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Glossary of terms used on this site

There are 84 entries in this glossary.

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C

Term	Definition
Clear Title	A title that is free of liens or legal questions as to ownership of the property.
Closing	This has different meanings in different states. In some states, a real estate transaction is not consider "closed" until the documents record at the local recorder's office. In others, the "closing" is a meeting where all of the documents are signed and money changes hands.
Closing Costs	Closing costs are separated into what are called "non-recurring closing costs" and "pre-paid items." Non-recurring closing costs are any items that are paid just once as a result of buying the property or obtaining a loan. "Pre-paids" are items that 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 that they must issue to the borrower within three days of receiving a home loan application.
Collateral	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.
Commission	Most salespeople earn commissions for the work that they do and there are many sales professionals involved in each transaction, including Realtors, loan officers, title representatives, attorneys, escrow representatives, and representatives for pest companies, home warranty companies, home inspection companies, insurance agents, and more. The commissions are paid out of the charges paid by the seller or buyer in the purchase transaction. Realtors generally earn the largest commissions, followed by lenders, and then the others.
Contingency	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.
Conventional Mortgage	Refers to home loans other than government loans (VA and FHA).
Convertible ARM	An adjustable-rate mortgage that allows the borrower to change the ARM to a fixed-rate mortgage within a specific time.
Credit History	A record of an individual's repayment of debt. Credit histories are reviewed by mortgage lenders as one of the underwriting criteria in determining credit risk.

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