Don't make any adverse changes to your financial
"picture" during this time between approval and closing.
Innocent mistakes range from applying for a new department store
credit card, to purchasing a refrigerator for the new house, to
buying a new car, to quitting a job to go full-time into a new
business.
When you supply us information to help verify your income,
employment, assets and credit history, we will obtain a credit
report directly from the credit bureau.
Glossary
C
Cap: a limit, such as that placed on an adjustable rate mortgage, on
how much a monthly payment or interest rate can increase or decrease.
Caps (Interest): consumer safeguards which limit the amount the
interest rate on an adjustable rate mortgage may change per year
and/or the life of the loan.
Caps (Payment): consumer safeguards which limit the amount monthly
payments on an adjustable rate mortgage may change.
Cash reserves: a cash amount sometimes required to be held in reserve
in addition to the down payment and closing costs; the amount is
determined by the lender.
Certificate of title: a document provided by a qualified source (such
as a title company) that shows the property legally belongs to the
current owner; before the title is transferred at closing, it should
be clear and free of all liens or other claims.
Closing: also known as settlement, this is the time at which the
property is formally sold and transferred from the seller to the
buyer; it is at this time that the borrower takes on the loan
obligation, pays all closing costs, and receives title from the
seller.
Closing costs: customary costs above and beyond the sale price of the
property that must be paid to cover the transfer of ownership at
closing; these costs generally vary by geographic location and are
typically detailed to the borrower after submission of a loan
application.
COFI: short for cost-of-funds-index. A yield index based upon the cost
of funds to savings & loan institutions in the San Francisco
Federal Home Loan Bank District. It is one of the indexes commonly
used to set the rate of adjustable rate mortgages.
Commission: an amount, usually a percentage of the property sales
price, that is collected by a real estate professional as a fee for
negotiating the transaction..
Condominium: a form of ownership in which individuals purchase and own
a unit of housing in a multi-unit complex; the owner also shares
financial responsibility for common areas.
Construction loan: a short term interim loan for financing the cost of
construction. The lender advances funds to the builder at periodic
intervals as the work progresses.
Conventional loan: a private sector loan, one that is not guaranteed
or insured by the U.S. government - FHA or guarantee by the VA or
Farmers Home Administration (FmHA).
Cooperative (Co-op): residents purchase stock in a cooperative
corporation that owns a structure; each stockholder is then entitled
to live in a specific unit of the structure and is responsible for
paying a portion of the loan.
Credit history: history of an individual's debt payment; lenders use
this information to gouge a potential borrower's ability to repay a
loan.
Credit ratio: The ratio, expressed as a percentage, which results when
a borrower's monthly payment obligation on long-term debts is divided
by his or her net effective income (FHA/VA loans) or gross monthly
income (Conventional loans).
Credit report: a record that lists all past and present debts and the
timeliness of their repayment; it documents an individual's credit
history.
Credit bureau score: a number representing the possibility a borrower
may default; it is based upon credit history and is used to determine
ability to qualify for a mortgage loan.
Commitment: an agreement, often in writing, between a lender and a
borrower to loan money at a future date subject to the completion of
paperwork or compliance with stated conditions.
Equal
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