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"Your Education Center" |
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Cash Flow
The amount of cash derived over a certain period of time from
an income producing property. The cash flow should be large
enough to pay the expenses of the income producing property
(mortgage payment, maintenance, utilities, etc.).
Caps (interest)
Consumer safeguards which limit the amount the interest rate
on an adjustable rate mortgage which may change per year and/or
the life of the loan.
Caps (payment)
Consumer safeguards which limit the amount monthly payments
on an adjustable rate mortgage may change.
Certificate of Eligibility
The document given to qualified veterans which entitles them
to VA guaranteed loans for homes, business and mobile homes.
Certificates of eligibility may be obtained by sending form DADA
(Separation Paper) to the local VA office with VA form 1880
(request for Certificate of Eligibility)
Certificate of Reasonable Value (CRV)
An appraisal issued by the Veterans Administration showing
the property's current market value.
Certificate of veteran status
The document given to veterans or reservists who have served
90 days of continuous active duty (including training time) It
may be obtained by sending DD 214 to the local VA office with
form 26-8261a (request for certificate of veteran status. This
document enables veterans to obtain lower down payments on
certain FHA insured loans).
Change Frequency
The frequency (in months) of payment and/or interest rate
changes in an adjustable rate mortgage (ARM).
Closing
The meeting between the buyer, seller and lender or their
agents where the property and funds legally change hands, also
called settlement. Closing costs usually include an origination
fee, discount points, appraisal fee, title search and insurance,
survey, taxes, deed recording fee, credit report charge and other
costs assessed at settlement. The cost of closing usually are
about 3 percent to 6 percent of the mortgage amount.
Closing Costs
These are expenses - over and above the price of the property
that are incurred by buyers and sellers when transferring
ownership of a property. Closing costs normally include an
origination fee, property taxes, charges for title insurance and
escrow costs, appraisal fees, etc. Closing costs will vary
according to the area country and the lenders used.
COFI
Adjustable-rate mortgage with rate that adjusts based on a
cost-of-funds index, often the 11th District Cost of Funds.
Construction loan
A short term interim loan to pay for the construction of
buildings or homes. These are usually designed to provide
periodic disbursements to the builder as he or she progresses.
Consumer Reporting Agency (or Bureau)
An organization that handles the preparation of reports used
by lenders to determine a potential borrower's credit history.
The agency gets data for these reports from a credit repository
and from other sources.
Contract sale or deed:
A contract between purchaser and a seller of real estate to
convey title after certain conditions have been met. It is a form
of installment sale.
Conventional loan
A mortgage not insured by FHA or guaranteed by the VA.
Conversion Clause
A provision in an ARM allowing the loan to be converted to a
fixed-rate at some point during the term. Usually conversion is
allowed at the end of the first adjustment period. The conversion
feature may cost extra.
Credit Report
A report documenting the credit history and current status of
a borrower's credit standing.
Credit Risk Score
A credit risk score is a statistical summary of the
information contained in a consumer's credit report. The most
well known type of credit risk score is the Fair Isaac or FICO
score. This form of credit scoring is a mathematical summary
calculation that assigns numerical values to various pieces of
information in the credit report. The overall credit risk score
is highly relative in the credit underwriting process for a
mortgage loan.
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