 Glossary A-B |
Glossary E-L |
| Glossary C-D |
Glossary M-Z |
earnest money deposit
A deposit made by potential home buyers to show that they're serious about buying the property.
easement
A right of way granting access on a property for someone other than the owner.
encumbrance
Anything that has an effect on a property's title. For example, mortgages, judgments, liens, easements, etc.
Equal Credit Opportunity Act (ECOA)
A federal law that states credit must be granted equally, regardless of race, color, gender, religion, ethnicity, age, marital status, or other factors.
Equity
How much a homeowner has invested in a property. Equity is the difference between what the homeowner owes and how much the home is worth.
escrow account
Commonly used after closing on a home. This is an account set up that you automatically pay into with your monthly payment. For example, an escrow account could be set up to pay the property taxes. You pay your normal (principal and interest) payment PLUS extra to cover taxes at year's end. This money is held in an escrow account until they come due.
examination of title
A report on a property's title showing any encumbrances on it.
fair market value
A reasonable estimation of what a property is worth, based on comparable properties and adjusted for unique property characteristics.
Fannie Mae (FNMA)
The Federal National Mortgage Association is a government chartered, shareholder-owned company that supplies mortgages. Includes Fannie Mae, Freddie Mac (FHLMC), and Ginnie Mae (GNMA).
Federal Housing Administration (FHA)
An agency of the U.S. Department of Housing and Urban Development (HUD). They insure loans and set home standards.
FHA mortgage
The Federal Housing Administration (FHA) insures certain types of loans. Along with VA loans, FHA loans are government loan.
first mortgage
The mortgage that is in top priority among all loans on a property.
fixed-rate mortgage
A mortgage where the interest rate does not change.
flood insurance
Insurance that covers damage caused by flood. Required in properties located in federally designated flood areas.
foreclosure
The legal process where a homeowner who has failed to make good on their mortgage is forced to give up their interest in a property.
hazard insurance
Insurance on a home that covers damage to a property from hazards like wind, fire, vandals, etc.
home equity line of credit
A mortgage where a homeowner takes their equity back out of their mortgage in the form of cash.
home inspection
A licensed home inspector makes an inspection to identify possible concerns and ascertain the condition of a property. Usually performed by a buyer when offering on a home.
homeowners' association
An organization that represents the interests of a certain community. They may collect dues, impose restrictions, and establish benefits.
homeowner's insurance
An insurance policy that covers a home and its contents.
homeowner's warranty
A warranty that can be purchased by a homeowner to cover a home and its appliances, structure, etc. should they break down.
liability insurance
Insurance that covers the liability a homeowner may have for damages cause by their property or negligence on their property.
lien
A legal claim against a property set by a judge. A lien must be paid off when the property is sold.
line of credit
An agreement by a lender to give credit to a certain borrower for a certain amount.
liquid asset
A cash asset or an asset that is easy to convert into cash.
loan officer
The person who helps a buyer secure a loan. They work with a buyer on the details of the loan; its structure, its rate, etc.
loan-to-value (LTV)
How much a property is worth vs. the amount of the loan on that property, usually expressed as a percentage.
lock-in
Securing a specific interest rate for a specific amount of time.
