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Certificate of Title

A statement provided by an abstract company, title company, or attorney stating who holds title to real estate based on the public record.

Chain of Title

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

Clear Title

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

Closing Cost Item

A fee or amount that a home buyer or borrower must pay at closing for a particular service, tax, or product. Closing costs are made up of individual closing cost items such as origination fees and attorney's fees. Many closing cost items are included as numbered items on the HUD-1 settlement statement.

Closing Costs

Various expenses (over and above the price of the property) incurred by buyers and sellers in transferring ownership of a property. Closing costs normally include items such as broker's commissions, discount points, origination fees, attorney's fees, taxes, title insurance premiums, escrow agent fees, and charges for obtaining appraisals, inspections and surveys. Closing costs will vary according to the area of the country. Lenders or real estate professionals often provide estimates of closing costs to prospective homebuyers even before the HUD-1 settlement statement is delivered.

Closing Statement

An accounting of funds given to both buyer and seller before real estate is sold.  Closing statements are also given to borrowers. See HUD-1 settlement statement.

Cloud on Title

An outstanding claim or lien, revealed by a title search, that adversely affects the owner's title to real estate. Usually, clouds on title cannot be removed except by a quitclaim deed, release, or court action.

Collateral

An asset (such as a car or a home) that is pledged as security for the repayment of a loan. The borrower risks losing the asset if the loan is not repaid according to the terms of the loan contract or promissory note.

Collection

The efforts used to bring a delinquent loan current and, if necessary, to file legal papers and notices to proceed with foreclosure.

Combined Loan to Value (CLTV)

The ratio of the total amount borrowed on all mortgages against a property compared to the appraised value of the property. For example, if you have an $80,000 1st mortgage and a $10,000 2nd mortgage on a home with an appraised value of $100,000, the CLTV is 90% ($80,000+$10,000 = $90,000 / $100,000 = 90%).

Commercial Loan

A mortgage loan on a property that produces income.

Commercial Real Estate

Real estate used in the operation of a business. Commercial real estate can be leased or owned and may include a wide variety of property types, such as office buildings, retail space, and industrial facilities.

Commission

The fee charged by a broker or agent for negotiating a real estate or loan transaction. A commission is generally a percentage of the price of the property or loan (such as 3%, 5%, or 6%).

Commitment letter

A formal notification from a lender stating that the borrower's loan has been conditionally approved and specifying the terms under which lender agrees make the loan. Also known as a "loan commitment."

Common Area Assessments

Payments required of individual unit owners in a condominium or planned unit development (PUD) 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 (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.

Community Property

In some Western and Southwestern states, the law specifies that property acquired during a marriage is presumed to be owned jointly by the husband and wife unless acquired as separate property of one spouse or the other. 

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. Comparables help the appraiser determine the approximate fair market value of the subject property.

Compound interest

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

Condemnation

(1) Declaration that a building is unfit for use or is dangerous and must be destroyed;

(2) Taking of private property for a public use (such as a park, street or school) 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 multi-unit building, an undivided interest in the common areas of the project, and sometimes the exclusive use of certain limited common areas.

Condotel Lender

A Condotel is a condominium project that is operated as a hotel with a registration desk, cleaning service and more. The units are individually owned. Unit owners also have the option to place their unit in the hotels rental program where it is rented out like any other hotel room.

Conforming Loan

A home loan with a maximum loan amount of $417,000 that is eligible for purchase by FNMA and FHLMC.

Construction Loan

A short-term, interim loan for financing the cost of home construction. The lender makes payments to the builder at periodic intervals as the work progresses.

Construction Loans

This type of loan is temporary and used for construction of buildings and homes. A construction loan also gives the contractor small amounts of money over the construction period. It is not till the job is completely finished when a permanent loan is used to pay off the rest of the construction.

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