Income derived through the sale of assets such as real estate.
Capped Rate. A rate commitment by a lender which locks-in a maximum rate but allows the borrower to relock if market rates decrease. Also referred to as cap and float.
Safeguards on ARM loans that limit the amount a monthly payment or interest rate may increase. An interest rate cap limits the percent the rate can increase or decrease for the initial and additional adjustment periods. The payment cap limits the amount the payment can increase or decrease for each adjustment period. An ARM loan must also have a "life of loan" cap limiting the maximum percent the rate can increase or decrease for the life of the loan.
A mortgage loan that allows the borrower to pay off an existing debt and obtain excess money from the equity of their home for payment of closing costs and additional funds for personal needs (i.e., college tuition, home improvement, remodel home, purchase automobile and etc).
The average of the most recently published monthly yields on 3-month certificates of deposits for the 12 most recent calendar months as published by the Federal Reserve Board.
Certificate of Eligibility (COE). Issued by VA to certify the amount of entitlement available to a veteran.
Appraisal of a property for a VA mortgage. Appraisal of a subdivision would be a Master Certificate of Reasonable Value, or MCRV.
A certificate issued by a title company or a written opinion rendered by an attorney that the seller has good marketable and insurable title to the property which he is offering for sale. A certificate of title offers no protection against any hidden defects in the title which an examination of the records could not reveal. The issuer of a certificate of title is liable only for damages due to negligence. The protection offered a homeowner under a certificate of title is not as great as that offered in a title insurance policy.
Certificate of Veteran Status. FHA form filled out by the Department of Veteran Affairs in order to establish a borrower's eligibility for an FHA Vet Mortgage.
The numerous expenses which buyers and sellers normally incur to complete a transaction in the transfer of ownership of real estate. These costs are in addition to price of the property and are items prepaid at the closing day. This is a typical list:
The day on which the formalities of a real estate sale are concluded. The certificate of title, abstract, and deed are generally prepared for the closing by an attorney and this cost charged to the buyer. The buyer signs the mortgage, and closing costs are paid. The final closing merely confirms the original agreement reached in the agreement of sale.
An outstanding claim or encumbrance which adversely affects the marketability of title.
Borrower(s) who contribute income and credit history to the qualification process of a loan and whose name(s) appear(s) on all closing documents. The co-borrower is also liable for the debt and condition of property.
An item of value pledged as security for a debt. The real estate is pledged as collateral for a mortgage loan and is bound by signing and recording a mortgage or deed of trust.
The principal balance of all mortgages on the property (including second and third trusts) divided by the value of the property.
A loan that secures commercial real estate.
Commercial Real Estate. Office buildings, shopping centers, apartment buildings and other property which is utilized for the production of income rather than as residences. If residential real estate has more than four units it is considered commercial real estate.
Money paid to a real estate agent or broker by the seller as compensation for finding a buyer and completing the sale. Usually it is a percentage of the sale price--6 to 7 percent on houses, 10 percent on land.
Commitment. An agreement for future action. A rate commitment would be an agreement to lend at a certain rate. A loan commitment would be an agreement to lend and represents another term for loan approval.
Properties utilized in an appraisal to determine the value of the property being appraised.
A positive characteristic of a mortgage application that may offset a negative factor.
A temporary buydown that has rate changes every six months as opposed to annually.
The taking of private property for public use by a government unit, against the will of the owner, but with payment of just compensation under the government's power of eminent domain. Condemnation may also be a determination by a governmental agency that a particular building is unsafe or unfit for use.
Term for an FHA appraisal. An FHA appraisal for a subdivision would be called a Master Conditional Commitment, or MCC.
A provision of a balloon mortgage which, at the time of the scheduled balloon payment, allows the borrower to covert to a fixed rate for the remainder of the loan term.
Individual ownership of a dwelling unit and an individual interest in the common areas and facilities which serve the multi-unit project.
Condominium Association Fee. A fee paid by the homeowner to the association that governs a condominium complex for his/her part of the maintenance and management of the project.
A mortgage that can be purchased by Fannie Mae or Freddie Mac.
Construction Mortgage. A loan secured by real estate which is for the purpose of funding the construction of improvements, or building(s), upon the property.
Construction-to-Permanent Mortgage. A loan secured by real estate that is for the purpose of replacing a construction mortgage soon after the improvements are completed.
Consumer Price Index. An index of the Federal Government's measure of price increases at the retail level.
Contingencies. Conditions without which a transaction would be voided.
(See agreement of sale)
In the construction industry, a contractor is one who contracts to erect buildings or portions of them. There are also contractors for each phase of construction: heating, electrical, plumbing, air conditioning, road building, bridge and dam erection, and others.
Contribution. Cash or other concession by the seller of a property in order to induce a purchaser to buy that property.
Conventional Mortgage. A mortgage not guaranteed by VA or insured by FHA, Rural Housing or State Bond Agencies.
A mortgage loan not insured by HUD or guaranteed by the Veterans' Administration. It is subject to conditions established by the lending institution and State statutes. The mortgage rates may vary with different institutions and between States. (States have various interest limits.)
Conversion Feature. A feature of a mortgage that allows the conversion to another interest rate, mortgage term, or type of mortgage instrument.
Cooperative (COOP). A form of ownership in which the right to occupy the unit is obtained by the purchase of shares in a corporation which owns the building.
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. An index that is made up of the cost to depository institutions of acquiring funds.
Coverage. The portion of the mortgage that mortgage insurance insures against default.
Credit Package. The portion of a loan application and documentation that is comprised of the information regarding the applicant's credit, income and asset history. The additional aspect of a loan application concerns the property being financed (appraisal).
Credit Report. A report run by an independent credit agency that verifies certain information concerning an applicant's credit history.
Credit Score. Automated systems that compile the credit characteristics of an individual into a single numeric rating. The rating would take into consideration the amount of open credit, credit payment history, number of credit inquiries, as well as other indications.
* Credit score of 600 or greater required to continue
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