Tax savings
Tax savings are the amount you may save in taxes from a tax deduction or credit that you would otherwise pay if you did not have the deduction or credit. To calculate tax savings from a deduction, multiply the amount of the deduction by your marginal income tax rate. Here are some examples: At an income tax rate of 27%, a $2,000 qualified contribution to a company retirement plan may save you $560 in taxes. And if you paid $10,000 in home mortgage interest, you may save up to $2,700 in income taxes if you are in the same tax bracket. Your deductions for interest expense on mortgage and home equity debt may be limited. For businesses, tax savings may be realized on such deductible expenses as lease payments, interest on loan payments, and depreciation expenses. (This definition does not constitute tax advice; please consult a tax advisor regarding your situation.)
Tenure
Equal monthly payments to an HECM borrower, as long as at least one borrower lives and continues to occupy the property as a principal residence. A related payment option, Modified Tenure, is a combination of line of credit plus scheduled monthly payments for as long as one borrower remains in the home.
Term
The period of a loan, generally measured in years. Mortgage loans are usually for 15 or 30 years, although 10-, 20- and 40-year terms may also be available.
Title
A legal document that shows who owns an asset. A title includes any liens or other encumbrances, which are claims on the asset by lenders.
Title insurance
Title insurance covers the expenses necessary to perform a records search of your property's ownership history, and may protect you from claims that my be made against your ownership of the property, such as heirs or creditors of former owners. Borrowers are usually required to buy a title insurance policy to protect their lender. The extent of your coverage depends upon whether you have an owner's standard coverage or extended-coverage title insurance policy.
Title search
A review for any liens or other encumbrances that may be recorded on a parcel of real estate. A title search is a step in the process of due diligence that a lender does as part of making a mortgage loan.
Total net worth
Your total net worth is the total of all of your assets (stocks, bonds, bank accounts, home equity, real estate, personal property, business receivables, notes receivable, and so on) minus the total of your liabilities (outstanding loans owed, credit card balances, taxes payable, bills payable, etc.)
Treasury bills (T-bills)
U.S. Treasury bills are short-term debt obligations of the U.S. Treasury and are often used as indexes for adjustable rate mortgages. T-bills are usually issued to mature in three or six months. Prices for T-bills are stated as a discount to the par value. For example, a T-bill with a price of 99.65 is selling for 99.65% of its par value. T-bills are auctioned weekly and used to pay operations of the federal government.
Truth in Lending Act (TILA)/Truth in Lending Statement
The Truth in Lending Act (TILA) is a consumer protection law that requires lenders to disclose, through a Truth in Lending Statement, all of your loan costs, your true interest cost as an annual percentage rate, and total number of payments you will make over the loan term.
203b Limit
The dollar limit for the portion of a home's value that can be used to determine the amount of funds available from a federally insured HECM reverse mortgage. 203B limits vary per county and state. The origin of the term 203b is from Section 203b of the National Housing Act.
