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GLOSSARY
Trust account
An account which manages the earnest money, money set aside for repairs, and other prepaid closing monies. These accounts are managed by the broker or the escrow agent.
Trust deed
Trust deed is a legally binding document that establishes ownership rights of a property. It's sometimes used to document the financing of real estate purchases, where ownership is assigned to a trustee until the loan is paid off. Ownership rights are transferred to the owner only after the debt obligation is fulfilled. In these arrangements, the trustee remains silent unless the borrower defaults.
Trustee
A person who manages the assets.
Truth in Lending
Truth in Lending, also known as TILA, is federal legislation that addresses predatory lending practices. Under TILA, lenders must provide loan applicants with basic loan information, such as annual percentage rate (APR), minimum payment, annual fees, credit insurance fees, etc. This information, which is provided before loan funding, assists the applicant in budgeting and in comparing competitive loan offers.
Truth-in-lending act
Disclosure in writing the terms and conditions of mortgage charges and annual percentage rate (APR) as required by the federal law.
Tuition reimbursement plan
A benefit offered by many companies as an incentive for their employees to continue their education by repaying for their tuition.
Two-cycle billing
Two-cycle billing is a means of calculating finance charges on a credit card account. The finance charges are assessed by multiplying the rate by the average daily balance on the account for the past two months. This method tends to result in higher finance charges.
Two-step mortgage
A mortgage (ARM) with an adjustable interest rate where the borrower pays a certain interest rate (usually below market rate) for the first 7 years which is then later adjusted to the market rate for the remaining period.
Two-year Treasury constant maturity
Two-year Treasury constant maturity is an index that's periodically published by the U.S. Treasury. The index value is calculated by adjusting the yields of recently auctioned U.S. Treasury bills and notes of varying maturities to the equivalent of a two-year yield.
U.S. Department of Housing and Urban Development
The U.S. Department of Housing and Urban Development, also known as HUD, is a federal department that establishes and enforces the country's housing policies. The Federal Housing Administration, or FHA, is part of HUD.
Underinsured driver
Underinsured driver is an optional coverage type available on auto insurance policies. Underinsured driver coverage pays the insured for any medical expenses or auto repair expenses that exceed the insurance limits on the at-fault party's policy.
Underpayment penalty
The penalty for not paying enough total estimated tax and withholding. You can avoid underpayment penalties by paying a percentage amount of last year's tax due or of the current year's expected tax due.
Underwater
When you owe more on the loan for a property or car than the asset is worth; you have a feeling of being underwater.
Underwriting
The process by which the lender decides if they will lend money. This decision is based on the value of the property, the borrower's credit history and any other relevant factors. It is also used to mean the process of issuing insurance policies.
Unearned income
Income which comes from interest, dividends, capital gains or rents, as opposed to earned income, such as wages, tips and salaries.