Tangible net benefit
The net gain to a borrower from a refinancing where the benefit outweighs the cost.
Tax service fee
A fee assessed by some lenders at closing to cover the cost of property taxes on the borrower’s property when they become due, or if the borrower is paying the taxes, verification that the payment has been made.
Teaser rate
The initial interest rate on an ARM, if it is below the fully indexed rate.
Temporary buydown
A reduction in the mortgage payment in the early years of a loan in exchange for an upfront cash payment provided by the home buyer, the seller, or both.
Temporary lender
A lender that originates the loans and then sells them, as distinguished from a portfolio lender who holds them.
Tenure annuity
Under a Home Equity Conversion Mortgage, an option to draw a fixed amount monthly available to borrowers for as long as they remain in their house.
Term
The period that is used to calculate the monthly mortgage payment usually but not always the same as the maturity. As an example, with a 7-year balloon loan, the maturity is 7 years but in most cases the term is 30 years.
3/2 Downpayment
Incentive programs offered by some lenders whereby a borrower able to secure a grant or gift equaling to 2% of the down payment need only provide a 3% down payment from their own funds. This is especially attractive for a borrower who is cash-short.
3.95% ARM
A monthly ARM with an initial rate of 3.95%.
Title
A document evidencing an individual’s ownership of property.
Title Insurance
An insurance policy, usually issued by a title insurance company, insuring a homebuyer against loss arising from problems connected with the title to property. The cost of the policy is usually a function of the value of the property, and is often borne by the purchaser and/or seller. Policies are also available to protect the lender’s interests.
Title Search
An examination of municipal records in order to determine the legal ownership of property. It is usually performed by a title company.
Total housing expense
The sum total of Housing expense and Monthly debt service.
Total expense ratio
The ratio of total housing expense to borrower income.This is used along with the ratio of current debt service payments to borrower income and other factors in qualifying borrowers.
Total interest payments
The sum of all interest payments to date or over the life of the loan. As this figure excludes up-front cash payments and is not adjusted for the time value of money, it does not accurately reflect the actual cost of credit to the borrower.
Transaction-Based Reserves
Mandatory loss reserves based on the amount of risk associated with individual transactions. As an example private mortgage insurers must adhere to contingency reserve requirements.
Truth in Lending
The form itself and a federal law specifying the information that must be provided to borrowers on different types of loans. It requires disclosure of the Annual Percentage Rate to homebuyers shortly after they apply for the loan. Also known as Regulation Z.
