Similar to the acceleration clause.
Adjustable Rate Mortgages have fluctuating interest rates, but those fluctuations are usually limited to a certain amount. Those limitations may apply to how much the loan may adjust over a six-month period, an annual period, and over the life of the loan, and are referred to as "caps." Some ARMs, although they may have a life cap, allow the interest rate to fluctuate freely, but require a certain minimum payment, which can change once a year. There is a limit on how much that payment can change each year, and that limit is also referred to as a cap.
The act of converting future income into current equivalent value.
The relationship or ratio between the net income from real estate investment and the value of the investment, usually expressed as a percentage; the rate of interest which is considered a reasonable return on the investment, plus the recapture rate which computes a return of the investment.
When a borrower refinances his mortgage at a higher amount than the current loan balance with the intention of pulling out money for personal use, it is referred to as “cash out refinance."
Let the buyer beware; the buyer must examine the goods or property and buy at their own risk.
Covenants, conditions, and restrictions.
Certificate of Deposit
A time deposit held in a bank, which pays a certain amount of interest to the depositor.
Certificate of Deposit Index
One of the indexes used for determining interest rate changes on some adjustable rate mortgages. It is an average of what banks are paying on certificates of deposit.
Certificate of Eligibility
A document issued by the Veterans Administration that certifies a veteran's eligibility for a VA loan.
Certificate of No Defense
An instrument executed by the mortgagor and attesting to its validity; estoppel certificate.
Certificate of Reasonable Value (CRV)
Once the appraisal has been performed on a property being bought with a VA loan, the Veterans Administration issues a CRV.
Chain of Title
An analysis of the transfers of title to a piece of property over the years.
Personal property which is tangible and movable; personal property.
A personal property mortgage.
To quote as authority or an example; to call to attention or enumerate.
A title that is free of liens or legal questions as to ownership of the property.
The time when a transaction is consummated, or the actual signing over of the documents and delivery of the deed; the time after signing when the documents are recorded.
Closing costs are separated into what are called "non-recurring closing costs" and "pre-paid items." Non-recurring closing costs are any items which are paid just once as a result of buying the property or obtaining a loan. "Pre-paids" items which recur over time, such as property taxes and homeowners insurance. A lender makes an attempt to estimate the amount of non-recurring closing costs and prepaid items on the Good Faith Estimate which they must issue to the borrower within three days of receiving a home loan application.
A statement of settlement made by a broker or and escrow company that reflects the financial position of the buyer or seller in that particular real estate transaction.
Cloud on Title
Any conditions revealed by a title search that adversely affect the title to real estate. Usually clouds on title cannot be removed except by deed, release, or court action.
An additional individual who is both obligated on the loan and is on title to the property.
A supplement or addition to a will which adds to, subtracts from, alters, revokes, or qualifies the provisions of a will.
In a home loan, the property is the collateral. The borrower risks losing the property if the loan is not repaid according to the terms of the mortgage or deed of trust.
Color of Title
That which appears to be good title but which is not in fact good title, such as title held under a defective deed.
When a borrower falls behind, the lender contacts them in an effort to bring the loan current. The loan goes to "collection." As part of the collection effort, the lender must mail and record certain documents in case they are eventually required to foreclose on the property.
Mixing money belonging to clients with personal funds.
An agent’s compensation for performance of the duties of their agency; in real estate practice, a percentage of the selling price of the property, or percentage of rentals, etc.
Common Area Assessments
In some areas they are called Homeowners Association Fees. They are charges paid to the Homeowners Association by the owners of the individual units in a condominium or planned unit development (PUD) and are generally used to maintain the property and common areas.
Those portions of a building, land, and amenities owned (or managed) by a planned unit development (PUD) or condominium project's homeowners' association (or a cooperative project's cooperative corporation) that are used by all of the unit owners, who share in the common expenses of their operation and maintenance. Common areas include swimming pools, tennis courts, and other recreational facilities, as well as common corridors of buildings, parking areas, means of ingress and egress, etc.
In a condominium, the expenses of operation; all sums designated as such by the declaration or by- laws.
