Cap: The limit of how much the interest rate or monthly payment can change either at each adjustment or over the life of the mortgage.

Cash reserves: Lenders typically require buyers to have enough cash left over after purchasing a home to make two mortgage payments, to cover a financial emergency.

CC & R’s: Covenants, Conditions and Restrictions. A document that controls the use, requirements and restrictions of a property.

Certificate of Reasonable Value (CRV): A document that establishes the maximum value and loan amount for a VA guaranteed loan.

Certificate of Title: A statement provided by an abstract company title or attorney stating that the title to real estate is legally held by the current owner.

Closing: A meeting at which a sale of a property is finalized by the buyer signing the mortgage documents and paying closing costs.

Closing Costs: Generally total from 2 percent to 5 percent of the home’s purchase price; separate from the down payment. Covers a number of costs including loan document processing fees, appraisal report fees, credit report fees, etc.

Closing Statement: The financial disclosure statement that accounts for all of the funds received and expected at the closing of the escrow, including deposits or taxes, hazard insurance and mortgage insurance.

Collateral: An asset (such as a car or home) that guarantees the repayment of a loan.

Commission: The fee charged by a broker or agent for providing services related to a real estate transaction such as procuring the property, bringing the parties together and negotiating a purchase contract or loan.

Community Property: One way to hold title to your home.

Condominium: A form of real estate ownership. The owner receives title to a particular unit and has a proportionate interest in certain common areas. The unit itself is generally a separately owned space whose interior surfaces (walls, floors, and ceilings) serve as its boundaries.

Contingencies: Conditions, contained in the Purchase Agreement, which outline the obligations the seller and buyer must fulfill before sale of the property is completed. Can concern the results of your effort to obtain financing, an inspector’s opinion of the condition of the property, etc.   For instance, a sales agreement may be contingent upon the buyer obtaining financing.

Conventional Loan: A mortgage loan, which is not insured or guaranteed by a governmental agency.

Conversion Clause: A provision in some ARMs that enables you to change an ARM to a fixed-rate loan, usually after the first adjustment period. The new fixed rate is generally set at the prevailing interest rate for fixed rate mortgages. This conversion feature may cost extra.

Cooperative: A form of multiple ownership in which a corporation or business trust entity holds title to a property and grants occupancy rights to shareholders by means of proprietary leases or similar agreements.

Cosigner: If your credit is less than stellar, it may be necessary for you to have a cosigner – that is a friend or relative willing to assume the risk (and actual indebtedness for) your mortgage.

Credit Report: The main basis for a lender to determine your "credit worthiness." A historical list of your credit use and bill payment performance.

Courtesy of Sonata Realty