Abstract
A document detailing the financial history of the property, including ownership changes, title changes, mortgages, liens, forfeitures, etc. Back to alphabetical list

Addendum
A document detailing changes to a contract. Back to alphabetical list

Adjustable Rate Mortgage (ARM)
A mortgage with a rate that varies according to an established benchmark, such as the prime lending rate. Many have a cap and may include a one-time option to lock the rate at a set amount. Back to alphabetical list

Annual Percentage Rate (APR)
The yearly interest cost of a loan. Monthly mortgage payments include an interest rate equal to 1/12 the APR. Back to alphabetical list

Cap
In an ARM, the highest the interest rate can rise or the amount a payment can increase over the life of the loan. Back to alphabetical list

CC&Rs
Codes, Covenants, and Restrictions are the rules stating your rights and duties regarding your property when you purchase property that includes property held in common with other owners in the subdivision or building. Back to alphabetical list

Closing
The meeting at which the money and property title change hands. Closing costs include fees for the title search, appraisal, survey, loan origination, points, deed recording, credit report, notary, and possible other charges as well. Also called settlement. Back to alphabetical list

Construction Loan
A short-term loan to finance the construction of a home. The lender makes periodic payments directly to the builder as work progresses. These loans are more expensive than mortgages, and are converted to mortgages as soon as the building is completed. Back to alphabetical list

Contingency
A condition(s) that must be met for the contract to be valid. Common contingencies attached to purchase offers include sale of buyer's existing home and outcome of a home inspection. Back to alphabetical list

Contract for Deed (CD)
An arrangement in which the seller finances all or part of the purchase price and retains the property deed until the contract is fulfilled. Back to alphabetical list

Conventional Mortgage
A loan based on the applicant's credit and collateral (usually the property being purchased). Not insured through the FHA or VA. Back to alphabetical list

Covenant
A written restriction on the use of the property. Homeowners' Associations often enforce covenants governing architecture and maintenance of houses in a subdivision. Back to alphabetical list

Disclosure Statement
A document listing known defects, such as water problems, roof damage, and the like. Required by law in some areas. Back to alphabetical list

Earnest Money
A good faith down payment made when the purchase agreement is signed by both parties. Back to alphabetical list

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