Money put down by a potential buyer to show that they are serious about purchasing the home; it becomes part of the down payment if the offer is accepted, is returned if the offer is rejected, or is forfeited if the buyer pulls out of the deal. during the contingency period the money may be returned to the buyer if the contingencies are not met to the buyer's satisfaction.
Mortgage Terminology
It is extremely important to have a basic understanding of today’s mortgage terminology. When you understand the fundamentals, you will be better prepared to make informed decisions in connection with your mortgage. Use the menu below to navigate alphabetically to the term you are looking for.
Easements
The legal rights that give someone other than the owner access to use property for a specific purpose. easements may affect property values and are sometimes a part of the deed.
Eminent Domain
When a government takes private property for public use. the owner receives payment for its fair market value. the property can then proceed to condemnation proceedings.
Encroachments
A structure that extends over the legal property line on to another individual's property. the property surveyor will note any encroachment on the lot survey done before property transfer. the person who owns the structure will be asked to remove it to prevent future problems.
Encumbrance
Anything that affects title to a property, such as loans, leases, easements, or restrictions.
Energy Efficient Mortgage (EEM)
energy efficient mortgage; an fha program that helps homebuyers save money on utility bills by enabling them to finance the cost of adding energy efficiency features to a new or existing home as part of the home purchase
Equal Credit Opportunity Act (ECOA)
A federal law requiring lenders to make credit available equally without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs.
Equity
An owner's financial interest in a property; calculated by subtracting the amount still owed on the mortgage loon(s)from the fair market value of the property.
Escape Clause
A provision in a purchase contract that allows either party to cancel part or the entire contract if the other does not respond to changes to the sale within a set period. the most common use of the escape clause is if the buyer makes the purchase offer contingent on the sale of another house.
Escrow
Funds held in an account to be used by the lender to pay for home insurance and property taxes. the funds may also be held by a third party until contractual conditions are met and then paid out.
Escrow Account
A separate account into which the lender puts a portion of each monthly mortgage payment; an escrow account provides the funds needed for such expenses as property taxes, homeowners insurance, mortgage insurance, etc.
Estate
The ownership interest of a person in real property. the sum total of all property, real and personal, owned by a person.
Exclusive Listing
A written contract giving a real estate agent the exclusive right to sell a property for a specific timeframe.
