The Following are real estate terms and topics: Starting With the Letter ( C)

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The Following are real estate terms and topics: Starting With the Letter ( C)

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Are you confused and overwhelmed by the extensive terms and words used in real estate? Every person working in real estate or planning to buy or sell real estate can benefit from learning some of the terms….

Real Estate Terms C

Capital
Money used to create income, either as an investment in a business or an income property.

Capital expenditure
The cost of an improvement made to extend the useful life of a property or to add to its value.

Capital improvement
Any structure or component erected as a permanent improvement to real property that adds to its value and useful life.

Cash-out refinance
If a borrower chooses to take cash-out in addition to their existing loan balance, the new loan balance will consist of the current loan balance plus the desired cash-out amount. This type of refinance is referred to as a “cash-out refinance”.

Certificate of deposit
A document written by a bank or other financial institution that is evidence of a deposit.

Certificate of Eligibility
A document issued by the federal government certifying a veteran’s eligibility for a Department of Veterans Affairs mortgage.

Certificate of Reasonable Value
Document issued by the Veterans Administration, based on an approved Appraisal. It establishes a ceiling on the maximum VA mortgage loan principal.

Certificate of title
A statement provided by an abstract company, title company, or attorney stating that the title to real estate is legally held by the current owner. Certificates of Title establish the current owner of a piece of property.

Chain of title
The history of all of the documents that transfer title to a parcel of real property, starting with the earliest existing document and ending with the most recent.

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

Chattel
Another name for personal property. By definition chattel is an item of tangible movable or immovable property except real estate and things connected with real property.

Clear title
A title that is free of liens or legal questions as to ownership of the property.

Closing
A meeting at which a sale of a property is finalized by the buyer signing the mortgage documents and paying closing costs.

Closing costs
Expenses (over and above the price of the property) incurred by buyers and sellers in transferring ownership of a property. Closing costs normally include an origination fee, an attorney’s fee, taxes, an amount placed in escrow, and charges for obtaining title insurance and a survey. Closing costs percentage will vary according to the area of the country; lenders or realtors® often provide estimates of closing costs to prospective homebuyers.

Closing Date
The date on which the seller delivers the deed and the buyer pays for the property.

Cloud on title
Any unusual characteristic revealed by a title search that would give a person pause before accepting the title.

Coinsurance
A sharing of insurance risk between the insurer and the insured. It is a splitting or spreading of risk among multiple parties.

Coinsurance clause
A provision in a hazard insurance policy that states the amount of coverage that must be maintained — as a percentage of the total value of the property — for the insured to collect the full amount of a loss.

Collateral
An asset that’s pledged for the repayment of a loan if one cannot procure enough funds to repay.

Commission
The fee charged by a broker or agent for negotiating a real estate or loan transaction.

Commitment letter
A formal offer by a lender stating the terms under which it agrees to lend money to a home buyer.

Common area assessments
Levies against individual unit owners in a condominium or planned unit development project for additional capital to defray homeowners’ association costs and expenses and to repair, replace, maintain, improve, or operate the common areas of the project.

Common areas
Those portions of a building, land, and amenities owned by a planned unit development or condominium project’s homeowners’ association that are used by all of the unit owners, who share in the common expenses of their operation and maintenance.

Community Home Improvement Mortgage Loan
An alternative financing option that allows low- and moderate-income home buyers to obtain 95 percent financing for the purchase and improvement of a home in need of modest repairs.

Community Land Trust Mortgage Loan
An alternative financing option that enables low- and moderate-income home buyers to purchase housing that has been improved by a nonprofit Community Land Trust and to lease the land on which the property stands.

Community property
In some western and southwestern states, a form of ownership under which property acquired during a marriage is presumed to be owned jointly unless acquired as separate property of either spouse.

Comparables
An abbreviation for “comparable properties”; used for comparative purposes in the appraisal process. Comparables are properties like the property under consideration; they have reasonably the same size, location, and amenities and have recently been sold.

Compound interest
Interest paid on the original principal balance and on the accrued and unpaid interest.

Condemnation
The determination that a building is not fit for use or is dangerous and must be destroyed; the taking of private property for a public purpose through an exercise of the right of eminent domain.

Condominium
A real estate project in which each unit owner has title to a unit in a building, an undivided interest in the common areas of the project, and sometimes the exclusive use of certain limited common areas.

Contingency
A condition that must be met before a contract is legally binding.

Contract
An oral or written agreement to do or not to do a certain thing.

Convertibility clause
A provision in some adjustable-rate mortgages that allows the borrower to change the ARM to a fixed-rate mortgage at specified timeframes after loan origination.

Convertible ARM
An adjustable-rate mortgage that can be converted to a fixed-rate mortgage under specified conditions.

Cooperative (co-op)
A type of multiple ownership in which the residents of a multiunit housing complex own shares in the cooperative corporation that owns the property, giving each resident the right to occupy a specific apartment or unit.

Counteroffer
A rejection of an offer to buy or sell, tendered with a simultaneous substitute offer.

Covenant
A clause in a mortgage that obligates or restricts the borrower and that, if violated, can result in foreclosure.

Credit
An agreement in which a borrower receives something of value in exchange for a promise to repay the lender at a later date.

Credit history
A record of an individual’s open and fully repaid debts.

Creditor
A person to whom money is owed.

Credit Report
A report of an individual’s credit history prepared by a credit bureau and used by a lender in determining a loan applicant’s creditworthiness.

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