Call Option: A loan feature that allows the lender to require repayment of the loan in full before the term of the loan is up.

Capital: (1) Money used to create income, either as an investment in a business or an income property. (2) The money or property comprising the wealth owned or used by a person or business enterprise. (3) The accumulated wealth of a person or business. (4) The net worth of a business represented by the amount by which its assets exceed liabilities.

Capital Expenditure: The cost of an improvement made to extend the useful life of a property or to add to its value, such as adding a room. The cost of repairing a property is not a capital expenditure. Capital expenditures are appreciated over their useful life; repairs are subtracted from income for the current year.

Capital Improvement: Any structure or component erected as a permanent improvement to real property that adds to its value and useful life. See Capital Expenditure.

Caps: Limits on changes in ARM interest rates or monthly payments, either in an adjustment period or over the life of the loan.

Caps (interest): Consumer safeguards which limit the amount the interest rate on an adjustable rate mortgage can change in an adjustment interval and/or over the life of the loan.

Caps (payment): Consumer safeguards which limit the amount monthly payments on an adjustable rate mortgage may change. Since they do not limit the amount of interest the lender is earning, payment caps may cause negative amortization.

Cash Out: A refinance for more than the balance of the current mortgage. The excess money taken out reduces the borrower’s equity.

Cashier’s Check (or Bank Check): A check whose payment is guaranteed because it was paid for in advance and is drawn on the bank’s account instead of the customer’s.

CC and Rs : See Covenants, Conditions and Restrictions

Ceiling: The maximum allowable interest rate of an adjustable rate mortgage.

Certificate of Eligibility: Document issued by the Veterans Administration to qualified veterans which entitles them to VA-guaranteed loans. Obtainable through local VA offices by submitting form DD-214 (Separation Paper) and VA form 1880 (request for Certificate of Eligibility).

Certificate of Occupancy: - Document issued by local government agency stating that a property meets the requirements of health and building codes.

Certificate of Reasonable Value (CRV): A property appraisal performed by a VA approved appraiser which establishes the limit on the principal of the VA loan.

Certificate of Title: Written opinion of the status of title to a property, given by an attorney or title company. This certificate does not offer the protection given by title insurance.

Certificate of Veteran Status: Document given to veterans or reservists who have served 90 days of continuous active duty (including training time) which enables them to obtain lower down payments on certain FAHFHA-insured loans. Obtainable through local VA offices by submitting form DD-214 (Separation Paper) with form 26-8261a (request for certificate of veteran status.)

Certified Check: A check drawn on the issuer's account for funds that have been segregated by the bank, thus guaranteeing sufficient funds for payment.

Chain of Title: The chronological order of conveyance of a property from the original owner to the present owner.

Clear Title: A marketable title, free of clouds and disputes.

Closing (or Settlement): Meeting between the buyer, seller and lender or their agents at which property and funds legally change hands.

Closing Agent: Neutral third party appointed to act as a custodian for documents and funds during the transfer of property from seller to buyer. Depending on local law and custom, this could be an attorney, escrow agent or title company.

Closing Costs: Fees incurred in a real estate or mortgage transaction paid by borrower and/or seller at the closing of the transaction. Various expenses (over and above the price of the property) incurred by buyers and sellers in transferring ownership of a property. Closing costs normally include items such as broker's commissions, discount points, origination fees, attorney's fees, taxes, title insurance premiums, escrow agent fees, and charges for obtaining appraisals, inspections and surveys. Closing costs will vary according to the area of the country. Lenders or real estate professionals often provide estimates of closing costs to prospective homebuyers even before the HUD-1 settlement statement is delivered.

Closing/Settlement Statement: - A form prepared by the closing agent that itemizes the closing costs associated with purchasing or refinancing a home. Also see HUD-1.

Cloud on Title: An outstanding claim or encumbrance that, if valid, would affect or impair the owner's title.

Coinsurance: A sharing of insurance risk between the insurer and the insured. Coinsurance depends on the relationship between the amount of the policy and a specified percentage of the actual value of the property insured at the time of the loss.

Coinsurance Clause:A provision in a hazard insurance policy stating the minimum amount of coverage that must be maintained - as a percentage of the total value of the property - in order for the insured to collect the full amount of a loss.

Combined Loan to Value (CLTV):The percentage of the property valued borrowed through a combination of more than one loan (for example, first mortgage and home equity line of credit. Mathematically, combined loan and line of credit amounts/property value = Combined Loan to Value Ratio).

Collateral: - Assets that secure a loan (in the case of a mortgage, real property serves as collateral).

Commission: Money paid to a real estate agent or broker by the seller (usually 6-7% of the sale price of the house).

Commitment: A formal offer by a lender to make a loan under certain terms or conditions to a borrower.

Compound Interest: Interest paid on the principal balance and on the accrued and unpaid interest.

Condemnation:(1) Declaration that a building is unfit for use or is dangerous and must be destroyed; (2) taking of private property for a public use (such as a park, street or school) through an exercise of the right of eminent domain.

Condominium: A form of property ownership in which the homeowner holds title to an individual dwelling unit and an interest in common areas and facilities of a multi-unit project.

Conforming Loan: A mortgage loan eligible for purchase by the two Federally sponsored housing agencies, Fannie Mae and Freddie Mac.

Construction APR: A calculation that expresses the cost of a mortgage loan as a yearly rate (according to a federally mandated procedure) over the life of the loan, including the construction phase. The APR calculation takes into account monthly interest payments, mortgage insurance, points, and certain fees paid at origination. It generally results in a rate higher than the stated interest rate on the Note, as well as the estimated APR disclosed on the permanent financing phase of the loan term. You may receive two APRs, one for the construction period of your loan and the other for the permanent financing of your loan or the APR can be combined for both the construction and permanent periods of your loan.

Construction Loan: A short term interim loan to fund the construction of buildings or homes, which usually advances the money in installments as work progresses.

Construction-to-Permanent (CTP) Loan: A construction loan that automatically converts to a permanent loan at the end of the construction period.

Contract of Sale: The agreement between the buyer and seller on the purchase price, terms, and conditions of a sale.

Contingency: A condition which must be satisfied before a contract is legally binding--before a sale can close.

Conventional Loan: A mortgage not insured by the FHA or guaranteed by the VA.

Conversion Clause: A provision in some ARMs that allows changing an ARM to a fixed-rate loan, usually after the first adjustment period. The new fixed rate is set at based on a formula tied to current rates, and there may be a charge for the conversion feature.

Convertible ARMs: ARMs with the option of conversion to a fixed loan during a given time period (see "Conversion Clause").

Conveyance: The transfer of a deed, lease or mortgage.

Corporate Relocation: Arrangements under which an employer moves an employee to another area 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 of Funds Index (COFI): A common index used in adjustable rate loans based on the weighted-average interest rate paid for deposits by savings institutions that are members of the 11th Federal Home Loan Bank District.

Courier / Mail Fees: Fees charged by the closing agent for shipment of loan documents and related paperwork. IndyMac Bank does not pass our own courier and mail fees to you.

Covenants, Conditions and Restrictions (CCandRs): A document that defines the use, requirements and restrictions of a condominium or Planned Unit Development (PUD).

Credit Report: A report detailing the credit history of a prospective borrower, used by lenders to help determine creditworthiness.

Credit Report Fee: Fee paid to a credit reporting agency so that we can obtain a copy of your credit history and credit score.