Tax rate
The percentage of your income that you owe in income taxes.

Tax savings
The amount you may save in taxes by itemizing deductions on income tax returns. Mortgage interest and property taxes are two expenses that you may realize tax savings on, since you may be able to deduct these expenses from your income. Always check with your tax advisor for advice on tax deductibility.

Term
The number of years it will take to pay off a loan. The loan term is used to determine the payment amount, repayment schedule and total interest paid over the life of the loan. For example, at the following terms a loan of $200,000 with a 7.500% APR would have the following payments and total interest paid:

  • 15-year mortgage: 180 monthly payments of $1,854 each and total interest paid of $133,724.
  • 20-year mortgage: 240 monthly payments of $1,611 each and total interest paid of $186,886.
  • 30-year mortgage: 360 monthly payments of $1,398 each and total interest paid of $303,435.
Example assumes an 80% loan-to-value ratio, based on an APR of 7.500% and no points. Amounts may be rounded up. Closing costs apply. If the down payment is less than 20%, mortgage insurance may be needed, which could increase the monthly payment and APR. For adjustable rate loans, rates are subject to increase after the initial fixed-rate period. Loans are subject to credit approval. Flood and/or property insurance may be required. Rates and terms are subject to change without notice and may vary depending upon your credit history.

A 15-year mortgage compared to a 30-year mortgage, using this information, would save you $169,711 in interest.

Third-party fees
Fees charged for services rendered by parties other than the borrower or the lender. Such fees may include appraisal, credit report, title and flood certifications.

Title
Written evidence of ownership in property.

Title insurance
Insurance that protects an interested party, either the owner or the lender, against defects that would affect legal ownership of the property.

Title search
An examination of records used to determine the legal ownership of property and all liens and encumbrances on it. Usually performed by a title company or attorney.

Titleholder
The legal owner of real property, including a home or automobile.

Total cash required to close
The total of all closing costs, points, prepaid expenses, down payment and any other fees or adjustments due at closing.

Total housing expense
The total of all of your combined expenses due to the ownership of property, including: principal, interest, property taxes, homeowners' insurance, mortgage insurance, homeowners' association dues and any special assessments.

Townhome
A type of residence that shares common walls with other dwellings.

Trade-in value
The dollar amount the dealer will give you for the car you now own as a down payment on the car you want to buy.
Transaction fee
The fee that may be charged each time you draw on your credit line.

Truth-in-Lending Act
A federal law requiring disclosure of credit terms using a standard format. This is intended to facilitate comparisons between the lending terms of different financial institutions.

Types of loans
Major types of loans include:

  • Mortgage loans. Loans you take out to pay for your home.
  • Home equity loans and lines of credit. Loans you take out using the equity in your home as collateral.
  • Consolidation loans and refinancings. Loans you take out to repay other loans.
  • Personal property secured loans. Loans you take out to pay for an auto, boat or other personal property that will serve as collateral for the loan.

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