Mortgage Glossary
There are a lot of unfamiliar terms that get tossed around during the mortgage process. But don't worry, we've put together this glossary to help you get a better grasp of any terms that may be less than clear.
E
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.