Tax and Insurance Escrow – An escrow account funded through monthly contributions by the mortgagor, required by a mortgage lender to fund annual property tax assessments and hazard insurance premiums, and thus lowering the risk of default by the borrower.

Tax Lien – A lien against a property for failure to pay the taxes.

Teaser Rate – The initial contract interest rate charged on an adjustable rate mortgage for the first adjustment interval, and is significantly lower than the full adjusted rate at the time.

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 – As opposed to joint tenancy, when there are two or more individuals on title to a piece of property, this type of ownership does not pass ownership to the others in the event of death.

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.

Terms – The arrangements and conditions that are specified within a contract.

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.

Time is of the Essence – The phrase that, when included in a contract, requires all references to specific dates and times of day noted in the contract be understood as exact, and which in its absence extreme delays could be acceptable.

Title – A legal document evidencing a person’s right to or ownership of a property.

Title Company – A company that specializes in examining and insuring titles to real estate.

Title Defect – An unresolved claim against the ownership of a property that prevents the seller from providing the buyer a clear title to the property.

Title Insurance – Insurance that protects the lender (lender’s policy) or the buyer (owner’s policy) against loss arising from disputes over ownership of a property.

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.

Title Theory State – A state where the lender has legal title to the mortgaged property and the borrower has an equitable title, in contrast with lien theory state. Taxes is not a title theory state.

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 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 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).

Triple Net Lease – A lease that the tenant pays all operating expenses for the property so that the landlord receives net rent with tenant paying; taxes, insurance, and maintenance in addition to normal operating expenses

Trust – An entity where property is transferred to a trusted third party trustee by a grantor/trustor, where the trustee holds the property for the benefit of the beneficiary of the trust.

Trust Deed – The conveyance of real estate to a third party to be held for the benefit of another. It is commonly used in some states instead of mortgages that conditionally convey title to the lender; same as a Deed of Trust.

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.