Bankrate's financial glossary
Did you run across an unfamiliar term when applying for a mortgage, credit card
or auto loan? Find the meaning here, along with definitions of other financial words
and phrases, in Bankrate.com's financial glossary.
A tax deduction is an amount that the IRS allows you to subtract from your income before computing your income tax. If you have taxable income of $30,000 and deductions of $3,000, then you would figure how much tax you owe on the difference -- $27,000. People may take a standard deduction on federal income taxes, an amount established each year by the IRS for each filing status. Or, if they have a greater amount of deductions than the standard amount, they can deduct them by itemizing expenses on Schedule A. Typical itemized deductions include mortgage interest, some loan points, property taxes and state income taxes. Some other items -- such as alimony payments, moving expenses, deductible IRA and Keogh contributions -- may be deducted directly on the long Form 1040.
A levy by a state or local government on the change of ownership of real estate.
One who takes all or part of the mortgage application and transfers or sells it to a lender.
A company that checks a property's title for liens and other obstacles to sale, fixes any clouds to title, supervises the closing transaction, and makes sure that money transfers in a purchase are processed correctly.
A legal claim by others to property, or the right to make demands upon an owner.
A policy that guarantees that an owner properly has title to a property and can legally transfer title to someone else. Should a problem arise, the title insurer pays any legal damages.
A check of public records to make sure that the owner of real property has the right to transfer ownership. A title search is designed to spot gaps in the chain of title, liens, problems with the legal description of the property, judgments against the owner, and the like.
Total expense ratio
The percentage of monthly debt payments compared to total before-tax income.
A swap of property, such as real estate or a car, as part of a down payment for other real estate.
Selling a house to buy a more-expensive house.