Realty and Mortgage Terms and Definitions
Earnest Money - A sum of cash paid to a seller by a buyer prior to the closing to show that the buyer is serious about buying the house. The earnest money is deducted from the purchase price at closing and is not an additional cost. Sometimes referred to as a binder deposit.
Easement - A right of way giving persons, other than the owner, access to or over a property.
Easement by Prescription - The continued use of another person’s property for a special purpose that can develop into permanent use if certain conditions are met.
Economic Base - The industry within a certain geographic area that provides employment opportunities which are essential to support the community.
Effective Age - An appraiser’s opinion of the physical condition of a structure. The actual age of a building may be longer or shorter than its effective age.
Effective Gross Income - Normal annual income, which may include overtime and bonuses, that is regular, consistent and guaranteed. A person’s salary is usually the prime source, but other income may qualify if it is significant, documented and stable.
Elderly Applicant - As defined in the Equal Credit Opportunity Act, a person 62 or older.
Electronic Fund Transfer (EFT) Systems - A variety of systems and technologies for transferring funds electronically rather than by check.
Eminent Domain - The right of a government to seize private property for public use upon payment of its fair market value. Eminent domain is the legal basis for condemnation proceedings.
Employment Report - Includes the unemployment rate, non-farm payroll, average work week and overtime. The non-farm payroll is probably the most watched number. Increases in these numbers can be an indication of pending “wage inflation”.
Encroachment - A property improvement or obstruction that physically intrudes upon the property of another.
Encumbrance - Anything that affects the title to a property such as a mortgage, judgement, or easement.
Endorsements - Additions to a title insurance policy for special coverage such as surveys, environmental and state particular endorsements that are not included in the standard insurance policy. For our comparison purposes, the fees for endorsements are considered to be a third party fee. Some lenders may include this fee in the cost of the title insurance.
Endorser - A person who signs ownership interest over to another party.
Equal Opportunity Act (ECOA) - The federal regulations that requires lenders to make credit equally available to all 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 position in a property. Equity is the difference between the property's value and the amount that is owed on mortgages.
Escrow - Funds paid by one party to another to hold until a specific date when the funds are released to a designated individual. Generally, an escrow account refers to the funds a mortgagor pays to the lender along with their monthly principal and interest payments for the payment of real estates taxes and hazard insurance. This is also referred to as impounds. The money is held by the lender to make payments when they are due.An escrow can also refer to funds that are held by a third party to insure the completion of repairs or improvements that must be completed on the property but that cannot be done prior to closing.
Escrow Account - The account that funds are held in by the lender for the payment of real estate taxes and/or homeowner's insurance. Can also refer to the account that funds are held in for the completion of repairs or improvements to a property that cannot be completed prior to closing.
Escrow Analysis - A periodic review of escrow accounts to determine if current monthly deposits balances will provide sufficient funds to pay property taxes, hazard insurance and other bills when they come due.
Escrow Payment - The portion of a borrower’s monthly mortgage payment that is held by the loan servicing company to pay for property taxes, hazard insurance, mortgage insurance and other items as the become due.
Estate - The nature and extent of interest that an individual has in real property (degree of ownership). Also, the combined total of all real and personal property owned by an individual at the time of their death.
Eviction - The legal expulsion of an occupant from real property. Usually exercised by a lessor against a lessee to recover possession of property.
Exam Fee - A fee associated with an inspection by a title company of public records and other documents to determine the chain of ownership of a property. For our comparison purposes, exam fee is considered to be a third party fee. Some lenders may include this fee in the cost of the title insurance.
Examination of Title - The report on the title of a property from the public records. Not as thorough as a full title search.
Exclusive Listing - A written contract that gives a licensed real estate agent the exclusive right to sell property for a specific time, but reserving the owner’s right to sell the property without the payment of a commission.
Executor - A person named in a will to administer an estate. Most Courts will appoint an administrator if no executor is named. (The feminine form is executrix)
Existing Home Sales - Reports the number of existing homes sold, expressed on an annual basis. Can be combined with New Home Sales to determine the total volume of home sales, a strong indicator of future national mortgage origination volume. Frequency: monthly. Source: National Association of Realtors.