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Financial Glossary


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CapUpper limit that an interest rate cannot exceed.
CapitalWealth such as money or property, often invested to generate additional wealth.
CarportShelter over a vehicle parking area, which is not fully enclosed.
Cashier's checkNegotiable instrument issued by a financial institution from its funds, payable to a third party.
Cash-out refinanceNew mortgage is higher than the remaining loan balance, resulting in extra funds from equity.
ClaimRequest for payment related to an insured loss.
Clear titleOwnership document that is free of liens and defects.
ClosingMeeting to finalize the sale, sign the mortgage, pay closing costs and transfer the title.
Closing costsExpenses at the end of a sale (e.g., origination fees, discount points, prepaid taxes/insurance).
Closing statementDocument outlining what each party pays and detailing ownership transfer (HUD-1 statement).
CollateralProperty promised to ensure repayment of a debt.
Common areaArea in a housing development owned by all residents instead of an individual (e.g., park).
Compounding methodDividends paid on principal savings and previously earned dividends.
CondominiumIndividually-owned dwelling unit within a complex, with shared ownership of common areas.
ContingencyCondition that must be met before a contract is binding.
ContractLegal agreement between parties.
ContributionMoney put into an individual retirement or designated savings account.
Conventional mortgageHome loan that is not guaranteed or insured by the federal government.
Convertible ARMAdjustable-rate home loan that can be converted to fixed-rate based on certain conditions.
Co-signerSomeone who accepts joint responsibility for repayment of another person's debt.
Covenants, conditions and restrictions (CC&Rs)Rules for a housing development, such as landscaping guidelines (often used by an HOA).
CreditCreation of debt, amount available to borrow or a party's history of timely repayment.
Credit bureauCompany that tracks credit data and history (e.g., Equifax, Experian and Trans Union).
Credit historyRecord of debt and repayment.
Credit rating (credit score)Assessment of ability to manage debt, including factors like income and credit history.
Credit unionA not-for-profit financial cooperative, owned by its members for their mutual benefit.
Equal Housing Lender Your savings federally insured to at least $250,000 and backed by the full faith and credit of the United States Government. National Credit Union Administration, a U.S.Government Agency. ©2014 Desert Schools Federal Credit Union