Glossary of Mortgage Terms

A cap rate, which stands for capitalization rate, is a percentage that shows how much money a real estate investment property can make each year compared to what it is worth on the market right now.

Cash-on-cash return is a real estate metric that shows how much money you make each year before taxes from an investment property as a percentage of the total cash you put in.

A cash-out refinance gives you a new, bigger loan instead of your current mortgage and gives you the difference in cash. This allows you take out and use the equity you've built up in your home over time.

A chain of title is a complete record of who has owned a piece of property over time, showing how it has changed hands from the original owner to the current one.

A chattel mortgage is a loan that lets you buy movable personal property, like a manufactured or mobile home. The property itself serves as collateral instead of land or real estate.

Clear to close means that the lender has officially approved the borrower's mortgage application and they can go to their closing appointment.

Closing costs are the fees and charges that a home buyer or person refinancing their mortgage has to pay at settlement to finish the loan. These costs usually range from 2% to 5% of the total loan amount.

A Closing Disclosure is a five-page document that your lender must provide to you at least three business days before closing so you can review the final terms, interest rate, and costs of your mortgage loan.

A housing cooperative, or co-op, is a residential property owned by a corporation. Shareholders of the corporation can live in individual units through a proprietary lease.

Collateral is an asset you pledge to a lender as a guarantee for a loan, and for most mortgages, the home you're buying is that asset.