Home  Resources Glossary RD Glossary - down payment
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The part of the purchase price of a property that the buyer pays in cash and does not finance with a mortgage.
- due-on-sale provision
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A provision in a mortgage that allows the lender to demand repayment in full if the borrower sells the property that serves as security for the mortgage.
- earnest money deposit
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A deposit made by the potential home buyer to show that he or she is serious about buying the house.
- easement
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A right of way giving persons other than the owner access to or over a property.
- effective age
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An appraiser’s estimate of the physical condition of a building. The actual age of a building may be shorter or longer than its effective age.
- eminent domain
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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
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An improvement that intrudes illegally on another’s property.
- encumbrance
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Anything that affects or limits the fee simple title to a property, such as mortgages, leases, easements, or restrictions.
- Equal Credit Opportunity Act (ECOA)
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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.
- equity
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A homeowners 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 and other liens.
- escrow
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An item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition. For example, the earnest money deposit is put into escrow until delivered to the seller when the transaction is closed.
- escrow account
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Once you close your purchase transaction, you may have an escrow account or impound account with your lender. This means the amount you pay each month includes an amount above what would be required if you were only paying your principal and interest. The extra money is held in your impound account (escrow account) for the payment of items like property taxes and homeowner’s insurance when they come due. The lender pays them with your money instead of you paying them yourself.
- escrow analysis
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Once each year your lender will perform an "escrow analysis" to make sure they are collecting the correct amount of money for the anticipated expenditures.
- escrow disbursements
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The use of escrow funds to pay real estate taxes, hazard insurance, mortgage insurance, and other property expenses as they become due.
- estate
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The ownership interest of an individual in real property. The sum total of all the real property and personal property owned by an individual at time of death.
- eviction
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The lawful expulsion of an occupant from real property.
- examination of title
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The report on the title of a property from the public records or an abstract of the title.
- exclusive listing
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A written contract that gives a licensed real estate agent the exclusive right to sell a property for a specified time.
- executor
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A person named in a will to administer an estate. The court will appoint an administrator if no executor is named. "Executrix" is the feminine form.
- Fair Credit Reporting Act
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A consumer protection law that regulates the disclosure of consumer credit reports by consumer/credit reporting agencies and establishes procedures for correcting mistakes on ones credit record.
- fair market value
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The highest price that a buyer, willing but not compelled to buy, would pay, and the lowest a seller, willing but not compelled to sell, would accept.
- Fannie Mae (FNMA)
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The Federal National Mortgage Association, which is a congressionally chartered, shareholder-owned company that is the nations largest supplier of home mortgage funds. For a discussion of the roles of Fannie Mae, Freddie Mac (FHLMC), and Ginnie Mae (GNMA), see the Library.
- Fannie Maes Community Home Buyers Program
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An income-based community lending model, under which mortgage insurers and Fannie Mae offer flexible underwriting guidelines to increase a low- or moderate-income familys buying power and to decrease the total amount of cash needed to purchase a home. Borrowers who participate in this model are required to attend pre-purchase home-buyer education sessions.
- Federal Housing Administration (FHA)
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An agency of the U.S. Department of Housing and Urban Development (HUD). Its main activity is the insuring of residential mortgage loans made by private lenders. The FHA sets standards for construction and underwriting but does not lend money or plan or construct housing.
- fee simple
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The greatest possible interest a person can have in real estate.
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