Glossary

to effect the closing of a mortgage loan,

tenance. Common areas include swim-

generally including, but not limited to

ming pools, tennis courts, and other

a loan origination fee, title examination

recreational facilities, as well as common

and insurance, survey, attorney's fee,

corridors of buildings, parking areas,

and prepaid items, such as escrow de-

means of ingress and egress, etc.

posits for taxes and insurance.

Comparables: An abbreviation for "com-

Closing Date: The date on which the

parable properties," which are used as a

sale of a property is to be finalized and a

comparison in determining the current

loan transaction completed. Often, a real

value of a property that is being ap-

estate sales professional coordinates the

praised.

setting of this date with the buyer, the

Concession: Something given up or

seller, the closing agent, and the lender.

agreed to in negotiating the sale of a

Closing Statement: See "HUD-1 Settle-

house. For example, the sellers may

ment Statement."

agree to help pay for closing costs.

Co-borrower: Any borrower other than

Condominium: A unit in a multiunit

the first borrower whose name appears

building. The owner of a condominium

on the application and mortgage note,

unit owns the unit itself and has the

even when that person owns the prop-

right, along with other owners, to use

erty jointly with the first borrower and

the common areas but does not own the

shares liability for the note.

common elements such as the exterior

walls, floors and ceilings or the struc-

Collateral: An asset that is pledged as

tural systems outside of the unit; these

security for a loan. The borrower risks

are owned by the condominium associa-

losing the asset if the loan is not repaid

tion. There are usually condominium as-

according to the terms of the loan agree-

sociation fees for building maintenance,

ment. In the case of a mortgage, the

property upkeep, taxes and insurance

collateral would be the house and real

on the common areas and reserves for

property.

improvements.

Commission: The fee charged for ser-

Construction Loan: A loan for financ-

vices performed, usually based on a

ing the cost of construction or improve-

percentage of the price of the items sold

ments to a property; the lender disburs-

(such as the fee a real estate agent earns

es payments to the builder at periodic

on the sale of a house).

intervals during construction.

Commitment Letter: A binding of-

Contingency: A condition that must be

fer from your lender that includes the

met before a contract is legally binding.

amount of the mortgage, the interest

For example, home purchasers often

rate, and repayment terms.

include a home inspection contingency;

the sales contract is not binding unless

Common Areas: Those portions of a

and until the purchaser has the home

building, land, or improvements and

inspected.

amenities owned by a planned unit

Conventional Mortgage: A mortgage

development (PUD) or condominium

project's homeowners' association (or

loan that is not insured or guaranteed

a cooperative project's cooperative cor-

by the federal government or one of its

poration) that are used by all of the

agencies, such as the Federal Housing

unit owners, who share in the common

Administration (FHA), the U.S. Depart-

expenses of their operation and main-

ment of Veterans Affairs (VA), or the