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Glossary

Earnest Money

A deposit made in good faith when you make an offer on a home. The money is generally applied to the down payment at closing, and is not refundable.

Easement

A right of way that allows you access to another owner's property for a specific purpose — for example, access to a water line.

Equal Credit Opportunity Act (ECOA)

A federal law requiring lenders to make credit equally available to all applicants without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of public assistance.

Equity

Your "financial interest" in a property, determined by subtracting all amounts owed from the property's current market value. Example: Property Current Market Value = $200,000 Mortgage Loans and Liens = $150,000 Owner's Equity = $50,000Your "financial interest" in a property, determined by subtracting all amounts owed from the property's current market value. Example: Property Current Market Value = $200,000 Mortgage Loans and Liens = $150,000 Owner's Equity = $50,000Your "financial interest" in a property, determined by subtracting all amounts owed from the property's current market value. Example: Property Current Market Value = $200,000 Mortgage Loans and Liens = $150,000 Owner's Equity = $50,000Your "financial interest" in a property, determined by subtracting all amounts owed from the property's current market value. Example: Property Current Market Value = $200,000 Mortgage Loans and Liens = $150,000 Owner's Equity = $50,000Your "financial interest" in a property, determined by subtracting all amounts owed from the property's current market value. Example: Property Current Market Value = $200,000 Mortgage Loans and Liens = $150,000 Owner's Equity = $50,000Your "financial interest" in a property, determined by subtracting all amounts owed from the property's current market value. Example: Property Current Market Value = $200,000 Mortgage Loans and Liens = $150,000 Owner's Equity = $50,000Your "financial interest" in a property, determined by subtracting all amounts owed from the property's current market value. Example: Property Current Market Value = $200,000 Mortgage Loans and Liens = $150,000 Owner's Equity = $50,000Your "financial interest" in a property, determined by subtracting all amounts owed from the property's current market value. Example: Property Current Market Value = $200,000 Mortgage Loans and Liens = $150,000 Owner's Equity = $50,000Your "financial interest" in a property, determined by subtracting all amounts owed from the property's current market value. Example: Property Current Market Value = $200,000 Mortgage Loans and Liens = $150,000 Owner's Equity = $50,000

Equity Line of Credit

An open-ended loan using the equity you have in your home as security for an approved line of credit. Also known as Home Equity Line of Credit (HELOC.)

Escrow

Your money that is set aside and held in trust by a third party. In a mortgage transaction the funds are commonly used for homeowner's insurance and property tax payments.

Escrow Account

A trust account created by a third party to hold money. In a mortgage transaction, generally these funds are used to pay taxes and insurance bills when they become due. To fund the account, monthly mortgage payments may include 1/12 of annual property taxes and insurance.

Escrow Analysis

Periodic examination of escrow accounts to determine if current monthly deposits are enough to pay taxes, insurance, and other bills when due. Lenders are required to review escrow accounts annually, and to provide you with the analysis.

Escrow Closing

A term used to describe closings in states where Deeds of Trust are used instead of mortgages. Generally, the title company will act as the escrow agent, and supervise the transfer of funds and property.

Escrow Payment

The portion of your monthly mortgage payment held in an escrow account to pay taxes, homeowner's insurance, mortgage insurance, lease payments and other items as they become due. In some states, this is known as impounds, or reserves.

