Glossary of Mortgage Terms

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.

A collateralized mortgage obligation (CMO) is a type of mortgage-backed security that puts home loans into groups called tranches, each with its own level of risk and payment schedule.

A commercial equity line of credit (CELOC) is a type of revolving credit line that lets business owners borrow money against the equity they have built in their commercial property. They only pay interest on the amount they actually use.

A community lending program is a type of mortgage that helps people with low to moderate incomes buy a home by lowering the down payment, making credit requirements more flexible, and giving them money that traditional loans don't always give.

Community Seconds is a Fannie Mae program that lets approved nonprofits, government agencies, and employers give home buyers a second mortgage to help them pay for their closing costs or down payment.

A comparative market analysis (CMA) is a report that looks at similar homes that have recently sold or been listed in the same area to figure out how much a property is worth on the market.

In real estate, condemnation is the legal process by which the government takes private property for public use or says that a building is unsafe. The owner is then entitled to fair payment.

A condo association is made up of all the owners of units in a condo complex. It takes care of shared spaces, collects fees, enforces community rules, and keeps the building's common areas in good shape.

A condominium is a privately owned apartment or house in a larger building or community where owners share common areas, amenities, and maintenance responsibilities. These are managed by a homeowners association.

A construction loan is a short-term loan that pays for the cost of building a new home. The money is given out in stages as the work is done, and then it becomes a permanent mortgage or is replaced by one.