Call Option: A clause in your mortgage that gives right to lender to demand repay the loan balance immediately for various reasons such as the sale of the property, or a delinquency in the repayment of the note.

Cap: The limit in change on how much the interest rate or monthly payment of an Adjustable Rate Mortgage (ARM), either at each adjustment or during the life of the mortgage.

Capitalization: A method of determining the value of property during the appraisal by interpreting the property's net income with a percentage which represents a reasonable return on invested capital.

Capitalization Rate: The expected rate of return on investment property; the ratio of income to value.

Cash Flow: The income generated by a property after deduction of the vacancy allowances and collection costs, operating expenses and debt-servicing costs from the property's scheduled gross income. 

Cash-Out Refinance: Receiving money back when refinancing your present mortgage at a higher amount than the current loan balance.

Caveat Emptor: Literal translation: "Let the buyer beware." The buyer must examine the goods or property and buy at his own risk.

Certificate of Deposit: A time deposit held in a bank which pays a certain amount of interest to the depositor. 

Certificate of Deposit Index: An index that shows an average amount that banks pay on certificates of deposits - used for determining interest rate changes on some adjustable rate mortgages. 

Certificate of Eligibility: A document issued by the Veterans Administration that certifies a Veteran’s eligibility for a VA loan.

Certificate of Reasonable Value: An appraisal of property for the purpose of insurance by the Veteran's Administration.

Chain of Title: A history of the transfers of a property title over the years.

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

Closing: Conducted by a title company or an attorney, the conclusion of the sales transaction when the seller transfers title to the buyer.

Closing Costs: The extra expenses beyond the purchase price that are paid at closing which includes legal fees and mortgage fees. Closing costs are consist of both non-recurring closing costs and pre-paid items. Non-recurring closing costs are any items which are paid just once as a result of buying the property or obtaining a loan. "Pre-paids" are items which recur over time, such as property taxes and homeowners insurance. A lender provides an estimate the amount of non-recurring closing costs and prepaid items on the Good Faith Estimate which they must issue to the borrower within three days of receiving a home loan application. 

Closing Statement: The written statement provided by the escrow company to each of the parties to the loan transaction showing the amounts received and the amounts paid out for various items. 

Cloud on Title: Any conditions revealed by a title search that may affect the title to property; usually relatively unimportant items but which cannot be removed without a quitclaim deed or court action. 

Co-Borrower: An additional individual who is both obligated on the loan and is on title to the property.
Codes A systematic, written collection of laws.

COFI: One of the indexes that is used to determine interest rate changes for certain adjustable-rate mortgages. It represents the weighted-average cost of savings, borrowings, and advances of the financial institutions such as banks and savings & loans, in the 11th District of the Federal Home Loan Bank. 

Collateral: Something of value deposited with a lender to ensure repayment of a loan. Usually, it's the real property itself in mortgage transactions.

Collateral Security: A separate obligation attached to another contract to guarantee performance of the contract. 

Collection: The process of demanding payment when a borrower falls behind. The lender contacts them in an effort to bring the loan current and the loan goes to "collection." The lender must mail and record certain documents in case they are eventually required to foreclose on the property.

Collusion: An illegal agreement between two or more persons to defraud another of his rights.

Color of Title: That which appears to be a good title but which is not title in fact

Commingling: The illegal practice of combining or mixing client's funds with the agent's own funds.

Commission: A payment for the performance of specific duties in real estate; a percentage of the selling price of property, percentage of rentals, etc. 

Common Area Assessments: In some areas, also known as Homeowners Association Fees, these are charges paid to the Homeowners Association by the owners of the individual units in a condominium or planned unit development (PUD) and used to maintain the property and common areas. 

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, corridors, parking areas, and other recreational facilities.

Common Law: An unwritten body of law based on general custom in England enforced in some states.

Community Property: In some states, especially the southwest, any property acquired by a married couple during their marriage is considered to be owned jointly, except under special circumstances. 

Comparable Sales: Recent sales of similar property in nearby areas, used to compare and establish a value for that property. 

Compound Interest: Interest which is computed on the principal and any unpaid accumulated interest. 

Comps: Recent sales of similar property in nearby areas, used to compare and establish a value for that property. 

Condemnation: A declaration that a structure is unfit for use; The act of taking private property for public use, through due process under the right of Eminent Domain, with compensation to the owner.

Conditional Sales Contract: An agreement for the purchase or sale of real property. 

Condominium: A type of ownership in real property where all of the owners own the property, common areas and buildings together, with the exception of the interior of the unit to which they have title. Often mistakenly referred to as a type of construction or development, it actually refers to the type of ownership.

Condominium Conversion: Changing the ownership of an existing building (usually a rental project such as an apartment ) to the condominium form of ownership. 

Condominium Hotel: A condominium project that has rental or registration desks, short-term occupancy, food and telephone services, and daily cleaning services and that is operated as a commercial hotel even though the units are individually owned.

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 condition that must be met before a contract is legally binding. For example, homebuyers often include a contingency that specifies that the contract is not binding until the purchaser obtains a satisfactory home inspection report from a qualified home inspector. 

Contract: An oral or written agreement to do or not to do a certain thing. 

Conventional Loan: A non-government loan that's neither guaranteed nor insured by Federal Housing Administration (FHA) or Veterans' Administration (VA).

Conventional Mortgage: Home loans other than government loans (VA and FHA).

Convertible Adjustable Rate Mortgage: An adjustable-rate mortgage that allows the borrower to change the ARM to a fixed-rate mortgage within a specific time. 

Convertible ARM: An adjustable-rate mortgage that allows the borrower to change the ARM to a fixed-rate mortgage within a specific time. 

Conveyance: A written instrument that shows the transfer of some ownership interest in real property from one person to another such as a deed or a lease.

CO-OP: An apartment building or a group of dwellings owned by a corporation, the stockholders of which are the residents of the dwellings. It is operated for their benefit by their elected board of directors. In a cooperative, the corporation or association owns title to the real estate. A resident purchases stock in the corporation which entitles him to occupy a unit in the building or property owned by the cooperative. While the resident does not own his unit, he has an absolute right to occupy his unit for as long as he owns the stock.

Cooperative: An apartment building or a group of dwellings owned by a corporation, the stockholders of which are the residents of the dwellings. It is operated for their benefit by their elected board of directors. In a cooperative, the corporation or association owns title to the real estate. A resident purchases stock in the corporation which entitles him to occupy a unit in the building or property owned by the cooperative. While the resident does not own his unit, he has an absolute right to occupy his unit for as long as he owns the stock.

Cost of Funds Index: One of the indexes that is used to determine interest rate changes for certain adjustable-rate mortgages. It represents the weighted-average cost of savings, borrowings, and advances of the financial institutions such as banks and savings & loans, in the 11th District of the Federal Home Loan Bank. 

County Clerk: The public official who keeps records of transactions that affect real property in the area.

Covenants: A clause in a contract that restricts the borrower from performing certain acts. For examples, condos usually have covenants that detail regulations to maintain a property’s design and maintenance.

Credit: An agreement in which a borrower receives something of value in exchange for a promise to repay the lender at a later date. 

Credit History: A record of an individual's repayment of debt reviewed my mortgage lenders as one of the underwriting criteria in determining credit risk.

Credit Report: A report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness. 

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. 

Creditor: A person to whom money is owed. 

CRV: An appraisal of property for the purpose of insurance by the Veteran's Administration.