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Term		Description
Call Option		Similar to the acceleration clause.
Capitalization and Capitalization Rate (CAP Rate)		In real estate appraisal, capitalization is the process of converting income, in the case of real estate net rental income, to a property value. The capitalization rate or CAP Rate for short, is the ratio of yearly net income to the property value.
Cash Flow		A measure of an organization's liquidity that usually consists of net income after taxes plus noncash charges (as depreciation) against income.
Cash-Out Refinance		A borrower refinances his mortgage with the intention of pulling out money for personal use.
Caveat Emptor		"Let the buyer beware." The buyer must examine the goods or property and buy at his or her 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		One of the indexes 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. (See also: Veterans Administration)
Certificate Of Reasonable Value (CRV)		Once the appraisal has been performed on a property being bought with a VA loan, the Veterans Administration issues a CRV.
Chain of Title		A history of conveyances and encumbrances affecting the title.
Clear Title		A title that is free of liens or legal questions.
Closing		To consummate by performing something previously agreed, such as concluding the property sale. The definition of the exact time of closing varies by state.
Closing Costs		Closing costs are separated into what are called "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.
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 which affect the title to property; usually relatively unimportant items but which cannot be removed without a quitclaim deed or court action.
Collateral Security		A separate obligation attached to another contract to guarantee performance of the contract.
Collection		to collect objects to receive payment When a debt is placed for collection, it is usually turned over to a collection agency which in turn attempts to gain full payment.
Collusion		An illegal agreement between two or more persons to defraud another of his rights by the forms of law, or to obtain an object forbidden by law.
Color of Title		That which appears to be a good title but which is, in fact, not title.
Co-mingling		The broker's unauthorized and improper mixing of office funds, which are personal or business monies, with trust funds, which are client/customer monies.
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 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.
Common Area Assessments		In some areas they are called Homeowners Association Fees. They are charges paid to the Homeowners Association by the owners of the individual units in a condominium or planned unit development (PUD) and are generally used to maintain the property and common areas.
Common Law		An unwritten body of law based on general custom in England and used to an extent in some states.
Community Property		In some states, especially the southwest, 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 properties in nearby areas and used to help determine the market value of a property.
Comparable Market Analysis (CMA)		This is the process used by real estate appraisers to estimate the value of a property. In summary, a CMA is completed by reviewing all recent property sales in an area and determining what a typical sized house is selling for given such items as square footage, number of bedrooms, amount of land, etc. By the end of a CMA, the appraiser will be able to estimate the value of all properties in an area. Your property taxes are determined by CMA studies done over the entire county where you live or intend to buy. in.
Competitive Market Analysis		This is the process that is used by real estate appraisers to estimate the value of a property. In summary, a CMA is completed by reviewing all recent property sales in an area and determining what a typical sized house is selling for given such items as square footage, number of bedrooms, amount of land, etc. By the end of a CMA, the appraiser will be able to estimate the value of all properties in an area. Your property taxes are determined by CMA studies done over the entire county you live in.
Compound Interest		Interest paid on the original principal and on interest accrued from the time it became due. (See Also: Simple Interest)
Conditional Sales Contract		An agreement for the purchase or sale of real property with specified conditions imposed. (See Also: agreement of sale, Land Contract)
Condemnation		The act of taking private property for public use by the sovereign powers; a declaration that a structure is unfit for use.
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) 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. These are often found in resort areas like Hawaii
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, home purchasers 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 loan that's neither guaranteed nor insured by Federal Housing Administration (FHA) or Veterans' Administration (VA).
Conveyance		The transfer of title to land. Includes most instruments by which an interest in real estate is created, mortgaged, or assigned.
Covenants		Agreements written into deeds and other instruments promising performance or non-performance of certain acts or stipulating certain uses or non-uses of the property.
Conventional Mortgage		Refers to home loans other than government loans (VA and FHA).
Convertible ARM		An adjustable-rate mortgage that allows the borrower to change the ARM to a fixed-rate mortgage within a specific time. (See also: Adjustable-rate mortgage)
Cooperative (co-op)		A type of multiple ownership in which the residents of a multiunit housing complex own shares in the cooperative corporation that owns the property, giving each resident the right to occupy a specific apartment or unit.
Cost Of Funds Index (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.
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. Credit histories are reviewed by mortgage lenders as one of the underwriting criteria in determining credit risk.
Creditor		A person to whom money is owed.
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.
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