Taxable income: The amount of net income (gross income minus all adjustments,
deductions, and exemptions) that is used to calculate income tax owed.
Tax deferred: A term that indicates no tax is currently due on the transaction
or income received. Instead, tax is due at a later date when the transaction is
Tax-deferred exchange: See Like-Kind Exchange.
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. Contrast with
tenancy in common.
Tenancy in common: A legal method of owning real or personal property by
two or more persons in which each person’s interest passes to their heirs or estate
upon death instead of to the other co-owners. Contrast with Joint Tenancy.
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. 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.
See Mortgage broker.
1031 exchange: See Like-Kind Exchange.
Title: A legal document evidencing a person's right to or ownership of a
Title company: A company that specializes in examining and insuring titles
to real estate.
Title insurance: Insurance that protects the lender (lender's policy) or
the buyer (owner's policy) against loss arising from disputes over ownership of
Title search: A check of the title records to ensure that the seller is the
legal owner of the property and that there are no liens or other claims outstanding.
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. Lenders consider all of the following situations to be a transfer of ownership:
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. In cases in
which an inter vivos revocable trust is the borrower, lenders also consider any
transfer of a beneficial interest in the trust to be a transfer of ownership.
Transfer tax: State or local tax payable when title passes from one owner
Treasury index: An index that is used to determine interest rate changes
for certain adjustable-rate mortgage (ARM) plans. It is based on the results of
auctions that the U.S. Treasury holds for its Treasury bills and securities or is
derived from the U.S. Treasury's daily yield curve, which is based on the closing
market bid yields on actively traded Treasury securities in the over-the-counter
market. See adjustable-rate mortgage (ARM).
Trust: A relationship whereby one party (the trustmaker, trustor, grantor
or settlor) transfers legal title to property to another party (the trustee) to
be held for the benefit of someone else (the beneficiary). There are many kinds
of trust with different terms and requirements and the document establishing the
trust is a form of trust agreement.
Trustee: A fiduciary who holds or controls property for the benefit of another.
Truth-in-Lending: A federal law that requires lenders to fully disclose,
in writing, the terms and conditions of a mortgage, including the annual percentage
rate (APR) and other charges.
Two-step mortgage: An adjustable-rate mortgage (ARM) that has one interest
rate for the first five or seven years of its mortgage term and a different interest
rate for the remainder of the amortization term.
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.