An agreement by a lender to place a “long-term,” take out loan on a property after the construction is complete.
Take-back
A loan made directly from the seller to the buyer.
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.
Tax Base
To determine the amount of tax due. The assessed value of the property is multiplied by the tax rate.
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.
Tax Deed
A deed on a property purchased at public sale for the nonpayment of taxes.
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.
Teaser Rate
An advertised very low, but very temporary, introductory rate on an Adjustable Rate Mortgage (ARM).
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.
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.
Tenancy in Common
A type of joint tenancy of property without right of survivorship, each tenants portion of ownership is distributable under will.
Tenant Improvement Reserves Funds
Funds set aside on a monthly basis to improve the property for current and or future tenants.
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.
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.
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.
Third Mortgage
A mortgage that has rights subordinate to the rights of the first and second mortgage holders.
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.
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.
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.
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.
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.
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.
Total Debt Ratio
Monthly debt and housing payments divided by gross monthly income. Also known as Back-End Ratio.
Total Expense Ratio
Total obligations as a percentage of gross monthly income. The total expense ratio includes monthly housing expenses plus other monthly debts.
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.
Transfer of Ownership
Any means by which the ownership of a property changes hands.
Transfer Tax
State or local tax payable when title passes from one owner to another.
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.
Treasury Index
An index that is used to determine interest rate changes for certain adjustable-rate mortgage (ARM) plans.
Triple-Net Lease
A lease in which the tenant pays rent as well as taxes, insurance, and maintenance.
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.
Trust Deed
Conveyance of real estate to a third party that is to be held for the benefit of another.
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.
Trustee in Bankruptcy
One appointed by the court and holds the property in trust for the creditors.
Trustor
A borrower under a deed of trust and is one who deeds their property to a trustee as security for repayment.
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.
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.
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.
T-bills that are short-term securities with maturities up to one year. Issued by the government at a discount from face value.
U.S. Treasury Bond
Long-term securities with maturities greater than 10 years.
U.S. Treasury Note
Intermediate term securities issued with 2,3,5, and 10 year maturities.
Unavoidable Cause
An unpreventable happening such as death, illness, papers lost, etc. that happens even with reasonable care and prudence.
Underlying Financing
A prior mortgage or deed of trust on a land contract, mortgage, etc. on the same property.
Underwriting
The process of evaluating a loan application to determine the risk involved for the lender. Underwriting involves an analysis of the borrower's credit worthiness and the quality of the property itself.
Undisclosed Principal
One whose identity, in a certain transaction, is not revealed by an agent.
Unencumbered Property
A property that is free and clear of debts or liens, such as a house without a mortgage.
Uniform Residential Loan Application (1003)
A standardized loan application used for loan applications by all lenders.
Uniform Settlement Statement
Standard HUD Form 1 that is required to be given to the borrower, lender, and seller at or prior to settlement.
Unilateral Contract
When one party makes a promise, and the other party, who made no reciprocal promise, may still be obligated by law or be given consideration.
Unity of Possession
The joint tenants, in a joint tenancy situation, have equal rights to possession.
Unmarketable Title
Any title that contains defects that would allow a person to be released from the obligation of the purchase.
Unrecorded Instrument
A deed, mortgage, etc., which is not recorded in the county recorder’s office and would therefore not be protected under the statutes regarding recording.
Unsecured-loan
A loan that is not backed by collateral.
Useful Life
An appraisal that was done for a property that is for sale must state the true economic value of the structure in terms of years of use to the owner. For purposes of taxation, the life set for depreciation.
Usury
An illegally high interest rate charged on a loan.
To abandon or surrender a right, benefit, or claim.
Walk-through
The final tour of a home prior to the sale closing, in which any defects are noted.
Warehouse Fee
A lender's fee for temporarily holding a borrower's loan before it is sold on the secondary market.
Warranty
A protection plan generally paid for by the seller that protects the buyer against major repair expenses and breakdowns. Warranties are assigned to specific items, usually major appliances or systems on the property.
Warranty Deed
A type of deed that conveys fee title to real property.
Wholesale Lender
A Lender who works only with mortgage brokers and takes completed loan packages and underwrites them. They offer mortgage brokers discounted pricing in return for the up-front work done by the mortgage broker.
Wholesale Lenders
Lenders who work only with mortgage brokers and takes completed loan packages and underwrites them. They offer mortgage brokers discounted pricing in return for the up-front work done by the mortgage broker.
Wild Interest
Recorded interest that cannot be traced in the chain of title. This can occur when an incorrect legal description appears on a document. Also may occur when a woman who changes her name through marriage after acquiring property, and sells the property using her married name only.
Workout
An attempt to resolve a problematic situation, such as a bad loan.
Wraparound Mortgage
A mortgage that includes the remaining balance on an existing first mortgage plus an additional amount requested by the mortgagor. Full payments on both mortgages are made to the wraparound mortgagee, who then forwards the payments on the first mortgage to the first mortgagee.
Writ of Sequestration
Taking custody of one’s property, real or personal, to force compliance with a court order.
The ratio of investment income to the total amount invested over a certian period of time.
Yield Maintenance
A prepayment premium that allows investors to obtain the same yield as if the borrower made all scheduled mortgage payments until maturity.
Yield to Average Life
Yield calculation used, instead of “Yield to Maturity” or “Yield to Call,” where books are retired systematically during the life of the issue, as in the case of a Sinking Fund, with contractual requirements.
Yield to Maturity (YTM)
A calculation used to determine the rate of return an investor will receive on a bond if it is held to its maturity date. YTM is considered a long-term bond yield expressed as an annual rate. It takes into account purchase price, redemption value, time to maturity, coupon interest rate, and time between interest payments.
Zero Lot Line
The construction of a building on any of the boundary lines of a lot.
Zoning
The classification of allowable land use by a government.
