MORTGAGE GLOSSARY

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TANDEM PLAN:
A joint program of the Government National Mortgage Association (GNMA) and the Federal National Mortgage Association (FNMA) to provide low-interest home loans.

TEASER RATE:
A lower interest rate charged on an adjustable or variable rate mortgage for a brief, introductory period as an inducement to the borrower to accept the loan from the lender.

TERM LOAN:
A loan that comes due on a given date, often before the periodic payments would pay the loan out.

TERM, AMORTIZATION:
Term: The period of time during which the loan contract is active, during which the borrower makes periodic payments to the lender and at the end of which the balance of the loan becomes due and payable.
Amortization: The period of time after which, if all periodic payments are made on time and in full, the loan will be paid out. Term may not be the same as amortization: a normal mortgage may be amortized over 25 years with just a five year term at which time the borrower has to re-finance.

TERMS:
The various clauses that make up a contract. Sometimes used to described the financial portions of the contract only.

TITLE THEORY STATES:
Jurisdictions in which ownership of land is divided into two interests: legal title and equitable title. When an owner registers a mortgage in favor of a lender, legal title is transferred to the lender while the owner retains equitable (or beneficial) title. Once the mortgage is paid out, legal title is transferred back to the owner.

TOTAL DEBT RATIO:
Comparison of the total costs of living for a person (including debt, food, utilities) over a given period with the gross income of that person.

TOTAL INTEREST PAYMENTS:
A calculation of all interest paid on a loan over its life.

TRANSACTION FEE:
A charge for making a withdrawal on a line of credit or other bank account.

TRUST DEED:
An instrument of conveyance of title to property wherein the transferee will be holding the title to the property on behalf of another person.

TRUSTEE:
A person who holds title to property on behalf of another (a "beneficiary of the trust").

TRUSTEE'S SALE:
Sale conducted by a trustee (often the lender) under the terms of the deed of trust.

TRUTH-IN-LENDING ACT: A federal law which requires lenders to disclose all terms of a loan arrangement to the borrower in a specified form.

TWO-STEP MORTGAGE:
A mortgage contract in which the interest rate changes after a given period of time, such that the rate charged is lower for the first part of the term of the mortgage and then market rate or higher later in the term.