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Takeout Mortgage Loan [back to top]
A long term mortgage loan that is advanced to borrower on completion of construction or in compliance with any other conditions in the loan commitment.
Tax Certificate [back to top]
At the time of a sale, the lawyer for the buyer must confirm that all local taxes have been paid up to date. If they are, a tax certificate is issued from which any adjustments can be made - usually requiring the buyer to compensate the seller for any prepaid taxes. However, if the taxes are not up to date, the municipality requires that the seller pay them off from the proceeds of the sale. If there are insufficient proceeds, then it usually falls on the buyer to pay them.
Tax Lien [back to top]
A lien imposed by a taxing authority on real estate for failure to pay taxes within the time required by law.
Tenancy In Common [back to top]
Ownership by two or more persons; however, unlike joint tenancy, in that interest the deceased does not pass to the survivor but is treated as an asset of the deceased's estate.
Term [back to top]
The length of the current mortgage agreement. A mortgage may be amortized over a long period (such as 25 years) with a shorter term (six months to five years or more). After the term expires, the balance of the principal then owing on the mortgage can be repaid or a new mortgage agreement can be entered into at the then current interest rates.
Title [back to top]
The means of evidence by which the owner of land can prove their ownership.
Title Insurance [back to top]
A policy which insures the lender against loss due to a flaw in the title of property held as collateral for a mortgage, and thus the mortgage lender against any legal questions on the title to the real estate or of legal priority of the mortgagee.
Title Search [back to top]
An examination of the title of a property as indicated in the public records in order to determine the ownership of the subject property and the existence of any encumbrances or defects.
Total Debt Service Ratio (TDSR) [back to top]
The percentage of gross annual income required to cover payments associated with housing and all other debts and obligations. The Total Debt Service Ratio (TDS) is a percentage calculated by dividing monthly shelter costs (principal, interest, property taxes, heating and half of condominium fees if applicable) PLUS all other monthly debt obligations by the gross monthly income and multiplying by 100. TDS is used by all lenders as the upper limit on which to measure the ability of a borrower to make mortgage payments. Most lenders require that this ratio be no more than 40% for a particular application with some as low as 37%; 40% is also the maximum qualifying TDS in most applications for default insurance.
Transfer [back to top]
To convey from one person to another.
Transfer of Title [back to top]
A document signed by the seller and purchaser transferring ownership, at which time the document is registered against the property.
Trust Account [back to top]
An account held by an agent on behalf of their principal for the payment of money due to a third party on the event of specified incidents. For example, a vendor's lawyer will hold funds on their behalf until title deeds to property have been delivered and property registered and the keys delivered to the purchaser, or an account maintained by a mortgagee for the payment of property taxes or life insurance premiums.