Real Estate Definitions
|
|
|---|
Takeout Mortgage Loan A long term mortgage loan that is advanced to a borrower on the completion of construction or in compliance with any other conditions in the loan commitment. The funds are typically used to pay off or take out the construction lender. Tangible Personal Property Assets other than real estate that physically exist. Business equipment and vehicles are tangible personal property whereas stock certificates and franchises only represent value and are therefore intangible property. Tax Deduction An allowable (by government) expense that can be subtracted from income before calculating income tax. Tax Deferral A method used to postpone current year taxes to a later year. This is typically done by recognizing income or a gain at a later time. It is important to remember that using tax deferral only delays tax liability, it does not eliminate it. Tax Exempt Income that is not subject to taxation. It is important to note that income exempt from federal taxation is not necessarily exempt from provincial taxation. Tax Liability The total amount of tax owed by an individual. Tax Lien A claim or obstacle that prevents the sale of a property due to unpaid taxes. The property title cannot be transferred until all liens are cleared. Tax Sale Property that is sold by the government to recover unpaid taxes. Tax-sheltered A savings or investment plan that offers significant tax savings. Taxable Income Income that is subject to taxation after accounting for adjustments, exemptions, and deductions. Tear-down Condition A property that is purchased for the sole purpose of tearing it down to build a newer house. These types of properties are generally located in desirable locations with spectacular views or amenities. Teaser Rate The the below-market interest rate that is offered by lenders or credit card companies to gain new business. Offering a below-market interest rate often encourages people to switch credit cards or lenders to save money. Also known as an introductory rate. Tenancy by the Entirety The ownership of a property by spouses where each spouse owns an undivided interest in the entire property. When one spouse passes away, the other holds title to the entire property. Tenancy In Common Ownership of a property by two or more persons. If one tenant passes away, his or interest does not pass to the survivor. It is treated as an asset of the deceased's estate. Tenants in Common The ownership of a property by two or more individuals where each owns an undivided interest in the entire property and each has equal rights to use the property. If one tenant in common passes away, his or her interest may be sold, mortgaged, or given to an individual named in the will. Tenure The means, process, duration, or right of holding something such as the title of real property and conditions by which the property is held. Term 1. A limited or set period of time. 2. When dealing with a mortgage, term refers to the length of time in which a borrower agrees to pay back the lender. The interest rate and payment schedule is also predetermined. The interest rate typically stays constant during the term unless otherwise specified in the loan agreement. For example, a five year fixed rate mortgage has a term of five years. Term Deposit An investment product where a fixed sum of money is deposited into an account for a set period of time with interest paid over the term. Term Loan A loan intended for medium or long term financing that provides cash to purchase fixed assets such as machinery, land or buildings, or to renovate business premises. Third-party Originator An individual or company that begins a loan application, but transfers or sells it to a lender. Time Deposit A type of account where deposits are made for a specified length of time (until maturity) at which time the account reverts to another type of account or is "rolled over" for another fixed period of time. Timeshare A form of property ownership where multiple owners take turns using the property at designated times throughout the year. Timeshares are typically vacation homes located in resort destinations. Title Evidence or written proof that shows a person's right to possession or ownership of a property. Title Company A company that reveiws a property's title prior to its sale. The company looks for any liens or claims and works to fix any issues that are found. They also supervise the closing transaction and ensure that final money transfers are processed correctly. Title Defect A legal claim made by an external party against the property or the right of another party to make demands upon the property owner. Title Insurance A policy that protects the lender against loss which can result from inconsistencies in a property title such as liens or claims against the property. This policy also protects the homeowner if he or she purchases an owner's policy in addition to the title insurance. Title Report A report that reveals any competing claims, liens, or other problems relating to a property. A title report is required before title insurance will be issued. Also known as a "Preliminary Title Report" or "Prelim." Title Search An examination of public records to ensure that an owner of real property has the right to transfer ownership of the title. This type of search is designed to identify disparities in the chain of title, liens, problems with the legal description of the property, judgments against the owner, etc. Torrens System A system that is provided by Provincial law for the registration of land titles. The system records the state of the title, including ownership and encumbrances without the necessity of an additional search of the public records. Also known as the "Land Titles System." Total Debt Service The ratio of a borrower's total monthly debt as compared to his or her monthly gross income. Lenders use this ratio to determine how much the loan applicant is allowed to borrow. Total Expense Ratio The percentage of monthly debt payments compared to total before-tax income. Trade Equity The exchange of property as part of a down payment when opting to buy another property. Other properties and vehicles are commonly used in trade equity as partial down payment. Trade-in Value When purchasing a new vehicle, the dealership will accept your existing vehicle as a partial or full payment towards your purchase.The amount credited is typically five percent below the wholesale value of the vehicle. Trading Down When a more expensive property is sold to purchase a less expensive property. Trading Up When one property is sold to buy a more expensive property. Trans Union One of the major Canadian credit bureau companies along with Equifax. Transaction A record of business conducted such as an action in a bank account. It may be a deposit, withdrawal, debit card payment, service charge, or interest payment. Transaction Date The transaction date refers to a calendar date when goods or services were purchased or when banking transactions such as cash advances, deposits, and withdrawls were made. Travellers' Cheques Travellers' cheques are accepted just like cash, but they offer more security to travellers because they can be replaced if lost or stolen. These cheques can be purchased through your bank. Some banks charge a fee for travellers' cheques while others include the fee in customer service packages. Treasury Bills (T-Bills) Short-term government obligations that are payable to the bearer and sold on a discount basis; the difference between a T-bill's market or discounted price and its face or redemption value is effectively interest if the T-bill is held to maturity. Trust A trust is a fund that is set up similar to a will. The trust specifies how money or property will be disbursed, it lists the recipients or beneficiaries, and names one or more trustees to manage the assets. An irrevocable trust cannot be changed after the terms are finalized; a revocable trust has more room for how much can be transferred, but it is usually more expensive to maintain. Trust Account An account used by a law firm or real estate agent to control funds set aside for costs associated with a real estate transaction. This account also holds any other money put forth by the buyer and seller before the closing. Trustee An individual that manages assets or holds legal title to property in order to administer it for a beneficiary. |
|
|
|
|---|
