Drew Mortgage Associates - Online Mortgage Dictionary


CC&R's	An acronym for Covenants, Conditions and Restrictions. See COVENANTS, CONDITIONS AND RESTRICTIONS (C C & Rs)
Canceled Check	A check that has been cashed by the bank on which the check was drawn.
Capacity	A customer's financial ability to repay debt. See 3 Cs
CAPS	The maximum increase of an adjustable-rate mortgage period and lifetime. Example: The original loan is made at 10% with a 6% cap. The interest rate on the loan may never exceed 16%, regardless of index changes. See ADJUSTABLE-RATE MORTGAGE (ARM)
Cash Flow	The amount of cash generated from income-producing property or investments after all operating expenses and loan payments have been made.
Cash Value	The amount of money one would receive today by selling an asset in the market place.
Cash-Out	A refinance transaction in which the borrower receives cash that may be used for any purpose.
Cash-Out Explanation Letter	A handwritten, signed and dated letter provided by customers who are receiving cash from the loan to explain how they intend to use that cash. Generally used to verify that borrowers aren't planning to use the cash to incur additional debt that will add to their monthly obligations and decrease disposable monthly income.
Cashier's Check	A check drawn by a bank on itself rather than on an account of a depositor. A cashier's check is generally acceptable to close a sale without waiting for the check to clear.
Ceiling	The highest interest rate that may be assessed or an adjustable-rate loan during the life of the loan based on the start rate and lifetime cap.
Certificate of Occupancy	A certificate issued by a local city government to the property owner stating the building is in proper condition to be occupied.
Certified Copy	A copy attested to be true by the individual or entity holding the original.
Change Date	This is a date established in an adjustable rate loan contract when a new interest rate will be assessed. Also known as adjustment date.
Chapter 13 Bk	Chapter 13 is a debt reorganization plan where debts are repaid under a court-supervised repayment plan. Debtors submit part of their income for distribution among creditors. Also known as the wage-earner plan.
Chapter 7 Bk	A Chapter 7 BK is a straight liquidation bankruptcy where the debtor submits all of their non-exempt assets to the trustee for liquidation; proceeds are disbursed to creditors.
Charge-off	A delinquent credit account with a balance owed that was never fully satisfied and the creditor removed it from the books for accounting purposes even though the debtor still owes payment in full.
Child Support	Periodic payments made under a divorce decree or a written separation agreement for the support of the children.
Closing	A meeting between a lender and borrower or a buyer, seller and lender or their agents when the loan documents are signed and the funds legally change hands. Also known as settlement.
Closing Agent	The party designated to conduct the loan closing, and to ensure the mortgage or deed is recorded and the funds disbursed on time.
Closing Costs	Money paid by the borrower to effect the closing of a mortgage loan, including such costs as title insurance premiums, appraisal fees, lender fees, closing agent fees, recording fees, etc.
Closing Statement	A statement required by Federal law (the Real Estate Settlement Procedures Act) that itemizes all changes imposed on the borrower and seller (if any) in connection with a mortgage secured loan transaction. Also known as a settlement statement, HUD-1 or HUD-1A.
Co-Borrower	A 2nd borrower on a loan.
Collateral	Property pledged by the borrower to secure the repayment of the loan. The lender's claim or lien appears on the title report for the property. See 3 Cs
Combined Loan to Value (CLTV)	The total of all liens on the subject property divided by the appraised value of the property.
Combined Monthly Housing Expense	Monthly expenses for the customer's primary residence, which include rent or mortgage payments, other financing, hazard and flood insurance, mortgage insurance, real estate taxes, utilities and homeowner association dues.
Commercial Loans	Drew understands the need for financing real estate outside of a conventional loan. That’s why we offer commercial loans too. Loans for residential or mixed units over 4 units, commercial office buildings, restaurants or any type of real estate secured financing. We offer attractive loans programs and even have some with No Verification of Income or Assets if needed. Call us today to find out about the “Drew Commercial Financing” programs.
Commercial Property	A property used for business purposes.
Community Property	Property owned equally by a husband and wife. This classification of property is only used in certain states.
Comparable (COMP)	Properties used to determine the value of a specific property for comparative purposes in the preparation of an appraisal.
Compensating Factors	Positive characteristics about an applicant's credit, employment history, etc. that contribute to a loan being a sound risk or investment.
Concession	Special or unusual terms offered by the seller that may warrant the buyer paying a higher price for the property.
Condo Conversion	The nationwide appeal of condo conversions is hitting New England. There is no large down payment requirement for these properties and you will be able to enjoy a beautiful new condo at a reasonable price.
Condominium (CONDO)	A residential property with 2 or more units where each unit owner holds title to a unit and an undivided interest in the common areas of the project.
Condominium Association	An association of owners of condominium units.
Construction Loans	Building a new home? The home will not be ready for 6-12 months. Rates are on the rise? We have the solution Drew Mortgage offers many long-term lock programs that range from 90-450 days. You can take your time making sure the home of your dreams is just right for you and not worry about rates going up. We lock your rate in for you and your protected. With some programs we even have a “float down” option that if rates do fall while your locked in, you can float down to the lower rate. We have attractive construction loan programs that can help you with the financing to build that new dream home with flexible terms and draw periods.
Consumer Credit	Credit owed by the individual, not secured by real estate.
Conventional Loan	A loan that was not underwritten by HUD, the SBA, VA or the FHA.
Conversion Clause	A provision in some Adjustable Rate Mortgages ("ARM") that allows a borrower to change the ARM to a fixed-rate loan at some point during the term.
Conveyance	The written instrument by which title to real property is transferred from one party to another.
Corporation	An artificial person or legal entity created by or under the authority of the law of a state. May have limited liability, perpetual life, freely transferable shares and centralized management.
Cosmetic Repair	Repairs that improve the appearance of the property.
Covenants, Conditions and Restrictions (CC&R's)	Limitations placed on the use and enjoyment of real property. Usually intended to maintain a certain look within a neighborhood and common in subdivisions, PUDS or condominium communities.
Credit Authorization Letter	A letter signed by the borrower that authorizes a lender, to conduct a credit investigation.
Credit Bureau	A company that collects and organizes information about an individual's credit and payment habits. The 3 national credit bureaus are Experian, TransUnion and Equifax.
Credit Denial Letter	A letter that is sent to a credit applicant advising him or her that the application has been denied and the reason for the denial.
Credit Depth	The number of years a borrower has established credit. This information shows up on the borrower's report.
Credit History	The history of whether the borrower has met financial obligations on time in the past.
Credit Length	The length of time a customer has had established credit.
Credit Report	A report provided by a credit reporting bureau that provides a detailed account of the applicant's credit history.
Credit Score	A numerical assessment assigned to the customer by credit bureaus that represents a measurement of the customer's overall credit rating. The scores are weighted and range from approximately 365 to 840. Low scores reflect a "high risk", while higher scores reflect a "lower risk". Each credit bureau has its own credit score system.
Creditor	An individual or entity to whom money is owed.
Current Libor Index	A interest rate indicator used in adjustable-rate mortgage loans. The LIBOR Index changes daily and is published in The Wall Street Journal.