Mortgage Glossary
# A B C D E F G H I J K L M N O P Q R S T U V W X Y ZT
The actual transfer of money from a lender to a borrower under a loan agreement, loan commitment, or line of credit.
Takeout Commitment
A promise by a lender to provide a long-term mortgage loan upon satisfactory completion of construction.
Tax Lien
A government claim against real property for unpaid taxes.
Tax Participation Clause
A provision in a lease stipulating that the tenant will pay all or part of the real estate taxes on the leased property. Also called a tax stop clause
Teaser Rate
An initial, below-market interest rate offered on loans. After the initial time period, the permanent rate takes effect.
Tenancy
The holding of property (including real estate and deposit accounts) either by ownership or by lease.
Tenancy in Common
Unlike joint tenancy, tenancy in common does not pass ownership to other individuals on a title's property in case of death.
Term Loan
A loan with a maturity of usually three to five years, during which time interest is paid, but no payments to reduce principal are made. The entire principal is due and payable at the end of the loan term.
Term Mortgage
A mortgage loan with a fixed time period, usually five years or less, during which only interest is paid. At the end of the term, the entire principal is due and payable.
Third-party Origination
A process whereby a lender uses a third party to originate, underwrite, or process mortgages, which he or she then puts on the secondary mortgage market.
Thrift Institution
A financial institution designed to encourage savings and home buying.
Title
(a) The ownership right to property, including the right of possession. (b) The document or instrument constituting evidence of such an ownership right.
Title 1
An FHA-insured loan that allows a borrower to make non-luxury improvements (like renovations or repairs) to their home; Title I loans less than $7,500 don't require a property lien.
Title Binder
Written evidence of temporary title insurance coverage in force for a limited period of time, which is to be replaced by a permanent policy.
Title Company
A business that examines real property titles, reports its findings as to the legal status of such titles, and issues insurance policies to indemnify the owner and lender against financial loss resulting from unknown title defects or prior claims against the property.
Title Defect
Any fact, circumstance or lawful right that could successfully claim all or part of a property or could challenge the ownership of the property.
Title Insurance
Protects the lender against any claims that arise from arguments about ownership of the property; also available for homebuyers.
Title Report
A written statement by a title guarantee company that sets forth the condition of title to a specified piece of real estate as of a certain date.
Title Search
A check of public records to be sure that the seller is the recognized owner of the real estate and that there are no unsettled liens or other claims against the property.
Torrens System
A method of registration of title to land with the appropriate public office, by which an official certificate at the office always shows the condition of the title and the person in whom it is vested.
Transaction
(a) Any agreement between two or more parties that establishes a legal obligation. (b) The act of carrying out such an obligation. (c) All activities that effect a deposit account that are performed at the request of the account holder. (d) All events that cause some change in the assets, liabilities or net worth of a business.
Transfer Agent
A party appointed to maintain records of secunties owners, to cancel and issue certificates, and to address issues arising from lost, destroyed or stolen certificates.
Transfer of Ownership
The process through which property goes from one owner to another. This could include assumption of a mortgage debt by the property's purchaser, or any exchange of property possession under a land sales contract, for example.
Transfer Tax
State or local taxes applied to title that is changing ownership.
Treasury Index
Based on U.S. Treasury auctions (for its bills or securities), the Treasury Index determines rate changes for some adjustable rate mortgages.
Trust
A legal entity created to manage property for the benefit of a specific person or persons. A trust is funded when the owner (the grantor) transfers ownership of property to another (the trustee) for the immediate or eventual benefit of a third person, (the beneficiary). The person who creates a trust is called a grantor, settlor or trustor. The person designated to receive assets at the end of the trust term is called a remainderman.
Trust Account
(a) A savings account, established under a trust agreement, containing funds administered by a trustee for the benefit of another person or persons. (b) An escrow account.
Trust Agreement
A written agreement under which a grantor transfers legal ownership of property to another person or organization charged with administering the property for the benefit of a third person or persons. See deed of trust.
Trustee
Someone who controls or holds someone else's property.
Trustor (Settlor)
An individual who establishes a trust by giving property to a trustee for the benefit of another.
Truth-In-Lending
A federal law obligating a lender to give fuII written disclosure of aII fees, terms, and conditions associated with the loan initial period, and then adjusts to another rate that lasts for the term of the loan.
Two-Step Mortgage
An adjustable rate mortgage with one interest rate for its first five or seven years, and with another interest rate for the rest of its amortization term.
Two-to-Four-Family Property
A single-deeded property, but with units for two to four families.
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