Caps (Interest)

Consumer safeguards which limit the amount the interest rate on an adjustable rate mortgage may change per year and/or the life of the loan.

Caps (Payment)

Consumer safeguards which limit the amount monthly payments on an adjustable rate mortgage may change.

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.

Commitment

An agreement, often in writing, between a lender and a borrower to loan money at a future date, subject to the completion of paperwork or compliance with stated conditions.

Construction Loan

A short term interim loan for financing the cost of construction. The lender advances funds to the builder at periodic intervals as the work progresses.

Conventional Loan

A mortgage not insured by FHA or guaranteed by the VA or Farmers Home Administration (FmHA).

Credit Report

A report documenting the credit history and current status of a borrower's credit standing.