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Glossary

Cap (Interest Rate)

See Rate Cap.

Cap (Payment)

See Payment Cap.

Cash Out Refinance

A refinance loan in which the new loan amount is larger than the remaining balance of all current mortgages, giving you cash that can be used for any purpose. Many homeowners use a cash out refinance to pay for home improvements, to consolidate debt, or to take needed cash from the equity earned by the property.

Certificate of Title

A record of property ownership issued by a title company or other qualified source. It is based on a title search to determine that the seller is the current legal owner, and to identify any liens on the property.

Certified Funds

In the United States this form of payment is guaranteed to clear or settle by the company that which certified the funds. When purchasing property the seller requires a guarantee that the payment will satisfy the obligations, sellers require certified funds in the form of a cashiers check, certified bank check or money order. Personal checks and credit cards are not acceptable.

Closing

The conclusion of a real estate transaction. At closing, you sign documents that transfer legal ownership of the property to you, and pay closing costs. Also called Settlement.

Closing Costs

Expenses you and the seller pay to complete the transfer of ownership. Closing costs might include an origination fee, attorney's fee, initial escrow payments, and charges for obtaining title insurance and a survey. Closing costs vary according to geographic location. Also called Settlement Costs.

Closing Disclosure (CD)

A new form/disclosure that replaces the HUD-1 Settlement Statement and the final Truth in Lending (TIL) disclosure that reflects the actual terms and costs of the transaction. The Closing Disclosure must be received by the consumer(s) at least three business days before consummation.

Closing Statement

An itemized list of all closing costs to be paid by you and the seller. Also known as the HUD-1 Uniform Settlement Statement.

Co-Homeowner

All of the borrowers listed in the mortgage document when more than one person will be responsible for repaying the loan.

Co-op or Cooperative

A form of home ownership in which you purchase an interest in a property — usually a multi-family dwelling — with occupancy rights to a particular unit. You become a member of a co-op association, which is responsible for all aspects of the property's operation, including maintenance and repairs. These costs are covered by an association fee.

Collateral

Monetary assets and/or property you legally promise to a lender as a guarantee that you will repay a debt.

Commitment Letter

An official notification from a lender stating that your loan application has been approved. The commitment letter also details the terms of the agreement. Also called a Loan Commitment.

Community Property

In some states, property acquired during a marriage is legally considered to be jointly owned.

Comparable Properties

Recently sold properties with similar features to the one being appraised. Comparables have similar size, location, and amenities, and help an appraiser estimate the property's fair market value. Also known as Comps.