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| Home Insurance Glossary
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Confused in the Home Loan jargon? Our glossary
will help you in understanding the basic loan related terms.
Browse through the glossary or serach for a term through the
menu to resolve any doubts.
Glossary of Home insurance
terms
C
Call option
A provision in the mortgage that gives the mortgagee the right
to call the mortgage due and payable at the end of a specified
period for whatever reason.
Capital
o Money used to create income, either as an investment in
a business or an income property.
o The money or property comprising the wealth owned or used
by a person or business enterprise.
o The accumulated wealth of a person or business.
o 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.
Capital improvement
Any structure or component erected as a permanent improvement
to real property that adds to its value and useful life.
Chain of title
The history of all of the documents that transfer title
to a parcel of real property, starting with the earliest
existing document and ending with the most recent.
Change frequency
The frequency (in months) of payment and/or interest rate
changes in an adjustable-rate mortgage (ARM).
Chattel
Another name for personal property.
Clear title
A title that is free of liens or legal questions as to ownership
of the property.
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.
Collateral
An asset (such as a car or a home) that guarantees the repayment
of a loan. The borrower risks losing the asset if the loan
is not repaid according to the terms of the loan contract.
Collection
The efforts used to bring a delinquent mortgage current
and to file the necessary notices to proceed with foreclosure
when necessary.
Collision Coverage
Collision coverage covers the cost of fixing or replacing
your car after an accident, regardless of who was driving
and who was at fault. The coverage is limited to the actual
cash value of your car minus your deductible.
Co-maker
A person who signs a promissory note along with the borrower.
A co-maker's signature guarantees that the loan will be
repaid, because the borrower and the co-maker are equally
responsible for the repayment.
Comprehensive Coverage
Comprehensive coverage pays for the repair of damages not
caused by collisions, i.e. hail-damage, vandalism, and fire.
It also pays for the replacement of a car in the case of
theft.
Compound interest
Interest paid on the original principal balance and on the
accrued and unpaid interest.
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 sometimes the exclusive use of
certain limited common areas.
Construction loan
A short-term, interim loan for financing the cost of construction.
The lender makes payments to the builder at periodic intervals
as the work progresses.
Contract
An oral or written agreement to do or not to do a certain
thing.
Convertible ARM
An adjustable-rate mortgage (ARM) that can be converted
to a fixed-rate mortgage under specified conditions.
Cooperative (co-op)
A type of multiple ownership in which the residents of a
multiunit housing complex own shares in the cooperative
corporation that owns the property, giving each resident
the right to occupy a specific apartment or unit.
Covenant
A clause in a mortgage that obligates or restricts the borrower
and that, if violated, can result in foreclosure.
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 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.
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