Tax Service Fee - A fee charged to a borrower by a lender so that another
company will assume responsibility for verifying the amount of real estate taxes due
and that taxes have been paid over the life of the loan. A tax service fee is
considered to be a third party fee; however, some lenders may not charge for
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.
Term - The loan term is the number of months that you will make monthly
payments. If the loan term is the same as the payment calculation term, you will
pay the loan in full during the loan term and no balance will be due. If the
payment calculation term is greater than the loan term, a balance or "balloon
payment" may be due at the end of the loan term.
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. A title examination fee is considered
to be a third party fee and may be included in the title insurance fee by some
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. The title insurance
cost is considered to be a third party fee.
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. A title opinion fee is considered to be
a third party fee and may be included in the title insurance fee by some lenders.
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 Closing Costs - This is the total of all the items that must be
paid at closing related to your new mortgage. Since the exact charges for some
of these items cannot be obtained until the time of closing, the figure may only
be an estimate.
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
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. These fees are
considered to be a tax or other unavoidable fee. May also be referred to as an
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.