Mortgage Marvel Glossary: Terms that Begin with T

Takeout Financing

Permanent long-term financing that typically replaces construction financing after a construction project is completed.

Tangible Property

Real estate and other property of value which can be seen and touched.

Tax

The total value of property, income, or other taxable assets subject to taxation.

Tax Base

The total value of property, income, or other taxable assets subject to taxation.

Tax Certificate

A tax charged by some state or local governments at the time of transfer of real estate title from one owner to another.

Tax Service Fee

A fee sometimes charged to a borrower by a lender to cover the cost of hiring a company to assume responsibility for verifying the amount of real estate taxes due and that taxes have been paid over the life of the loan.

Teaser Rate

A low, shorter term interest rate offered on a mortgage to entice the borrower. Teaser rates are often used for the initial interest rate on adjustable rate mortgages.

Tenancy By The Entirety

Type of joint tenancy that provides the right of survivorship and is available only to a husband and wife. Compare with tenancy in common.

Tenancy In Common

Type of joint tenancy without the right of survivorship. Compare with tenancy by the entirety and with joint tenancy.

Title

A legal written instrument evidencing a person's lawful possession of a property.

Title Company

A company that specializes in examining titles to real estate and issuing title insurance

Title Examination

A fee charged by a title company or attorney in some states to cover the cost of searching the public record to make sure the buyer is purchasing a house from the legal owner and there are no liens, overdue assessments, or other claims filed that would adversely affect the transfer of the title. This fee may be included in the title insurance fee by some lenders.

Title Insurance

An insurance policy that protects the lender (and sometimes the property owner as well) against loss due to disputes over the ownership of a property and defects in the title that were not found in the search of the public record.

Title Opinion

A statement issued by an attorney as to the quality of title after examining an abstract of title. Also, referred to as an Attorney Opinion.

Title Search

An examination of the public title records to determine the legal ownership of a property, and to ensure that there are no liens, encumbrances or other claims outstanding.

Total Debt Ratio

A standard calculation performed by mortgage lenders to determine if a borrower qualifies for a specific loan type. It is calculated by dividing the monthly housing expense (Principal, Interest, Taxes and Insurance plus all other monthly debt obligation) by the borrower's monthly gross income. Also referred to as a back end ratio or a bottom ratio.

Trade Equity

Equity that results from a buyer giving an existing property as trade for all or part of the down payment on the subject property.

Transfer Of Ownership

Any legal method by which the ownership of property changes hands.

Transfer Tax

A tax charged by some state or local governments at the time of transfer of real estate title from one owner to another.

Treasury Bills

A short-term U.S. Government security with a maturity of less than 1 year. Treasury bills are commonly used as an index to establish interest rates for adjustable rate mortgages. They are based on the interest rate paid to private investors by the US Government to obtain funding for the national debt and other expenses. Sometimes called T-bills, they are available in denominations of 3-months, 6-months and 1-year. The 3-month and 6-month Treasury bills are auctioned every Monday, and the 1-year Treasury bills are auctioned on Tuesday. The resulting figures are released to the public the next day. This index can have either a weekly or a monthly value.

Treasury Index

An index that is used to determine interest rate changes for some adjustable rate mortgage (ARM) programs. It is often based on the U.S. Treasury's daily yield curve.

Treasury Note

An intermediate U.S. Government security with a maturity of 1 to 10 years. Denominations range from $1,000 to $1 million or more. The notes are sold by cash subscription in exchange for outstanding or maturing government issues, or at auction.

Treasury Securities

An index used to establish interest rates for adjustable rate mortgages. It is based on the yields of actively traded 1-year, 3-year, or 5-year Treasury Securities adjusted to constant maturities. The Treasury Security indices are calculated by the U.S. Treasury and reported by the Federal Reserve Board. These indices have either a weekly or a monthly value. The weekly indices are released on Monday afternoon for the previous week. Monthly values for these indices are generally available on the first Monday of the following month.

Trustee

A fiduciary who holds property in trust for another to secure performance of an obligation or act.

Truth In Lending Act

Also known as Regulation Z, this federal regulation requires a lender to provide borrowers with a disclosure estimating the costs of the loan including your total finance charge and the Annual Percentage Rate (APR) within three business days of the application for a loan. This act is designed to provide consumers with a standard method of comparing the financing costs from lender to lender.

Truth In Lending Statement

A disclosure, required by RESPA that must be provided to most borrowers to estimate the costs of the loan including the total finance charge and the Annual Percentage Rate (APR). The statement is designed to provide consumers with a standard method for comparing financing costs from lender to lender.

Two-Step Mortgage

A type of adjustable rate mortgage (ARM) that has one interest rate for the first few years (typically 5 or 7), and a different rate for the remainder of the amortization term.

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Mortgage Glossary - T

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