CMT - CONSTANT MATURITY TREASURY
The 1-year CMT is the average yield of all Treasury Securities having one year
remaining until maturity. The index is calculated weekly. It is made available
by the Federal Reserve in the weekly publication "Statistical Release -
H15" and can be found on various wire services.
COFI - 11TH DISTRICT COST OF FUNDS INDEX
The monthly weighted average of deposits and borrowings for savings institutions
in the Federal Home Loan Bank’s 11th District, as made available by the
Federal Home Loan Bank of San Francisco.
Cap
A limit on the increase of an adjustment rate or the mortgage payment for an
adjustable-rate mortgage (ARM).
Capital
The accumulated wealth (money and/or property) of a person or business.
Capital Gain
Income from the sale of an asset rather than from the general business activity.
Capital gains are generally taxed at a lower rate then ordinary income.
Capital Improvement
Any structure or component erected as a permanent improvement to real property
that adds to its value and useful life.
Cash Reserves
Refer to amount in cash after purchase is complete (i.e. after down payment,
closing costs, etc.).
Cash-Out Refinance
A refinance transaction in which the amount of money received from the new loan
exceeds the total of the money needed to repay the existing first mortgage,
closing costs, points and the amount required to satisfy outstanding subordinate
mortgage liens. In other words, a refinance transaction in which the borrower
receives additional cash that can be used for any purpose.
Caveat Emptor
Latin for 'Let the buyer beware'. The buyer must examine the goods or property
and buy at his or her own risk.
Certificate of Eligibility
A document issued by the Department of Veterans Affairs (VA) that establishes
the maximum value and loan amount for a VA mortgage.
Certificate of Title
A written document stating that the title to a piece of property is legally
vested in the present owner.
Child Support
Monthly payments that contribute to the care of a child. Payments must be received
continuously for three years to be counted toward qualifying income for a loan.
Clear Title
Title not burdened by liens or legal questions.
Closing
In real estate, the delivery of a deed, the payment of the purchase price, the
signing of notes, and the paying of closing costs, which completes a real estate
transaction.
Closing Costs
The miscellaneous expenses involved in closing a real estate transaction that
are over and above the purchase price. Some of the closing costs include title
insurance, appraisal fee, and credit report.
Closing Statement
Also referred to as the 'HUD-1'. The final statement of costs incurred to close
a loan or to purchase a home.
Closing/Settlement Date
The date the mortgage loan transaction is closed.
Co-maker or Endorser on a Note
One who agrees to be responsible for repaying a debt obligation in addition
to the principal borrower.
Co-op
A residential project owned by a cooperative corporation. Residents own shares
in the cooperation, which in turn gives them the right to live in the project.
Collateral
Any property pledged as security for repayment of a debt.
Collection
The efforts used to bring a delinquent mortgage, or other debt current, and
the filing of necessary notices to proceed with foreclosure when necessary.
Combination Loan
A loan in which the borrower receives a first mortgage for 80 percent of the
loan amount, and a second mortgage at the same time for the remainder of the
balance. If borrower is trying to avoid PMI (mortgage insurance) it is important
to consider a combination loan or the Advantage90 loan.
Combined Loan-to-Value (CLTV)
The relationship between the unpaid principal balances of all the mortgages
on a property (first and second usually) and the property's appraised value
(or sales price, if it is lower).
Commission
An agent's fee for negotiating a real estate or loan transaction, often expressed
as a percentage of the selling price.
Commitment Letter
A formal offer by a lender which states the terms under which it agrees to lend
money to a home buyer. Also known as a 'loan commitment.' This letter will indicate
the contingencies that must be cleared prior to funding the loan.
Common Areas
Those portions of a building, land, and amenities owned (or managed) by a planned
unit development (PUD), or condominium project's homeowners' association, or
a cooperative project's cooperative corporation that are used by all of the
unit owners who share in the common expenses of their operation and maintenance.
Common areas include swimming pools, tennis courts, and other recreational facilities,
as well as common corridors of buildings, parking areas, means of ingress and
egress, etc.
Community Property
In some states, a form of ownership under which property acquired during a marriage
is generally presumed to be owned jointly by both spouses regardless of whether
it is titled in the name of one or both spouses unless specifically acquired
as separate property of one spouse (for example, as the result of a spouse's
inheritance.
Comparables
An abbreviation for 'comparable properties'; used for comparative purposes in
the appraisal process. Comparables are properties like the property under consideration;
they have reasonably the same size, location, and amenities and have recently
been sold. Comparables help the appraiser determine the approximate fair market
value of the subject property.
Condominium
A structure of two or more housing units. The interior space of the units are
individually owned. The balance of the property (land, building and other amenities)
is owned in common by the owners of the individual units.
Condominium Conversion
Changing the ownership of an existing building (usually a rental project) to
the condominium form of ownership.
Conforming Loan
A loan that is eligible for purchase by FNMA or FHLMC. The current FNMA or FHLMC
conforming loan limit is $322,700 and below for a single-family residence, $413,100
and below for a 2 unit property, $499,300 and below for a 3 unit property, and
$620,500 and below for a 4 unit property. Conforming loan limits may change
annually. The limit is revised each year according to the change in average
sales price of conventionally financed single-family homes.
Construction Loan
A short-term interim loan for financing the cost of construction. The lender
makes payments to the builder at periodic intervals as the work progresses.
Contingency
A clause in a contract stating that the buyer or seller must meet a given condition
before the purchase can be completed.
Contingent Liability
A debt created by association with a dependent factor, which may be likely but
not certain to occur, such as being the co-signer on a loan.
Contract
An agreement between two or more parties.
Conventional Mortgage
A mortgage that is not insured or guaranteed by the federal government.
Convertible ARM
An adjustable-rate mortgage (ARM) that can be converted to a fixed-rate mortgage
under specified conditions.
Conveyance
The process by which title to property is officially transferred and which creates
an interest in real estate.
Cooperative
A residential project owned by a cooperative corporation. Residents own shares
in the cooperation, which in turn gives them the right to live in the project.
Credit History
The financial worthiness of a borrower. The history of whether the borrower
has met financial obligations on time in the past.
Credit Report
A report on a loan applicants willingness and ability to make payments in a
timely manner in the past. This report is provided to the bank by an outside
agency.
Credit Reporting Agency
An organization that prepares reports that are used by lenders to determine
a potential borrower's credit history. The agency obtains data for these reports
from a credit repository as well as from other sources.
Credit Repository
An organization that gathers, records, updates, and stores financial and public
records information about the payment records of individuals who are being considered
for credit.
Curtailment
Payment applied to principal only in addition to and without affecting the regular
monthly payments.