Glossary

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Earnest Money Deposit
A deposit made by the potential home buyer to show that he or she is serious about buying the house.

Easement
A right of way giving persons other than the owner access to or over a property.

Effective Age
An appraiser's estimate of the physical condition of a building. The actual age of a building may be different than its effective age.

Effective Gross Income
Normal annual income including overtime that is regular or guaranteed. The income may be from more than one source. Salary is generally the principal source, but other income may qualify if it is significant and stable.

EPR
Similar to the Annual Percentage Rate (APR), the Effective Percentage Rate (EPR) measures the cost of a mortgage stated as a yearly rate and includes such items as interest, mortgage insurance, and loan origination fee (points). The difference between the EPR and the APR is that the APR calculates the cost of a loan over the entire term of the loan (30 year, for example). The EPR calculates the cost of the loan over the time you expect to keep the loan. This changes the relative costs of different loans because it spreads your closing costs over what is usually a shorter time.

Emergency Reserves
Funds left after you have made your down payment and paid all closing costs. Some lenders require enough funds in reserve to pay two monthly mortgage payments.

Eminent Domain
The right of a government to take private property for public use upon payment of its fair market value. Eminent domain is the basis for condemnation proceedings.

Encroachment
An improvement that intrudes illegally on another's property.

Encumbrance
An outstanding lien or claim against real property.

Endorser
A person who signs ownership interest over to another party. Contrast with co-borrower

Equal Credit Opportunity Act (ECOA)
A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs. See ECOA form

Equity
A homeowner's financial interest in a property. Equity is the difference between the fair market value of the property and the amount still owed on its mortgage. For example, if the fair market value of your home is $125,000 and your mortgage balance is $119,000, then your equity equals $6,000.

Equity Line of Credit
A mortgage loan, which is usually in a subordinate position, that allows the borrower to obtain multiple advances of the loan proceeds at his or her own discretion, up to an amount that represents a specified percentage of the borrower's equity in a property.

Escrow
A deposit of money, valuables or documents with an impartial third party.

Escrow Account
The account in which a mortgage servicer holds the borrower's escrow payments prior to paying property expenses. See escrow.

Escrow Analysis
The periodic review of escrow accounts to determine if current monthly deposits are adequate to pay taxes, insurance, and other bills when they are due.

Escrow Collections
Funds collected by the servicer and set aside in an escrow account to pay the borrower's property taxes, mortgage insurance, and hazard insurance.

Escrow Disbursements
The use of escrow funds to pay real estate taxes, hazard insurance, mortgage insurance, and other property expenses as they become due.

Escrow Payment
The portion of a borrower's monthly payment that is held by the servicer to pay for taxes, hazard insurance, mortgage insurance, and other items as they become due. Known as "impounds" or "reserves" in some states.

Estate
The ownership interest a person has in real property. Also the total value of all the real property and personal property owned by an individual at the time of their death.

Eviction
The legal process to remove an occupant from real property.

Examination Of Title
Reviewing a property's chain of title from the public records or an abstract of the title.

Exclusive Listing
A written contract that gives a licensed real estate agent the exclusive right to sell a property and collect a commission for a specified time, but reserving the professional loan officer’s right to sell the property alone without paying a commission.