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Glossary of terms and acronyms used on this site

There are 93 entries in this glossary.
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C

Term Definition
Cap

A limit, such as one placed on an adjustable rate mortgage, on how much a monthly payment or interest rate can increase or decrease, either at each adjustment period or during the life of the mortgage. Payment caps do not limit the amount of interest the lender is earning, so they may cause negative amortization. Source: www.hud.gov

Capital Gain

The profit received based on the difference of the original purchase price and the total sale price. Source: www.hud.gov

Capital Improvements

Property improvements that either will enhance the property value or will increase the useful life of the property. Source: www.hud.gov

Cash-Out Refinance

When a borrower refinances a mortgage at a higher principal amount to get additional money. Usually this occurs when the property has appreciated in value. Source: www.hud.gov

Casualty Protection

Property insurance that covers any damage to the home and personal property either inside or outside the home. Source: www.hud.gov

Certificate of Title

A document provided by a qualified source, such as a title company, that shows the property legally belongs to the current owner; before the title is transferred at closing, it should be clear and free of all liens or other claims. Source: www.hud.gov

Chapter 13 Bankruptcy

This type of bankruptcy sets a payment plan between the borrower and the creditor monitored by the court. The homeowner can keep the property, but must make payments according to the court's terms within a 3 to 5 year period. Source: www.hud.gov

Chapter 7 Bankruptcy

A bankruptcy that requires assets be liquidated in exchange for the cancellation of debt. Source: www.hud.gov

Charge-Off

The portion of principal and interest due on a loan that is written off when deemed to be uncollectible. Source: www.hud.gov

Clear Title

A property title that has no defects. Properties with clear titles are marketable for sale. Source: www,hud.gov

Closing

The final step in property purchase where the title is transferred from the seller to the buyer. Closing occurs at a meeting between the buyer, seller, settlement agent, and other agents. At the closing the seller receives payment for the property. Also known as settlement. Source: www.hud.gov

Cloud On The Title

Any condition which affects the clear title to real property. Source: www.hud.gov

Collateral

Security in the form of money or property pledged for the payment of a loan. For example, on a home loan, the home is the collateral and can be taken away from the borrower if mortgage payments are not made. Source: www.hud.gov

Comparative Market Analysis (CMA)

A property evaluation that determines property value by comparing similar properties sold within the last year. Source: www.hud.gov This is typically prepared by a real estate agent.

Condominium

A form of ownership in which individuals purchase and own a unit f housing in a multi-unit complex. The owner also shares financial responsibility for common areas. Source: www.hud.com

Conforming Loan

Is a loan that does not exceed Fannie Mae's and Freddie Mac's loan limits. Freddie Mac and Fannie Mae loans are referred to as conforming loans. Source: www.hud.gov

Construction Loan

A short-term, to finance the cost of building a new home. The lender pays the builder based on milestones accomplished during the building process. For example, once a sub-contractor pours the foundation and it is approved by inspectors the lender will pay for their service. Source: www.hud.gov

Contingency

A clause in a purchase contract outlining conditions that must be fulfilled before the contract is executed. Both, buyer or seller may include contingencies in a contract, but both parties must accept the contingency. Source: www.hud.gov

Conventional Loan

A private sector loan, one that is not guaranteed or insured by the U.S. government. Source: www.hud.gov

Cooperative (Co-op)

Residents purchase stock in a cooperative corporation that owns a structure; each stockholder is then entitled to live in a specific unit of the structure and is responsible for paying a portion of the loan. Source: www.hud.gov

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