Glossary (T-U)

Terms commonly used in the real estate and mortgage marketplace.

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 Z

Taxes and Insurance

Funds collected as part of the borrower’s monthly payment and held in escrow for the payment of the borrower’s, or funds paid by the borrower for, state and local property taxes and insurance premiums.

Termite Inspection

An inspection to determine whether a property has termite infestation or termite damage. In many parts of the country, a home must be inspected for termites before it can be sold.

Third-Party Origination

A process by which a lender uses another party to completely or partially originate, process, underwrite, close, fund, or package a mortgage loan. See also “Mortgage Broker.”

Title

The right to, and the ownership of, property. A title or deed is sometimes used as proof of ownership of land.

Title Insurance

Insurance that protects lenders and homeowners against legal problems with the title.

Title Search

A check of the public records to ensure that the seller is the legal owner of the property and to identify any liens or claims against the property.

Trade Equity

Real estate or assets given to the seller as part of the down payment for the property.

Transfer Tax

State or local tax payable when title to property passes from one owner to another.

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 by the U.S. Treasury of Treasury bills and securities.

Truth-In-Lending Act (TILA)

A federal law that requires disclosure of a truth-in-lending statement for consumer credit. The statement includes a summary of the total cost of credit, including the Annual Percentage Rate (APR), the total amount financed (amount of credit), the total finance charge (interest and other charges), the total of all payments (amount financed + finance charge); a breakdown of the monthly payment; and specification of late charges, prepayment penalties, insurance requirements, and assumability.

Two- to Four- Family Property:

A residential property that provides living space (dwelling units) for two to four families, although ownership of the structure is evidenced by a single deed; a loan secured by such a property is considered to be a single-family mortgage.


Underwriting

The process used to determine loan approval. It involves evaluating the property and the borrower’s credit and ability to pay the mortgage.

Uniform Residential Loan Application

A standard mortgage application you will have to complete. The form requests your income, assets, liabilities, and a description of the property you plan to buy, among other things.

Unsecured Loan

A loan that is not backed by collateral.