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Credit Report
A report to a potential lender on the credit status of a potential borrower. It is used to assist in determining creditworthiness. Information concerning late payments, defaults, or bankruptcies will show here. |
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Credit Rating
Lenders rate borrowers according to the borrower's risk profile or credit-worthiness. Credit ratings are expressed as letter grades like A-, B, or C+. These ratings are based on a variety of factors such as a borrower's payment history, bankruptcies, foreclosures and charge-offs. Rating a borrower's credit is no exact science, and different lenders might assign different grades to the same borrower.
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Convertible ARM
Type of adjustable rate mortgage which lets the borrower switch from an ARM to a fixed rate loan according to the note terms and security instrument. |
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Conversion
Borrower’s right to convert an adjustable or balloon loan into a fixed loan. |
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Conventional Loan
Mortgage which is neither guaranteed by the VA nor insured by the FHA. |
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Construction Loan
Short term loan for funding the construction cost. The lender advances financial resources to the builder as the work develops. |
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Conforming Loan
Mortgage loan for $227,150 or lower. |
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Comparables
Short form for comparable properties used for comparative purposes in the process of appraisal; facilities of relatively the same size and location with similar amenities; properties which have been sold lately, which are equivalent to the property under consideration, thus indicating the estimated fair market value of the subject property.
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Commitment Letter
Written offer of the lender to grant a mortgage loan outlining the terms, the loan amount, the interest rate and any other conditions. It can also act as a statement of the lender's decision to the application of the borrower.
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Commitment Fee (Loan)
Any fee paid by a possible borrower to a lender for the lender's promise to lend money within a given time period of time and at a specified rate. |
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Commitment (Loan)
Binding pledge made by the lender to the borrower to make a loan depending on the compliance of the borrower to fixed conditions (normally at a fixed interest rate within a given period of time for a given purpose). |
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Collateral
Property guaranteed as security for a debt. For example, the real estate pledged as security for a mortgage. |
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COFI - Cost of funds index
Adjustable-rate mortgage with rates that adjust based on a cost-of-funds index, often the 11th District Cost of Funds. |
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Co-Borrower
Supplementary borrower(s) whose salary contributes to qualifying for a loan and whose name(s) appears on documents with identical legal obligations.
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Closing Statement
Form which is used at closing. It gives an account of the funds paid and received at the time of closing. It also includes the escrow deposits for taxes, mortgage insurance and hazard insurance. |
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Closing Documents
Documents signed at closing which include the Mortgage with attachments or Deed of Trust, Truth-in-Lending Disclosure, Promissory Note, and other transaction related documents.
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Closing Costs
Cost which normally includes an origination fee, deed recording fee, survey, title search and insurance, appraisal fee, discount points, taxes, credit report charge and other costs assessed at closing. The closing cost frequently is about 3 to 6 percent of the mortgage amount.
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Closing Agent (Escrow/Title Company)
Third party who supervises the loan transaction closing.
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Closing (Settlement)
Meeting between the lender, buyer and seller (or their agents) where the funds and property legally change hands.
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Certificate of Title
Written statement normally issued by an attorney or title company which declares the status of the title to a piece of property. |
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Certificate of Eligibility
Federal government document which certifies the eligibility of a veteran for a Veterans Administration (VA) mortgage guarantee.
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Cash to Close
Readily available liquid assets which are used to pay the charge of closing a mortgage transaction. |
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Cash Out
Loan transaction. The borrower gets funds as the closing time. |
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Caps
Fixed percentage amount by which adjustable rates mortgage might adapt each adjustment period. When it comes to adjustable loans, caps are frequently quoted as two numbers, as in 2/6. The first number determines how much a loan might adjust during each adjustment period. The second number determines how much a loan might adjust over its life span. Adjustable loans like 3/1 and 5/1 have an initial fixed period and are quoted as in 2/6/3. This means the first adjustment may be as much as 3%, consecutive adjustments are capped at 2% each and the life span cap is 6%. To quote two-steo loans, a single cap are used. This is the amount by which the loan might adjust at its only adjustment date. |
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