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A: Why use a Connecticut Mortgage Broker?
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Mortgage Glossary
Acorn Home Mortgage works with homeowners from prequalification to closing. Whether you are a First Time Home Buyer in Connecticut or trading up, we will assist you to find the best mortgage product for your specific needs. It is about what you can afford and your monthly payment. We personally meet our clients in CT.
Considering refinancing your Connecticut Mortgage, then let our experienced mortgage professionals evaluate your mortgage and debts to determine if you can save at least a month's worth of salary? Refinancing is all about restructuring your total debt to reduce your total monthly payment.
A B C D E F G H I J L M N O P Q R S T U V W Y Z
"C" Paper Loans
A CT mortgage for borrowers that have very little documented income, poor credit or a recent bankruptcy. Interest rates will usually be about 3 to 5% higher than the current rates. The Loan to Value Ratio on this type of Connecticut home loan usually ranges between 65% and 75% depending on the lender.
Call option
A provision in the CT mortgage agreement that gives the lender the right to call, or request, the CT mortgage due and payable at the end of a specified period, for any reason.
Cap
A provision in an adjustable-rate CT mortgage (ARM) agreement that limits how much the interest rate or CT mortgage payments may increase.
Capital Gain
The taxable profit resulting from the sale of a property.
Capital improvement
Any structure or component erected as a permanent improvement to real property that adds to its value and useful life.
Cash Flow
The amount of cash derived over a certain period of time from an income-producing property. The cash flow should be large enough to pay the expenses of the income producing property (CT mortgage payment, maintenance, utilities, etc.).
Cash on Hand
Cash held by a borrower that is not verifiable in a bank or other holding institution. This money is very rarely able to be counted as an asset.
Caps (interest)
Consumer safeguards which limit the amount the interest rate on an adjustable rate CT mortgage which may change per year and/or the life of the Connecticut home loan.
Caps (payment)
Consumer safeguards which limit the amount monthly payments on an adjustable rate CT mortgage may change.
Cash-out refinance
A refinance transaction in which the amount of money received from the new Connecticut home loan exceeds the total of the money needed to repay the existing first CT mortgage, closing costs, points and the amount required to satisfy any outstanding subordinate CT mortgage liens. In other words, a refinance transaction in which the borrower receives additional cash that can be used for any purpose.
Cash Reserves
Liquid assets (savings, money market funds, etc.) that the borrower retains after making the down payment and paying closing costs for his Connecticut home loan.
Census Tract
A geographical area designated by the U.S. Bureau of Census for purposes of identifying the location of a specific property. The Home Mortgage Disclosure Act (HMDA) requires lenders report loan application data by the census tract in which the property is located.
Certificate of Eligibility
The document given to qualified veterans which entitles them to VA guaranteed Connecticut home loans for homes, business and mobile homes. Certificates of eligibility may be obtained by sending form DD-214 (Separation Paper) to the local VA office with VA form 1880 (request for Certificate of Eligibility)
Certificate of Occupancy
Written authorization given by a local municipality that allows a newly completed structure to be inhabited.
Certificate of Reasonable Value (CRV)
An appraisal issued by the Veterans Administration showing the property's current market value
Certificate of title
A statement provided by an abstract company, title company or attorney, stating that the title to real estate is legally held by the current owner.
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 DD 214 to the local VA office with form 26-8261a (request for certificate of veteran status. This document enables veterans to obtain lower down payments on certain FHA insured Connecticut home loans).
Chain of title
The chronological order of the title's transfer from the original owner to the present owner.
Change Frequency
The frequency (in months) of payment and/or interest rate changes in an adjustable-rate CT mortgage (ARM).
Chattel
An item of personal property such as a lighting fixture.
Clear title
A title that is free of liens or legal questions as to ownership of the property.
Closer
Your closer is your contact at Acorn Home Mortgage CT. Your closer is responsible for reviewing and clearing your title work and any other legal documentation applicable to your CT mortgage. Once your title is clear and your underwriter has issued a clear to close, your closer will arrange for a closing.
Closing
The meeting between the buyer, seller and lender or their agents where the property and funds legally change hands, also called settlement. Closing costs usually include an origination fee, discount points, appraisal fee, title search and insurance, survey, taxes, 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 CT mortgage amount.
Closing cost item
A fee that a homebuyer must pay at closing for a single service, tax or product (ie. origination fees and attorney's fees). Many closing cost items are included as numbered items on the HUD-1 statement.
