ap: The maximum which an adjustable-rate mortgage may increase, regardless of index changes. An interest rate cap limits the amount the interest can change, while a payment cap limits the increase in monthly payment to a specific dollar amount.
Cap Rate: A net yield set by an investor to determine the value of an income producing property.
Capital Expenditures: Line items on a profit and loss statement that would not be expensed on an annual basis. This category would include replacement of major building systems, such as roofs, driveways, etc.
Capitalization Rate: A method used to estimate the value of a property based on the rate of return on investment.
Closing: The meeting between the buyer, seller and lender (or their agents) where the property and funds legally change hands. Also referred to as "settlement".
Closing Costs: The cost and fees associated with the official change in ownership of the property and with obtaining the mortgage, that are assessed at the closing or settlement.
Commercial Conduit: Direct link to an institutional lending source.
Comparative Market Analysis: An estimate of the value of a property based on an analysis of sales of properties with similar characteristics.
Conduit: The financial intermediary that sponsors the conduit between the lender(s) originating loans and he ultimate investor. The conduit makes or purchases loans from third party correspondents under standardized terms, underwriting and documents and then, when sufficient volume has been obtained, pools the loans for sale to investors in the CBMS markets.
Convertible: An option available on some adjustable rate mortgages (ARM's) that allows the loan to be converted to fixed rate mortgage. Conversion usually involves paying a one-time fee and conversion may be limited to within a certain time - frame.
Cosigner: Someone who is willing to sign mortgage loan obligation with you in case you default on your monthly payments. Normally, the cosigner is required to go through the same application and approval process as the original signer of the loan.
Credit Company: A lending organization that obtains it source of funds from the commercial market.
Credit Enhancements: A loan to provide improvements to the property.
Credit Report: A search through your existing credit history by a qualified credit bureau to determine if, and the number of times, you may have been delinquent making monthly payments on previous debts. Even when a credit report is for the most part positive, many lenders require written explanation for any negative comments within the credit report. This type of report is usually required to obtain a mortgage loan.
Debt Service Coverage Ratio (DSC): A 1.0 means breakeven. The ratio is calculated by taking the net operating income and dividing it by the mortgage payments. Most lenders look for a ratio of 1.25 or higher.
Debt Service: The periodic payments (principal and interest) made on a loan.
| 
Equal Opportunity Lender