.

Credit

An agreement where a borrower receives something of value and makes a promise to repay a lender for the amount borrowed over a period of time or a specific date in the future.

Credit History

A record of a person's debt repayment history. A credit history is used by a mortgage lender to determine a potential borrower's credit risk.

Creditor

This is an individual to whom money is owed.

Credit Report

This is a document of an individual's credit history that is gathered and issued by a credit bureau for use by a lending institution to establish a borrower's credit qualifications for a loan.

Credit Repository

This is a service organization that collects, records, edits, and provides storage facilities for financial records and publicly recorded information regarding payment history of individuals who are requesting credit.