call option
A provision in the loan that gives the lender the right to call the loan due and payable at the end of a specified period for whatever reason.

caps
Limits on changes in interest rates or monthly payments for adjustable rate loans, either in an adjustment period or over the life of the loan.

caps (interest)
Limits on the amount the interest rates on an adjustable rate loan can change in an adjustment interval and/or over the life of the loan.

caps (payment)
Limits on the amount monthly payments on an adjustable rate loan may change. Since they do not limit the amount of interest the lender is earning, they may cause negative amortization.

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.

ceiling
The maximum allowable interest rate of an adjustable rate loan.

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

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

certified check
A check drawn on the issuer's account for funds that have been segregated by the bank, guaranteeing payment.

chain of title
The chronological order of conveyance of a vehicle 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 costs
Fees incurred in a loan transaction and paid by borrower and/or seller during the closing of the loan. These typically include a loan origination fee, discount points, attorney's fees, title insurance, survey, and any items which must be prepaid, such as taxes and insurance payments. The cost of closing is usually about 3 percent to 6 percent of the loan amount.

closing statement
Financial disclosure statement that lists the funds received and expected at the closing.

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

collateral
Assets that back a loan.

commission (accurate?)
Money paid to a marine broker by the seller (usually 6 to 7 percent of the sale price of the vehicle).

commissioning
The fees charged by the dealer above the purchase price of a new vehicle. Fees can include installing optional equipment, raising a mast, etc.

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

compound interest
An interest method that calculates interest on interest earned in prior periods.

contingency
A condition that must be satisfied before a contract is legally binding and before a sale can close.

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

conversion clause
A provision in some adjustable rate loans that allows you to change an adjustable rate loan to a fixed-rate loan, usually after the first adjustment period. The new fixed rate will be set at current rates, and there may be a charge for the conversion feature.

conveyance
The transfer of a deed.

cosigner
An individual who signs a loan contract with another borrower. The cosigner assumes equal responsibility for fulfilling the terms of the loan.

credit report
A report detailing the credit history of a prospective borrower, used to help determine creditworthiness.

credit risk
The possibility that the borrower may default on financial obligations to the investor.

customer incentive
A special payment from the manufacturer to the customer to promote sales of slow-selling models. Also called a rebate.