Glossary of commonly used terms and phrases
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Take Out Commitment - An agreement by a lender to place a “long-term,” take out loan on a property after the construction is complete.
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Take-back - A loan made directly from the seller to the buyer.
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Tax - As applied to real estate, an enforced charge imposed on persons, property, or income, to be used to support the State. The governing body in turn utilizes the funds in the best interest of the general public.
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Tax Base - To determine the amount of tax due. The assessed value of the property is multiplied by the tax rate.
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Tax Deduction - A tax deduction allowed by the government and used to reduce taxable income. The government allows certain deductions to be subtracted such as mortgage interest.
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Tax Deed - A deed on a property purchased at public sale for the nonpayment of taxes.
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Tax Lien - A type of lien placed on a title when the owner has not paid property or assessment taxes or other state and federal taxes.
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Teaser Rate - An advertised very low, but very temporary, introductory rate on an Adjustable Rate Mortgage (ARM).
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Tenancy at Will - A type of tenancy where a person has possession by permission of the owner but without an agreement for a fixed term.
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Tenancy by the Entirety - A type of joint tenancy of property that provides right of survivorship and is available only to a husband and wife.
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Tenancy in Common - A type of joint tenancy of property without right of survivorship, each tenants portion of ownership is distributable under will.
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Tenant Improvement Reserves Funds - Funds set aside on a monthly basis to improve the property for current and or future tenants.
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Tenant-Stockholder - The obligee for a cooperative share loan, who is both a stockholder in a cooperative corporation and a tenant of the unit under a proprietary lease or occupancy agreement.
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Term - The period of time which covers the life of the loan. For example, a 30 year fixed loan has a term of 30 years.
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The Office of Thrift Supervision (OTC) - Charters federal thrifts, serves as the primary federal examiner and regulator of federal and state-chartered savings associations, and administers laws governing savings and loan holding companies.
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Third Mortgage - A mortgage that has rights subordinate to the rights of the first and second mortgage holders.
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Third-party Origination - A process by which a lender uses another party to completely or partially originate, process, underwrite, close, fund, or package the mortgages it plans to deliver to the secondary mortgage market.
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Title - As generally used, the rights of ownership and possession of particular property. In real estate usage, title may refer to the instruments or documents by which a right of ownership is established (title documents), or it may refer to the ownership interest one has in the real estate. 1. Evidence of the right of property ownership; can be held solely, jointly, in common, in corporate, or partnership form. 2. The evidence one has of right to possession of land.
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Title Company - A company that performs and insures title searches. Usually selected by the seller, they sometimes work as a lender's agent. Depending on the preferences of the seller, buyer and others involved in the sale, the closing might take place at the title company's offices.
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Title Insurance - Protects lenders or homeowners against loss of their interest in property due to legal defects in title. Title insurance may be issued to a 'mortgagee's title policy.' Insurance benefits will be paid only to the 'named insured' in the title policy, so it is important that an owner purchase an 'owner's title policy', if he desires the protection of title insurance.
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Title Plant - The part of a title company where data is kept and updated on the records of all properties in a certain area and can be readily searched.
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Title Search or Examination - A check of the title records, generally at the local courthouse, to make sure the buyer is purchasing a house from the legal owner and there are no liens, overdue special assessments, or other claims or outstanding restrictive covenants filed in the record, which would adversely affect the marketability or value of title.
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Total Debt Ratio - Monthly debt and housing payments divided by gross monthly income. Also known as Back-End Ratio.
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Total Expense Ratio - Total obligations as a percentage of gross monthly income. The total expense ratio includes monthly housing expenses plus other monthly debts.
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Trade Equity - Equity that results from a property purchaser giving his or her existing property (or an asset other than real estate) as trade as all or part of the down payment for the property that is being purchased.
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Transfer of Ownership - Any means by which the ownership of a property changes hands.
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Transfer Tax - State or local tax payable when title passes from one owner to another.
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Treasury Bill (T-Bill) - A debt security issued by the U.S. government with maturity of one year or less. Treasury bills are exempt from state and local taxes.
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Treasury Index - An index that is used to determine interest rate changes for certain adjustable-rate mortgage (ARM) plans.
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Triple-Net Lease - A lease in which the tenant pays rent as well as taxes, insurance, and maintenance.
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Triplewide - A type of manufactured home that has 3 sections that are pulled to a site on their own wheels and axles, then removed and placed on a permanent foundation. Can be placed in a park or lot without removing wheels and axles, but will be taxed as a moving vehicle.
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Trust Deed - Conveyance of real estate to a third party that is to be held for the benefit of another.
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Trustee - A party who is given legal responsibility to hold property in the best interest of or 'for the benefit of' another. The trustee is one placed in a position of responsibility for another, a responsibility enforceable in a court of law.
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Trustee in Bankruptcy - One appointed by the court and holds the property in trust for the creditors.
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Trustor - A borrower under a deed of trust and is one who deeds their property to a trustee as security for repayment.
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Truth in Lending Act (TIL) - A federal law that requires a truth in lending statement to be disclosed on consumer loans. The statement discolses certain facets of the mortgage program such as the annual percentage rate (APR). The law also includes the right of recession period that follows the closings of refinances.
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Two- to-Four Family Property - A property that consists of a structure that provides living space (dwelling units) for two to four families, although ownership of the structure is evidenced by a single deed.
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Two-Step Mortgage - A type of adjustable rate mortgage (ARM) that has a below-market interest rate for the initial part of the mortgage (usually five or seven years), and then an adjusted interest rate, usually market rate, for the remainder of the mortgage.
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