Closing Costs
These are expenses - over and 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 costs, appraisal fees, etc. Closing costs will vary according to the area country and the lenders used. Connecticut Mortgage Closing Costs
Closing statement
Also referred to as the HUD1, it is the final statement of costs incurred to close on a Connecticut home loan or to purchase a home.
Cloud on title
Any conditions found during the title search that adversely affect the title to real estate. Clouds on title usually cannot be removed except by a quitclaim deed or court action.
Co-borrower
A person who signs a promissory note (CT mortgage) along with the borrower. A co-borrower's signature guarantees that the Connecticut home loan will be repaid, because the borrower and the co-borrower are equally responsible for the repayment. Also referred to as a co-maker or co-signor.
COFI
Adjustable-rate CT mortgage with rate that adjusts based on a cost-of-funds index, often the 11th District Cost of Funds.
Collateral
An asset (such as a car or a home) that guarantees the repayment of a Connecticut home loan. The borrower risks losing the asset if the Connecticut home loan is not repaid according to the terms of the Connecticut home loan contract.
Collection
The efforts used to make a delinquent CT mortgage current and to file the notices needed to proceed with foreclosure. .
Combined Loan to Value (CLTV)
The combined loan-to-value ratio is the sum of the balance of the loan in first position and all subordinate financing as a percentage of the value of the property.
Commission
The fee charged by a broker or agent for negotiating a real estate or Connecticut home loan transaction. A commission is generally a percentage of the price of the property or Connecticut home loan. .
Commitment
An agreement between the lender and borrower, an approval of the CT mortgage to close at a future date subject to specific terms and conditions.
Commitment Fee
A fee paid usually at the time an interest rate is locked in. It commits both the lender and borrower to a specific interest rate for a specific time. Some commitment fees are refundable at closing. This fee is also known as the "up front lock-in fee."
Commitment letter
A document provided by the lender that details the terms and conditions of the loan approval for the borrower. See CT mortgage Commitment Letter.
Common areas
Those portions of a building, land and amenities that are owned (or managed) by a planned unit development (PUD)/condominium project's homeowners association (or a cooperative project's cooperative corporation) and 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. .
Co-mortgager
Another term to describe a Co-borrower.
Community Home Improvement mortgage loan
An alternative financing option that allows low to moderate income homebuyers to obtain 95 percent financing for the purchase and improvement of a home in need of modest repairs. The repair work can account for as much as 30 percent of the appraised value.
Community property
In some western and southwestern states, a form of ownership under which property acquired during a marriage is presumed to be owned jointly unless acquired as separate property of either spouse. .
Comparables
An abbreviation for "comparable properties." Comparables are recently sold properties with traits similar to those of the property being purchased, ie. similar size, in a nearby location, with similar amenities. These properties can be used as a base comparison to help the appraiser determine the approximate fair market value of the property being purchased. .
Community Reinvestment Act
Federal legislation to offer CT mortgages in areas historically undeveloped by lenders. This legislation enables lenders to be more flexible in the loan programs they offer low income and minority people.
Comparable
Recently sold properties that are used in the appraisal to determine the fair market value of the subject property. These comparable properties are approximately the same size, location and have similar amenities. Also known as "comps."
Comparative Market Analysis
A report prepared by a real estate company that shows recent sales prices of comparable homes that are in the neighborhood in which a client wants to purchase or sell a home. This report will also show the prices of properties currently listed for sale in the same neighborhood.
Condominium
A real estate project in which each unit owner has title to a unit in a building, an undivided interest in the common areas of the project and the exclusive use of certain limited common areas. When purchasing a condominium, lenders may have specific guidelines for providing a mortgage on a condo. The percent of owner occupied units is always required by the lender. Fannie Mae will allow up to 40% of the units to be non-owner occupied (leased to tenants). It is very important that the percentage of owner occupied units be know by the buyer at the beginning. If the unit has more than 40% of the condos leased, then a portfolio type of lender will have to be used. (A lender who will not sell the mortgage to the secondary market - see also Portfolio Lender). Lenders will also want documentation that the building has substantial financial reserves and a good record of payment as a condo association.
Condominium conversion
The changing of a rental property (two or more units) to the condominium form of ownership. Physical changes, as well as paperwork, may be necessary to conform to building and safety codes. .
Condominium Declaration
The basic condominium document that must be registered by the original property owner prior to selling the first unit. This document describes each unit, common areas and specifies elements of ownership that permanently govern its operation. Also known as a master deed.
