Glossary
C
Callable Debt -
A debt security in where the issuer has the right to redeem the security at a
specified price on or after a specified date, but prior to its stated final maturity
date.
Caps -
A set percentage amount by which an adjustable rate mortgage may adjust
each adjustment period. For adjustable loans, caps are usually quoted as two
numbers as in 2/6. The first number indicates how much a loan may adjust at
each adjustment period while the second number indicates how much a loan
may adjust over its lifetime.
Loans like the 3/1 and 5/1 adjustable which have an initial fixed period are
quoted with 3 numbers as in 3/2/6 which would mean that the first adjustment
may be as much as 3%, subsequent adjustments are capped at 2% each, and
the lifetime cap is 6%.
Two-Step loans are quoted with a single cap, which is the amount by which the
loan may adjust at its single adjustment date.
Carryback Loan -
A loan in which a seller agrees to finance a buyer in order to complete a
property sale.
Certificate of Eligibility -
A veteran's evidence of entitlement for a VA-guaranteed loan.
Certificate of Reasonable Value (CRV) -
An appraisal that has been performed on a property that is being paid for a VA
loan. After the property has been appraised, the Veterans Administration
issues a CRV.
Clear Title -
A title that is free of liens or any legal question as to the ownership of the
property.
Closing -
Final arrangements to transfer title of property as well as allocate charges and
credits.
Closing Costs -
Closing costs are fees paid by the borrower when a property is purchased or
refinanced. Costs incurred include a loan origination fee, discount points,
appraisal fee, title search, title insurance, survey, taxes, deed recording fee,
and credit report charges. All closing costs are separated into "non-recurring,"
and "pre-paid." Non-recurring charges are any items that are paid only once
because a loan was obtained or a property bought, such as a loan origination
fee. Pre-paid charges are those that recur over time, like insurance and
property taxes. These are summarized in the Good Faith Estimate.
Cloud -
An outstanding claim or encumbrance, that, if valid, would affect or impair the
owner's property title.
Collateral -
Property, real or personal, pledged as a security to back up a promise. In a
home loan, the property is considered collateral that can be revoked if loan is
not repaid according to the terms of the mortgage or deed of trust.
Commitment -
A written letter of agreement detailing the terms and conditions by which the
lender will lend and the borrower will borrow funds to finance a home.
Conforming Loan -
A loan for up to and including $417,000 in the continental United States (Alaska
and Hawaii limits are higher).
Construction Loan -
A short term loan for funding the cost of construction. The lender advances
funds to the builder as the work progresses.
Conventional Mortgage -
A mortgage loan that is obtained without any additional guarantees for
repayment, such as FHA insurance, VA guarantees, or private insurance. This
is usually given at an 80% loan-to-value ratio.
Conversion -
The right of a borrower to convert an adjustable or balloon loan into a fixed
loan. The Conversion Option column on Moving.com balloon tables indicates
the right of a borrower to convert this balloon loan. The possible options are as
follows...
Option Description
Not Available Borrower May Not Convert This Loan.
Must Re qualify Borrower May Convert But Must Re qualify.
Conversion Fee Applies
Auto-Qualify Borrower May Convert And Is Automatically Qualified.
Conversion Fee Applies
Credit Loan -
A credit loan is a mortgage that is issued on only the financial strength of a
borrower, without great regard for collateral.
Credit-Loss Ratio -
The ratio of credit-related losses to the dollar amount of MBS outstanding and
total mortgages owned by the corporation.
Credit Rating -
Borrowers are rated by lenders according to the borrower's credit-worthiness
or risk profile. Credit ratings are expressed as letter grades such as A-, B, or
C+. These ratings are based on various factors such as a borrower's payment
history, foreclosures, bankruptcies and charge-offs. There is no exact science
to rating a borrower's credit, and different lenders may assign different grades
to the same borrower.
Credit-Related Expenses -
The sum of foreclosed property expenses plus the provision for losses.
Credit-Related Losses -
The sum of foreclosed property expenses plus charge-offs.
Credit Report -
A report to a prospective lender on the credit standing of a prospective
borrower. Used to help determine credit worthiness. Information regarding late
payments, defaults, or bankruptcies will appear here.
