Cap
In adjustable rate mortgages, a limit placed on adjustments to protect the borrower from large increases in the interest rate or the payment level.

Certificate of Occupancy
A permit required under the building codes of many local governments which indicates that the property passes a final inspection. The permit indicates that all applicable building codes have been met and that the structure is suitable for occupancy.

Closing
The act of transferring ownership of a property from seller to buyer in accordance with a sales contract. The time when a closing takes place.

Closing Costs
Various fees and expenses payable by the seller and buyer at the time of a real estate closing (also termed transaction costs).

Closing Date
The date on which the seller delivers the deed and the buyer pays for the property.

Closing Statement
An accounting of funds from a real estate sale, made to both the seller and the buyer separately. Most states require the broker to furnish accurate closing statements to all parties to the transaction.

Commission
An amount earned by a real estate broker for his services. The official body that enforces real estate license laws.

Commitment
A pledge or promise; a firm agreement. Example: Collins obtains a commitment from a savings and loan association for a $ 1 00,000 loan on a house she wants to buy. She is then assured of the loan so business will proceed to closing.

Commitment Fee
A charge required by a lender to lock in specific terms on a loan at the time of application.

Commitment Letter
An official notification to a borrower from a lender indicating that the borrower's loan application has been approved and stating the terms of the prospective loan.

Common Areas
Areas of a property that are used by all owners or tenants.

Community Association
General name for any organization of property owners to oversee some common interest. In a condominium or planned unit development, the association has the responsibility of managing the common elements in the project. A homeowners' association may be established in a subdivision to enforce deed covenants.

Conforming Mortgage Loan
Any mortgage loan that's at or below the amount that Fannie Mae and Freddie Mac can purchase and/or securitize in the secondary mortgage market. For 2001, the loan limit is $275,000. In 2000, it was $252,700.

Consumer Confidence Index
A measure of confidence that households have in the economy. Released by the Conference Board late in the month.

Consumer Price Index (CPI)
A measurement of the average change in prices paid by consumers of a fixed market basket of a wide variety of goods and services. The broadest, and most quoted, CPI figure reflects the average change in the prices paid by urban consumers (about 80% of the U.S. population). The so-called "core CPI" excludes the volatile food and energy sectors in an attempt to determine the underlying rate of inflation. Strictly speaking, the CPI is not a "cost of living" index because its fixed market basket does not allow for the substitution of goods and services due to price changes. the cpi is released by the bureau of labor statistics in mid-month for the previous month.

Conventional Loan
A mortgage loan other than one guaranteed by the Veterans Administration or insured by the Federal Housing Administration. A fixed-rate, fixed-term mortgage loan.

Convertible Arm
An adjustable rate mortgage that offers the borrower the option to convert payments to a fixed-rate schedule at a specified period within the term of the loan. Conversion is made for a nominal fee, and the interest rate on the fixed-rate loan is determined by a rule specified in the ARM loan agreement.

Cosigner
Same as accommodation party.

Covenants
Promises written into deeds and other instruments agreeing to performance or nonperformance of certain acts, or requiring or preventing certain uses of the property.

Credit
In finance, the availability of money. In accounting, a liability or equity entered on the right side of the ledger.

Credit Rating (Report)
An evaluation of a person's capacity (or history) of debt repayment. Generally available for individuals from a local retail credit association; for businesses publicly held by companies such as Dunn & Bradstreet; and for - bonds by Moody's, Standard & Poors, and Fitch's. individuals have access to their own files.

Creditor
One who is owed money.