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Glossary

Term of Loan

The amount of time you have to repay the mortgage loan, usually expressed as a number of months. For example, the term for a 30-year fixed-rate mortgage is 360 months (30 years X 12 months).

Title

See Certificate of Title.

Title Insurance

Insurance that protects you and the lender from losses that may result from disputes over the property's title. Typically, you purchase two separate policies: The Lender Title Insurance, which is a part of your closing costs, and separate insurance to protect your interests.

Title Search

The examination of public records to determine that the seller is the legal owner of the property you're purchasing. The title search is a standard part of your closing costs. It is conducted by a real estate attorney or title abstractor.

Total Monthly Payment

The sum of the loan principal, interest, taxes and insurance charges (known as PITI) that make up your monthly mortgage payment.

Transfer Tax

Depending on the location, tax levied by state or local governments when property passes from one owner to another.

Trustee

A person or firm who has the legal responsibility to hold and manage property in the best interest of the owner.

Truth-in-Lending Act

A federal law, part of The Consumer Credit Protection Act, requiring lenders to clearly disclose key credit terms in a standard format. The Act also gives you the right to cancel certain types of loan contracts within three business days (see Right of Rescission).