Capital Gains - Profit received from the sale of an asset that has been held for more than six months since purchase. The distinction is made between capital gain and ordinary income because the former are taxed at a lower federal income tax rate. Profit form property held less than six months is taxed as ordinary income.
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Caps (Interest Rate) - Borrower safeguards which limit the amount by which the interest rate on an adjustable rate loan can change. Often times there are annual and life-time limitations.
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Caps (Payment) - Borrower safeguards which limit the amount by which the monthly payments on an adjustable rate loan can change.
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Certificate of Eligibility - The document given to qualified veterans which entitles them to VA guaranteed loans for homes. Certificates of eligibility may be obtained by sending form VA DD-214 (Separation Paper) to the local VA office with VA form 1880 (request for Certificate of Eligibility.)
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Certificate of Reasonable Value (CRV) - An appraisal issued by the Veteran Administration showing the property's current market value.
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Certificate of Title - A certificate issued by a title company or a written opinion rendered by an attorney that the seller has good marketable and insurable title to the property which he is offering for sale. A certificate of title offers no protection against any hidden defects in the title which an examination of the records could not reveal. The issuer of a certificate of title is liable only for damages due to negligence. The protection offered a homeowner under a certificate of title is not as great as that offered in a title insurance policy.
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Certificate of Veteran Status - The document given to veterans or reservists who have served 90 days of continuous active duty (including training time). It may be obtained by sending VVA form DD- 214 to the local VA office along with form 26-8261a (request for certificate of veteran status. This document enables veterans to obtain lower down payments on certain FHA insured loans).
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Chain of Title - The report of all owners and encumbrances and liens affecting in the history of title to a tract of land.
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Claim - An adverse right or interest asserted by one party against another or against an insurer or indemnitor. Claims may arise from unpaid debts or taxes, as well as from hidden title defects such as fraud, forgery, missing heirs, etc.
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Clear Title - Real property ownership free of liens, defects, encumbrances or claims.
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Closing Agent - (1) Entity authorized by the lender to conduct the property transaction when the buyers execute the mortgage, promissory note, settlement statement and other required documents, which may be a title company or an attorney; (2) Title company or attorney who oversees execution of documents by the buyer and seller and who disburses funds to pay of existing loans, liens, etc.; (3) the closing agent represents the lender.
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Closing Costs - The numerous expenses which buyers and sellers normally incur to complete a transaction in the transfer of ownership of real estate. These costs are in addition to price of the property and are items prepaid at the closing day.
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Closing Day or The Closing - The day on which the formalities of a real estate sale are concluded. The certificate of title, abstract, and deed are generally prepared for the closing by an attorney and this cost charged to the buyer. The buyer signs the mortgage, and closing costs are paid. The final closing merely confirms the original agreement reached in the agreement of sale.
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Closing Statement (HUD-1 Settlement Statement) - A form used at closing which gives an account of the funds received and disbursed at the closing, including escrow deposits for taxes, hazard insurance, and mortgage insurance for the escrow account, etc. See listing of some other disbursements, under Closing Costs.
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Cloud On Title - A title in which there is an outstanding claim or encumbrance which affects the marketability of title.
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Commission - Money paid to a real estate agent or broker by the seller as compensation for finding a buyer and completing the sale. Usually it is a percentage of the sale price -- 6 to 7 percent on houses, 10 percent on land.
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Commitment for Title Insurance - A written promise to insure a tract of land which is prepared by the title insurance company, after the title is searched in the public records, indicating the status of the title and setting forth requirements to be satisfied upon closing.
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Commitment Letter from a Lender - A written agreement in which the lender agrees to lend money if the borrower meets certain conditions.
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Common Elements - In a Condominium or Planned Urban Development (PUD), such as a Homeowner's Association, any land or improvements owned jointly by all the owners in the project, such as a pool or clubhouse. Common Elements can also include grassy areas and walkways if the owners in the condo or PUD collectively pay for maintenance of the area.
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Condemnation - The taking of private property for public use by a government unit, against the will of the owner. Condemnation may also be a determination by a governmental agency that a particular building is unsafe or unfit for use.
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Conditional Offer - An offer to buy a property, but subject to certain circumstances.
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Condominium - A form of ownership of real property, wherein title to a particular unit is vested in an entity (i.e., an individual or couple), together with a proportionate interest in certain common areas. Title to the common areas is in terms of percentages and refers to the entire project, less the separately owned units
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Construction Loan - A short term loan to pay for the construction of buildings or homes. These are usually designed to provide periodic disbursements to the builder or contractors as he progresses.
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Contract (LAND) Sale or Deed - A contract between purchaser and a seller of real estate to convey title after certain conditions have been met. It is a form of installment sale.
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Contractor - In the construction industry, a contractor is one who contracts to erect buildings or portions of them. There are also contractors for each phase of construction: heating, electrical, plumbing, air conditioning, road building, bridge and dam erection, and others.
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Conventional Mortgage - A mortgage loan not insured by HUD or guaranteed by the Veterans' Administration. It is subject to conditions established by the lending institution and State statutes. The mortgage rates may vary with different institutions and between States. (States have various interest limits.)
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Conveyance - The legal transfer of title to property from one person to another.
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Cooperative Housing - An apartment building or a group of dwellings owned by a corporation, the stockholders of which are the residents of the dwellings. It is operated for their benefit by their elected board of directors. In a cooperative, the corporation or association owns title to the real estate. A resident purchases stock in the corporation which entitles him to occupy a unit in the building or property owned by the cooperative. While the resident does not own his unit, he has an absolute right to occupy his unit for as long as he owns the stock. Therefore, when one of these stockholders wishes to "sell" his apartment, he is actually selling his share of stock in the corporation and conveying the right to live in the apartment.
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Covenant - A formal agreement or contract between two parties in which one party gives the other certain promises and assurances, such as covenants of warranty in a warranty deed.
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Credit Report - A report documenting the credit history and current status of a borrower's credit standing.
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Curtesy - A husband's fractional life or fee estate in the property of his deceased wife. By statute, in most states it is a life estate or fee simple in one third of the land the wife owned during their marriage.
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