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RD Glossary - construction loan
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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.
- contingency
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A condition that must be met before a contract is legally binding. For example, home purchasers often include a contingency that specifies that the contract is not binding until the purchaser obtains a satisfactory home inspection report from a qualified home inspector.
- contract
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An oral or written agreement to do or not to do a certain thing.
- conventional mortgage
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Refers to home loans other than government loans (VA and FHA).
- convertible ARM
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IAn adjustable-rate mortgage that allows the borrower to change the ARM to a fixed-rate mortgage within a specific time.
- cooperative (co-op)
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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.
- cost of funds index (COFI)
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One of the indexes that is used to determine interest rate changes for certain adjustable-rate mortgages. It represents the weighted-average cost of savings, borrowings, and advances of the financial institutions such as banks and savings & loans, in the 11th District of the Federal Home Loan Bank.
- credit
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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
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A record of an individuals repayment of debt. Credit histories are reviewed my mortgage lenders as one of the underwriting criteria in determining credit risk.
- credit report
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A report of an individuals credit history prepared by a credit bureau and used by a lender in determining a loan applicants creditworthiness.
- credit repository
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An organization that gathers, records, updates, and stores financial and public records information about the payment records of individuals who are being considered for credit.
- creditor
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A person to whom money is owed.
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