Callable Debt -
A debt security in where the issuer has the right to redeem the security at a
specified price on or after a specified date, but prior to its stated final maturity
date.
Caps -
A set percentage amount by which an adjustable rate mortgage may adjust
each adjustment period. For adjustable loans, caps are usually quoted as two
numbers as in 2/6. The first number indicates how much a loan may adjust at
each adjustment period while the second number indicates how much a loan
may adjust over its lifetime.
Loans like the 3/1 and 5/1 adjustable which have an initial fixed period are
quoted with 3 numbers as in 3/2/6 which would mean that the first adjustment
may be as much as 3%, subsequent adjustments are capped at 2% each, and
the lifetime cap is 6%.
Two-Step loans are quoted with a single cap, which is the amount by which the
loan may adjust at its single adjustment date.
Carryback Loan -
A loan in which a seller agrees to finance a buyer in order to complete a
property sale.
Certificate of Eligibility -
A veteran's evidence of entitlement for a VA-guaranteed loan.
Certificate of Reasonable Value (CRV) -
An appraisal that has been performed on a property that is being paid for a VA
loan. After the property has been appraised, the Veterans Administration
issues a CRV.
Clear Title -
A title that is free of liens or any legal question as to the ownership of the
property.
Closing -
Final arrangements to transfer title of property as well as allocate charges and
credits.
Closing Costs -
Closing costs are fees paid by the borrower when a property is purchased or
refinanced. Costs incurred include a loan origination fee, discount points,
appraisal fee, title search, title insurance, survey, taxes, deed recording fee,
and credit report charges. All closing costs are separated into "non-recurring,"
and "pre-paid." Non-recurring charges are any items that are paid only once
because a loan was obtained or a property bought, such as a loan origination
fee. Pre-paid charges are those that recur over time, like insurance and
property taxes. These are summarized in the Good Faith Estimate.
Cloud -
An outstanding claim or encumbrance, that, if valid, would affect or impair the
owner's property title.
Collateral -
Property, real or personal, pledged as a security to back up a promise. In a
home loan, the property is considered collateral that can be revoked if loan is
not repaid according to the terms of the mortgage or deed of trust.
Commitment -
A written letter of agreement detailing the terms and conditions by which the
lender will lend and the borrower will borrow funds to finance a home.
Conforming Loan -
A loan for up to and including $417,000 in the continental United States (Alaska
and Hawaii limits are higher).
Construction Loan -
A short term loan for funding the cost of construction. The lender advances
funds to the builder as the work progresses.
Conventional Mortgage -
A mortgage loan that is obtained without any additional guarantees for
repayment, such as FHA insurance, VA guarantees, or private insurance. This
is usually given at an 80% loan-to-value ratio.
Conversion -
The right of a borrower to convert an adjustable or balloon loan into a fixed
loan. The Conversion Option column on Moving.com balloon tables indicates
the right of a borrower to convert this balloon loan. The possible options are as
follows...
Option Description
Not Available Borrower May Not Convert This Loan.
Must Re qualify Borrower May Convert But Must Re qualify.
Conversion Fee Applies
Auto-Qualify Borrower May Convert And Is Automatically Qualified.
Conversion Fee Applies
Credit Loan -
A credit loan is a mortgage that is issued on only the financial strength of a
borrower, without great regard for collateral.
Credit-Loss Ratio -
The ratio of credit-related losses to the dollar amount of MBS outstanding and
total mortgages owned by the corporation.
Credit Rating -
Borrowers are rated by lenders according to the borrower's credit-worthiness
or risk profile. Credit ratings are expressed as letter grades such as A-, B, or
C+. These ratings are based on various factors such as a borrower's payment
history, foreclosures, bankruptcies and charge-offs. There is no exact science
to rating a borrower's credit, and different lenders may assign different grades
to the same borrower.
Credit-Related Expenses -
The sum of foreclosed property expenses plus the provision for losses.
Credit-Related Losses -
The sum of foreclosed property expenses plus charge-offs.
Credit Report -
A report to a prospective lender on the credit standing of a prospective
borrower. Used to help determine credit worthiness. Information regarding late
payments, defaults, or bankruptcies will appear here.
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| For additional questions please contact me at 281-650-7592 or via e-mail at kowens@closingjust4you.com |
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