Glossary 

Rural Housing Service (RHS). Contrast

agreed." Your credit history is called a

with "Government Mortgage."

credit report when provided by a credit

bureau to a lender or other business.

Conversion Option: A provision of some

Credit Life Insurance: A type of insur-

adjustable-rate mortgage (ARM) loans

that allows the borrower to change the

ance that pays off a specific amount of

ARM to a fixed-rate mortgage at speci-

debt or a specified credit account if the

fied times after loan origination.

borrower dies while the policy is in force.

Convertible ARM: An adjustable-rate

Credit Report: Information provided by

mortgage (ARM) that allows the borrower

a credit bureau that allows a lender or

to convert the loan to a fixed-rate mort-

other business to examine your use of

gage under specified conditions.

credit. It provides information on money

that you've borrowed from credit institu-

Cooperative (Co-op) Project: A project

tions and your payment history.

in which a corporation holds title to a

Credit Score: A numerical value that

residential property and sells shares to

individual buyers, who then receive a

ranks a borrower's credit risk at a given

proprietary lease as their title.

point in time based on a statistical eval-

uation of information in the individual's

Cost of Funds Index (COFI): An in-

credit history that has been proven to be

dex that is used to determine interest

predictive of loan performance.

rate changes for certain adjustable-rate

Creditor: A person who extends credit

mortgage (ARM) loans. It is based on the

weighted monthly average cost of de-

to whom you owe money.

posits, advances, and other borrowings

Creditworthy: Your ability to qualify for

of members of the Federal Home Loan

Bank of San Francisco.

credit and repay debts.

Counter-offer: An offer made in re-

D

sponse to a previous offer. For example,

after the buyer presents their first offer,

the seller may make a counter-offer with

Debt: Money owed from one person or

a slightly higher sale price.

institution to another person or institu-

tion.

Credit: The ability of a person to bor-

row money, or buy goods by paying

Debt-to-Income Ratio: The percent-

over time. Credit is extended based on a

age of gross monthly income that goes

lender's opinion of the person's financial

toward paying for your monthly hous-

situation and reliability, among other

ing expense, alimony, child support, car

factors.

payments and other installment debts,

and payments on revolving or open-end-

Credit Bureau: A company that gath-

ed accounts, such as credit cards.

ers information on consumers who use

credit. These companies sell that infor-

Deed: The legal document transferring

mation to lenders and other businesses

ownership or title to a property

in the form of a credit report.

Deed-in-Lieu of Foreclosure: The

Credit History: Information in the files

transfer of title from a borrower to the

of a credit bureau, primarily comprised

lender to satisfy the mortgage debt and

of a list of individual consumer debts

avoid foreclosure. Also called a "volun-

and a record of whether or not these

tary conveyance."

debts were paid back on time or "as