C

Call option We're not talking stocks here. It's a clause your mortgage that gives the lender the right to 'call' the mortgage due and payable at the end of a given length of time, for whatever reason. In other words, you've got to come up with all the money owed at that time, and repay the lender.

Capital expenditure
The cost of an improvement made either to lengthen the useful life of a property or to add value to it. It's a fancy term for the money you pony up for improvements. See also capital improvement.

Capital improvement
Any structure which is a permanent improvement to the property.

Caps (interest)
Consumer safeguards which limit the amount that the interest rate on an adjustable rate mortgage may change per year and/or during the life of the loan.

Caps (payment)
Consumer safeguards which limit the amount that monthly payments on an adjustable rate mortgage may change.

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 (including mortgage payment, maintenance, utilities, etc.)

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 DD-214 (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 title
A statement which confirms that the title to the house is legally held by the current owner. This is important, because you don't want to buy something from someone who doesn't really own it, now do you?

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.

Chain of title
The history of all of the documents that transfer title to a a piece of real estate. Think of it as being a genealogy for the home since it was built.

Change frequency
The frequency of payment and/or interest rate changes in an adjustable-rate mortgage (ARM). Generally expressed in months.

Chattel
Another name for personal property. You've probably heard the expression 'goods and chattels.' Meet 'chattels.'

Clear title
A title that is free of liens. You've probably heard of 'you own it free and clear.' Meet 'clear.' See also cloud on title.

Closing
the meeting between the buyer, seller and lender or their agents at which the property and funds legally change hands. Also called 'settlement.' See also Closing Costs.

Closing costs
Expenses incurred by buyers and sellers in transferring ownership of a property. These may include an origination fee, taxes, the costs of obtaining title insurance, transfer fees, etc. They can often total several, or many, thousands of dollars.

Cloud on title
anything found by the title search which indicates that the property is not owned free and clear by the purported owner.

This can take you right off Cloud Nine.

Collateral
An asset (such as a car or a home) that can be used to guarantee the repayment of a loan. You, the borrower, risk losing that asset if the loan is not repaid in a timely fashion.

Collection
The process of forcing a borrower to pay what he owes on a loan and,if it comes to that, to proceed with foreclosure.

Commitment
A promise by a lender to make a loan, on specific terms or conditions, to a borrower or builder. It can also be a promise by an investor to purchase mortgages from a lender with specific terms or conditions.

It can also be the agreement (or, in its absence, the refusal) to engage in a long-term relationship with someone with whom you may or may not be in love. There are no easy answers here. However (OK, we'll continue this digression) you might consider the old 80/20 rule: if it's really good 80% of the time, it's probably love, and you might as well commit.

Comps
No, these aren't free tickets to your favorite team's game. The word is short for "comparable properties" -- properties which have recently sold that are about the same size, in the same area, with similar amenities. These help both you and the appraiser figure out what your home ought to be worth.

Condominium
A building or group of buildings in which each unit owner has title to a specific unit. They may also have the exclusive use of certain common areas. See Also co-op.

Construction loan (or interim loan)
A loan to provide the funds necessary to pay for the construction of buildings or homes. The lender advances funds to the builder at periodic intervals as the work progresses.

Contingency
A specified condition that must be met before a contract is legally binding. The two most common contingencies in home purchasing are that 1) the house must pass the home inspection, and 2) the borrower must get the loan.

Contract sale or deed
A contract between a buyer and a seller which conveys title after certain conditions have been met. It is a form of installment sale.

Conventional loan

A mortgage not insured by the FHA or guaranteed by the VA.

Convertibility clause
A clause in certain adjustable-rate mortgages (ARMs) which permit the borrower to switch to a fixed-rate mortgage at specified time. Not to be confused with Mustang Convertible.

Cooperative (co-op)
The residents of this type of housing complex own shares in the cooperative corporation that owns the property, and each has the right to occupy a specific dwelling. They don't actually own the dwelling; they own shares in the corporation.

Cost of funds index (COFI)
The weighted-average cost of savings, borrowings, and advances of the 11th District members of the Federal Home Loan Bank of San Francisco. It's an index used, not surprisingly, for the type of ARMs known as COFI loans. It's a slow-moving index, but often these types of ARMs have no caps.

Credit limit
The maximum amount that you can borrow.

Credit Report
A report documenting the credit history and current status of a borrower's credit standing.

If there are debts you owe which you never paid, or times in which you've been delinquent in paying, these items will presumably show up on your credit report and can hurt your chances of getting approved for a loan.

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