Mortgage Definitions (B - C)

Balloon Mortgage
A loan which is amortized for alonger period than the term of the loan. Usually this refers to a thirty year amortization and a five or seven year term. At the end of the term of the loan, the remaining outstanding principal on the loan is due. This final payment is know as a balloon payment.

Balloon Payment
The final lump sum paid at the maturity date of a balloon mortgage.

Biweekly Payment Mortgage
A plan to reduce the dent every two weeks(instead of the standard monthly payment schedule) The 26(or possibly 27) biweekly payments are each equal to one ohalf of the monthly payment required if the loan wre a standard 30-year fixed rate mortgage. The result for th borrower is an substantial savings in interest.

Blanker Mortgage
A mortgage covering at least two pieces of real estate as security for the same mortgage.

Borrower(Mortgagor)
One who applies for receives a loan in the form of a mortgage with the intention of repaying the loan in full.

Bridge Loan
A second trust tha tis collateralized by the borrower's present home allowing the proceds to be used to close on a new house before the present home is sold. Also known as "swing loan"

Broker
An individual in the business of assisting in arranging funding or negotiating contracts for a client but who does not loan the money himself. Brokers usually charge a fee or receive a commission for their services.

Buy Down
When the lender and or th the home builder subsidized the mortgage by lowering the interst rate during the first few years of the loan. While the payments are initiall low, they will increase when the subsidy expires.

Cash Flow
The amount of cash derived over a certain period of time form an income prducing property. The cash flow should be large enough to pay the expenses of the income producing property(mortgage payment, maintenance, utilities, etc...)

Caps(interest)
Consumer safeguards which limit the amount of charge to the interst rate for an adjustable rate mortgage.

Caps (payment)
Consumer sageguards which limit the amount of change to the monthly payments for an adjustable rate mortgage.

Certificate of Eligibility
The document given to qualified veterans which entitles them to VA guaranteed loans for homes, business and mobile homes. Certificates of eligibilty may be obtained by sending form DADA(Separation paper) to the local VA office with VA form 1880(request for Certificate of Eligility.)

Certificate of Reasonable Value (CRV)
An appraisal issued by the Veterans Administration showing the property's current market value.

Certificate of Veteran Status
The document given to veterans or reservists who have served 90 days of contunous active duty (including training time). It may be obtained by sending DD 214 to lthe local VA office with form 26-8261� (request for Certificate of Veteran Status). This document enables veterans to obtain lower down paymetns on certain FHA insured loans.

Change Frequency
The frequency (in months) of payment and/or interest rate changes in an adjustable rate mortgage(ARM)

Closing
The meeting between the guyer, seller and lender or their agents where the property and funds legally change hands, also called settlement. Closing costs usually include an orgination fee, discount points, appraisal fee, title search and insurance, suurvey, taxed, deed recording fee, credit report charge and other costs assessed at settlement. The cost of closing usually are about 3 percent to 6 percent of the mortgage amount.

Closing Cost
Expenses over above the price of the property that are incurred by buyers and sellers when transferring ownership of a property. Closing costs normally include an origination fee, property taxes, charges for title insurance and escrow cost, apprasial fees, etc. Closing costs will vary according to th area country and the lenders used.

COFI
And adjustable-rate mortgage with a rate that adjusts based on a cost-of-funds index, often the 11th District Cost of Funds.

Construction Loan
A short term interim loan to pay for th econstruction of buildings or homes. These are usually designed to provide periodic disbursements to the builder as he or she progresses.

Consumer Reporting Agency (or Bureau)
And organization tha thandles the preparation of reports used by lenders to determine a potential borrower's credit history. The agency gets data for these reports form a credit repository and other sources.

Contract Sale or Deed
A contract betwen purchaser and a seller of real estate to convey title after certain conditions have been met. It is a form of instalment sale.

Conventional Loan
A mortage not insured by FHA or guaranteed by VA

Conversion Clause
A provision in an ARM allowing the loan to be converted to a fixed-rate at some poieint during the term. Usually conversion is allowded at the end of the fisrt adjustement period. The conversion feature may cost extra.

Credit Report
A report documenting the creidt histoty and current status of a borrower's credit standing.

Credit Risk Score
A credit risk score is a statistical summary of the information contained in a consumer's credit report. The most wellknown type of credit risk score is teh Fair Isaac or FICO score. This form of credit scoring is a mathematical summary calculation that assigns numerical values to various pieces of information in the credit report. The overall credit risk score is highlly relative in teh credit underwriting process for a mortgage loan.