Conforming CT mortgage loan
Any Connecticut home loan that meets the criteria and limits set forth by the largest buyers of Connecticut home loans, Fannie Mae and Freddie Mac. .
Constant Renewal
An insurance renewal with the premium amount based on the original amount of the loan-not on the outstanding balance.
Construction Escrow
A title company pays the contractors for the lender. The title company also collects contractor's affidavits and lien waivers that the law requires. Before each draw of funds, the title company will update the title search to validate that no mechanic's liens have been filed.
Construction Financing
A short term loan for financing the cost of construction. The lender will make payments to the builder at intervals as the work progresses, as evidenced through third party inspection certificates of completion.
Construction loan
A short term interim Connecticut home loan to pay for the construction of buildings or homes. These are usually designed to provide periodic disbursements to the builder as he or she progresses.
Construction Loan Draw
The partial distribution of construction loan, based on the schedule of payments in the loan agreement.
Consumer Reporting Agency (or Bureau)
An organization that handles the preparation of reports used by lenders to determine a potential borrower's credit history. The agency gets data for these reports from a credit repository and from other sources.
Contingency
A condition that must be met before a contract is legally binding. For example, homebuyers often include a contingency that specifies that the contract is not binding until they obtain a satisfactory home inspection report from a qualified home inspector.
Contract 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.
Conventional Connecticut home loan or CT mortgage
A CT mortgage not insured by FHA or guaranteed by the VA.
Conversion Clause or Convertibility Clause or Option
A provision in an ARM allowing the Connecticut home loan to be converted to a fixed-rate at some point during the term. Usually conversion is allowed at the end of the first adjustment period. The conversion feature may cost extra.
Convertible ARM
An adjustable-rate CT mortgage (ARM) that can be converted to a fixed-rate CT mortgage under specified conditions. .
Conveyance
The transfer of title to real estate from one person to another by a written document such as a deed.
Cooperative (co-op)
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. .
Corporate relocation
Arrangements under which an employer moves an employee to another location as part of the employer's normal course of business, or under which it transfers a substantial part or all of its operations and employees to another area because it is relocating its headquarters or expanding its office capacity. .
Cost Approach to Value
An appraisal method by which the value of a property is calculated by estimating the replacement cost of the improvements, deducting the estimated depreciation then adding the value of the land as estimated by use of the market data approach.
Cost of funds index (COFI)
An index that is used to determine interest rate changes for certain adjustable-rate CT mortgage (ARM) plans. It represents the weighted-average cost of savings, borrowings and advances of the 11th District members of the Federal Home loan Bank of San Francisco. .
Counter-offer
In a sales contract negotiation, a new offer made in response to an offer received. The counter-offer terminates the original offer.
Coupon Rate
The annual interest rate shown on the face of a CT mortgage note.
Covenant
A clause in a CT mortgage that obligates or restricts the borrower and that, if violated, can result in foreclosure. .
Covenants, Conditions and Restrictions (CC&Rs)
These are used to designate restrictions on the use of the land and provide penalties for failure to comply. They are used by subdivider on newly divided areas. They include items such as setbacks and easements. They are usually recorded and disclosed in an investigation of public records.
Credit
An agreement in which a borrower receives something of value in exchange for a promise to repay the lender at a later date. .
Credit bureau
An agency that keeps your credit record on file. See also Credit Reporting Agency and Credit Repository. .
Credit history
A record of an individual's open and fully repaid debts. A credit history helps a lender to determine whether a potential borrower has a history of repaying debts in a timely manner. .
Credit Officer
A credit officer has the authority to approve or decline a Connecticut home loan. The credit officer uses the documentation that your underwriter collects from you and decides whether or not your Connecticut home loan is approved. See also Underwriting and Underwriter. .
Credit Rating
A rating given to a person or business to establish credit worthiness based on present and past financial conditions.
Credit Report
A report documenting the credit history and current status of a borrower's credit standing.
Credit reporting agency
Company that collects information from several credit repositories, merges all the information and reports it in one form - merged credit report.
Credit repository
An organization that gathers, records, updates and stores financial information on an individual's credit history and reports it in one form - in-file credit report.
Credit Risk Score
A credit risk score is a statistical summary of the information contained in a consumer's credit report. The most well known type of credit risk score is the 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 highly relative in the credit underwriting process for a CT mortgage loan.
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