Arbor Financial Group Marketing Engines, Inc.

Glossary of Terms

Mortgage. Real Estate & Insurance

T

Tax Abatement
A Tax Abatement is the reduction in the amount of real estate tax due over a period of time.
Tax Deed
Deed on property purchased at public sale for nonpayment of taxes.
TAX LIEN
A lien for outstanding or delinquent property, IRS or state taxes. Tax liens for delinquent property taxes are the most common and attach only to the property upon which the taxes are unpaid. Property tax liens always take priority over other liens.
TEMPORARY DISABILITY AWARD LETTER
A letter issued to employees who are awarded temporary disability benefits because they are unable to work due to medical disability. These employees are expected to return to work once their disability heals.
TEMPORARY WORKER
An individual who registers with a temporary employment agency to be placed on work assignments at companies on a temporary basis.
Tenancy
Holding of real estate under any kind of right of title. Used alone, tenancy implies a hold under a lease.
Tenancy By Entirety
Joint ownership of property by a husband and wife, where both are viewed as one person under common law that provides for the right of survivorship.
Tenancy in Common
In law, type of ownership created when real or personal property is granted to two or more persons, without express words creating a joint tenancy. There is no right of survivorship.
Tenant
One who is not the owner but occupies real property under consent of the owner and in subordination to the owner's title. The tenant is entitled to exclusive possession, use, and enjoyment of the property, usually for a rent specified in the lease.
Testate
Estate or condition of leaving a will at death.
Time is of the Essence
Inclusion of this phrase in a contract means that performance within a specified period of time is an essential element of the transaction.
Time Sharing
Exclusive right to occupy a unit in a development during a specified time period.
Title
Evidence of the right to or ownership in property. In the case of real estate, documentary evidence of ownership is the title deed that specifies in whom the legal estate is vested and the history of ownership and transfers. Title may be acquired through purchase, inheritance, devise, gift, or through foreclosure of a mortgage.
Title Defect
Any legal right held by others to claim property or to make demands upon an owner.
TITLE CLOSING
The process in which the title company oversees the closing or document signing of the loan in close conjunction with the entity performing the escrow function on the loan. Once the loan documents are signed and all contingencies are satisfied, the title company records the security instrument and releases the proceeds of the loan.
TITLE COMMITMENT
A written report showing all current claims against a property before a sale or loan transaction. After completion of the transaction, a title insurance policy is issued. Same as PRELIMINARY TITLE REPORT.
Title Endorsement
These constitute an enhancement to a standard title policy. Title endorsements are intended to eliminate risk associated with un-plotted easements, foundation placement on the lot, and address and other items listed on the property title that the Lender would not want to have priority over the construction/permanent loan.
TITLE IN LIEU OF
See Deed-In-Lieu.
TITLE INSTRUCTIONS
A document that instructs a title company how to record a lien against a property and issue a title insurance policy. Same as INSTRUCTIONS TO TITLE.
Title Inspection Endorsement Fees
Fee that covers the cost of what the construction industry considers a "title date down" at completion of each inspection and prior to disbursement of construction funds on an OTC loan.
Title Insurance
Title Insurance is an insurance polity which indemnifies the holder for any loss sustained by reason of defects in the title. Insurance against defects in title not listed in the title report or abstract.
Title Insurance Policy
Contract by which the insurer, usually a title insurance company, agrees to pay the insured a specific amount for any loss caused by defects of title to real estate, wherein the insured has an interest as purchaser, mortgagee, or otherwise.
TITLE SEARCH
A Title Search is an examination of the public records to determine the ownership and encumbrances affecting real property. A review of all recorded documents affecting a specific piece of property to determine the present condition of claims against the property.
Total Fixed Payment Ratio
Total mortgage payments plus total recurring charges divided by the effective gross income.
TOTAL MONTHLY INCOME
Gross monthly income from all income sources, after appropriate deductions are taken.
Total Mortgage Payment
Sum of principal, interest real estate taxes, hazard insurance (PITI), (including UFMIP, if financed) and the monthly or annual MIP and, if applicable, homeowner association or condominium fee.
Townhouse
Residential unit on a small lot which has coincidental exterior limits with other similar units. Title to the unit and its lot is vested in the individual buyer with a fractional interest in common areas, if any.
Townhouses and Brownstones
These are single-family houses that in many cases have been converted into multi-unit apartment buildings. Most townhouses and brownstones were built in the late 19th or early 20th centuries and offer gardens, fireplaces, beautiful floors, and ornamental interior details.

Facts about Condominiums & Townhouses:

  • The purchaser receives a deed to the premises that is recorded in the office of the county clerk.
  • Owners are responsible for real estate taxes.
  • Financing is readily available.
  • Owners need to maintain insurance coverage on the dwelling.
  • The title may be held in the name of a corporation or trust.
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.
TRADE-LINES
Credit items reported on a credit report.
Transfer of Ownership
Any means by which the ownership of a property changes hands, including the purchase of a property "subject to" the mortgage, the assumption of the mortgage debt by the property purchaser, and any exchange of possession of the property under a land sales contract or any other land trust device.
Treasury Index
Index that is used to determine interest rate changes for certain ARM plans. It is based on the results of auctions that the U.S. Treasury holds for its treasury bills and securities.
Trust
Fiduciary relationship whereby legal title to a property is transferred to a trustee, who administers the property for the benefit of another (beneficiary) who holds equitable title to such property.
Trust Deed
Instrument given by a borrower (trustor) to a trustee vesting title to a property in the trustee as security for the borrower's fulfillment of an obligation.
Trustee
One who holds legal title to property for the benefit of another, or for the purpose of securing performance of an obligation.
TRUTH-IN-LENDING DISCLOSURE
This disclosure is required by law under the Federal Truth in Lending Act, which requires a full disclosure of a loan amount, finance charges and APR.
Truth-in-Lending Law
Federal law that is part of the Consumer Credit Protection Act, which requires lenders to fully disclose credit terms and conditions, the annual percentage rate, and other charges, in writing. It is intended to assure borrowers are given meaningful information with respect to the cost of credit to help them make better comparisons between competing financial institutions.
Twenty-Five/Seventy-Five (25/75) Percent Rule
GNMA's requirement that the veteran's amount of entitlement must equal at least 25% of the Purchase Price or CRV (whichever is less), plus cash investment.
Two (2) to Four (4)-Family Property
Property that consists of a structure that provides living space (dwelling units) for two(2) to four (4) families, although ownership of the structure is evidenced by a single deed.
TYPES OF SECURITY INSTRUMENTS
In a real estate-secured transaction, the borrower and lender enter into a loan agreement that is legally documented or evidenced by a security instrument. This security instrument can be either a mortgage or a deed of trust. See MORTGAGE and DEED OF TRUST.