The percentage of undivided interest in the common elements of a building appertaining to each apartment in a condominium.
Laws which have evolved from general usage and legally established through court decision.
The balance of all income, rent, profits and revenues from the common elements remaining after the deduction of the common expenses in a condominium.
Property accumulated and owned in Common through joint efforts of husband and wife during their marriage. Hawaii is not a community property state.
Recent sales of similar properties in nearby areas and used to help determine the market value of a property. Also referred to as "comps."
The process by which property of a private owner is take for public use, with just compensation to the owner, under the right of eminent domain.
One whose property is condemned.
A fee estate based upon a condition.
A type of ownership in real property where all of the owners own the property, common areas and buildings together, with the exception of the interior of the unit to which they have title. Often mistakenly referred to as a type of construction or development, it actually refers to the type of ownership.
Changing the ownership of an existing building (usually a rental project) to the condominium form of ownership.
A condominium project that has rental or registration desks, short-term occupancy, food and telephone services, and daily cleaning services and that is operated as a commercial hotel even though the units are individually owned. These are often found in resort areas like Hawaii.
Valuable consideration, a promise or an act of legal value bargained for and received in return for a promise; good consideration, love and affection.
A short-term, interim loan for financing the cost of construction. The lender makes payments to the builder at periodic intervals as the work progresses.
Breach of the covenant warranting of quiet enjoyment in a lease; when a landlord performs an act depriving the tenant of quiet enjoyment of the premises thereby causing the tenant to move.
Notice given by the public records; legal presumption of notice given by the public records. Also called legal notice.
To bring to completion, perfection, or fulfillment.
In close proximity; adjoining.
A condition that must be met before a contract is legally binding. For example, home purchasers often include a contingency that specifies that the contract is not binding until the purchaser obtains a satisfactory home inspection report from a qualified home inspector.
An update of title search, covering the period from the preliminary title report to the time of the recording of the documents.
A legal agreement between competent parties for a consideration to perform or refrain from performing certain acts.
Refers to home loans other than government loans (VA and FHA).
Transforming an apartment building into a condominium.
An adjustable-rate mortgage that allows the borrower to change the ARM to a fixed-rate mortgage within a specific time.
The transfer of the title of land from one to another; an instrument which carries from one person to another an interest in land.
Tax paid by seller upon transfer of deed, based upon $.10 per $100.00 valuation.
A broker who joins with another broker in the sale of real property; usually, one who represents the buyer of property listed with another broker; the selling broker.
A type of multiple ownership in which the residents of a multi unit housing complex own shares in the cooperative corporation that owns the property, giving each resident the right to occupy a specific apartment or unit.
A vehicle used to carry on business with its owners having liability only to the extent of their stock ownership considered to be an individual or separate entity.
Pertaining to a right or rights of a visible and tangible nature.
A deed used to correct a prior erroneous deed; a deed of confirmation; a reformation deed.
Courtesy to Broker
The practice of sharing commissions with cooperation brokers; also, where a selling owner states he will give a commission to the buyer’s broker.
Cost of Funds Index (COFI)
One of the indexes that is used to determine interest rate changes for certain adjustable-rate mortgages. It represents the weighted-average cost of savings, borrowings, and advances of the financial institutions such as banks and savings & loans, in the 11th District of the Federal Home Loan Bank.
An agreement written into deeds and other instruments which promises or guarantees that something shall or shall not be done; an agreement stipulation certain uses or non uses or property.
An agreement in which a borrower receives something of value in exchange for a promise to repay the lender at a later date; in closing statements, the acknowledgment of payment; the opposite of a charge or debit.
A record of an individual's repayment of debt. Credit histories are reviewed my mortgage lenders as one of the underwriting criteria in determining credit risk.
A person to whom money is owed.
A report of an individual's credit history is prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness.
An organization that gathers, records, updates, and stores financial and public records information about the payment records of individuals who are being considered for credit.
Certificate of Reasonable Value (VA).
A passage way or street with only one outlet; a blind alley; a turn- around.