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Glossary

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.

Condominium

A popular form of home ownership. You own the airspace within the walls, but not the actual walls, ceilings or floors. You may also own a percentage of common areas such as a swimming pool. Common areas are usually maintained by a condominium association, which charges a regular fee.

Conforming Loan

A mortgage loan that meets all the eligibility requirements for purchase by federal agencies such as Fannie Mae and Freddie Mac. The maximum conforming loan amount changes from time to time and varies according to geographical location. Our experienced mortgage representatives are happy to work with you to give you up-to-date information about the loan limits for your local area.

Construction Loan

A short-term loan for financing the cost of construction. The lender makes periodic loan payments directly to the builder or contractors as the home is built.

Contingency

A condition that must be met before the sales contract for your new home is legally binding. For example, the contract might not be binding until a satisfactory home inspection report is obtained from a qualified home inspector.

Conventional Mortgage

A loan that is not part of a government housing program, and is not insured or guaranteed by the federal government. A conforming loan, for instance, is an example of a conventional mortgage.

Conversion Option

A provision in some adjustable rate mortgages (ARMs) that allows you to change the ARM to a fixed rate mortgage. Also known as Conversion Clause.

Convertible ARM

An adjustable rate mortgage that can be converted to a fixed rate mortgage under specified conditions, usually by refinancing or exercising a conversion option.