Escrow State

States that structure closings differently. You and the seller are not required to be in the same location. Instead, the closing agent coordinates the document signings as well as the funding of the loan with the assistance of a real estate agent involved in the sale or purchase. In some cases the closing, funding, and recording of the loan can occur on the same day, but usually the closings and funding will occur on different days. You may sign documents without certified check in hand if the loan is not funding on the same day. Attorneys are not present at closing. Currently, the escrow states are: Alaska, Arizona, California, Hawaii, Idaho, Nevada, New Mexico, parts of Ohio, Oregon, Utah and Washington.States that structure closings differently. You and the seller are not required to be in the same location. Instead, the closing agent coordinates the document signings as well as the funding of the loan with the assistance of a real estate agent involved in the sale or purchase. In some cases the closing, funding, and recording of the loan can occur on the same day, but usually the closings and funding will occur on different days. You may sign documents without certified check in hand if the loan is not funding on the same day. Attorneys are not present at closing. Currently, the escrow states are: Alaska, Arizona, California, Hawaii, Idaho, Nevada, New Mexico, parts of Ohio, Oregon, Utah and Washington.States that structure closings differently. You and the seller are not required to be in the same location. Instead, the closing agent coordinates the document signings as well as the funding of the loan with the assistance of a real estate agent involved in the sale or purchase. In some cases the closing, funding, and recording of the loan can occur on the same day, but usually the closings and funding will occur on different days. You may sign documents without certified check in hand if the loan is not funding on the same day. Attorneys are not present at closing. Currently, the escrow states are: Alaska, Arizona, California, Hawaii, Idaho, Nevada, New Mexico, parts of Ohio, Oregon, Utah and Washington.States that structure closings differently. You and the seller are not required to be in the same location. Instead, the closing agent coordinates the document signings as well as the funding of the loan with the assistance of a real estate agent involved in the sale or purchase. In some cases the closing, funding, and recording of the loan can occur on the same day, but usually the closings and funding will occur on different days. You may sign documents without certified check in hand if the loan is not funding on the same day. Attorneys are not present at closing. Currently, the escrow states are: Alaska, Arizona, California, Hawaii, Idaho, Nevada, New Mexico, parts of Ohio, Oregon, Utah and Washington.States that structure closings differently. You and the seller are not required to be in the same location. Instead, the closing agent coordinates the document signings as well as the funding of the loan with the assistance of a real estate agent involved in the sale or purchase. In some cases the closing, funding, and recording of the loan can occur on the same day, but usually the closings and funding will occur on different days. You may sign documents without certified check in hand if the loan is not funding on the same day. Attorneys are not present at closing. Currently, the escrow states are: Alaska, Arizona, California, Hawaii, Idaho, Nevada, New Mexico, parts of Ohio, Oregon, Utah and Washington.States that structure closings differently. You and the seller are not required to be in the same location. Instead, the closing agent coordinates the document signings as well as the funding of the loan with the assistance of a real estate agent involved in the sale or purchase. In some cases the closing, funding, and recording of the loan can occur on the same day, but usually the closings and funding will occur on different days. You may sign documents without certified check in hand if the loan is not funding on the same day. Attorneys are not present at closing. Currently, the escrow states are: Alaska, Arizona, California, Hawaii, Idaho, Nevada, New Mexico, parts of Ohio, Oregon, Utah and Washington.States that structure closings differently. You and the seller are not required to be in the same location. Instead, the closing agent coordinates the document signings as well as the funding of the loan with the assistance of a real estate agent involved in the sale or purchase. In some cases the closing, funding, and recording of the loan can occur on the same day, but usually the closings and funding will occur on different days. You may sign documents without certified check in hand if the loan is not funding on the same day. Attorneys are not present at closing. Currently, the escrow states are: Alaska, Arizona, California, Hawaii, Idaho, Nevada, New Mexico, parts of Ohio, Oregon, Utah and Washington.States that structure closings differently. You and the seller are not required to be in the same location. Instead, the closing agent coordinates the document signings as well as the funding of the loan with the assistance of a real estate agent involved in the sale or purchase. In some cases the closing, funding, and recording of the loan can occur on the same day, but usually the closings and funding will occur on different days. You may sign documents without certified check in hand if the loan is not funding on the same day. Attorneys are not present at closing. Currently, the escrow states are: Alaska, Arizona, California, Hawaii, Idaho, Nevada, New Mexico, parts of Ohio, Oregon, Utah and Washington.States that structure closings differently. You and the seller are not required to be in the same location. Instead, the closing agent coordinates the document signings as well as the funding of the loan with the assistance of a real estate agent involved in the sale or purchase. In some cases the closing, funding, and recording of the loan can occur on the same day, but usually the closings and funding will occur on different days. You may sign documents without certified check in hand if the loan is not funding on the same day. Attorneys are not present at closing. Currently, the escrow states are: Alaska, Arizona, California, Hawaii, Idaho, Nevada, New Mexico, parts of Ohio, Oregon, Utah and Washington.

Estate

The total of property, possessions, and debt owned at the time of death.

Estimated Gross Costs of Buying

The total amount of principal and interest payments over the number of years that you plan to own your home.

Estimated Increase in Equity

A property's estimated increase in value, determined by applying an estimated rate of appreciation for a specific number of years.

Estimated Net Costs of Buying

The estimated gross costs of buying a home minus estimated tax savings and estimated increase in equity.