We hope this Glossary of Mortgage and Real Estate Terms helps you understand the home buying and financing process. Should you have any further questions, please do not hesitate to contact your Loan Officer for answers.

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E Terms

Earnest Money: A deposit made by a purchaser of real estate to show good faith.

 

Easement: A right, privilege, or interest, to the enjoyment or access of land held by another. An easement is a non-ownership interest in land.

 

Easement by Necessity: The right of an owner to cross over another's property for a special necessary purpose.

 

Easement by Prescription: The continued use of another's property for a special purpose, that over time becomes permanent use if certain legal conditions are met.

 

ECOA (Equal Credit Opportunity Act): Federal legislation, enacted in 1974,  that prohibits a creditor from discriminating on the basis of sex or marital status.  Amended in 1976 to include race, color, religion, national origin, age, income derived from public assistance programs.

 

Economic Depreciation: The effect of external conditions that have reduced the value of a property. Also called economic obsolescence.

 

Economic Life: The remaining period of time that real estate improvements are expected to generate more income, positive cash flow, than operating expenses.  Also called useful life.

 

Economic Obsolescence: The effect of external conditions that have reduced the value of a property.  Also called economic depreciation.

 

Effective Age: The age of a property based on the amount of wear and tear it has sustained.

 

Effective Gross Income (Personal): Normal annual income of an individual, including regular or guaranteed overtime.  It may be from more than one source. Salary/wages are generally the principal source, but other regular, ordinary income may qualify.

 

Effective Rate: The true rate of return considering all relevant financing expenses.  See annual percentage rate.

 

Egress: Access a property, land parcel, has to a public road or other means of exit.

 

EIS (Environmental Impact Statement): An analysis of the expected effects of a development, improvement, or action, on the surrounding natural and fabricated environment.

 

Eminent Domain: The right of the government action to acquire private property for necessary public use by the process of condemnation.  The private owner must be fairly compensated.

 

Encroachment: A building, part of a building, or obstruction, that physically that intrudes, invades, or trespasses, illegally upon another's property.

 

Encumbrance: A right, lien, or claim that affects a property's value.  For example: easements, judgment liens, mortgages, mechanic's liens, deed restrictions, etc.

 

End Loan: A permanent mortgage for a long period of time, 10 year or more, versus a short term or temporary mortgage.

 

Endorsement: 1) The signature on the back of a check, note or other negotiable instrument, as the payee. 2) An addition made to a document, such as a title policy, in order to alter or clarify it. 3) Offering support or credibility to a statement.

 

Energy Efficient: As applied to buildings, indicates the use of extra insulation, weather proofing, and/or special equipment designed to reduce the cost of energy for heating and cooling.

 

Energy Efficient Mortgage: An FHA loan on a property that meets federal guidelines on energy efficiency, and allows a larger portion of the borrower's income to be used for monthly housing costs, on the assumption that less will be spent on heating and cooling the property.

 

Entity: The legal form under which property is owned. Such as: individual ownership, partnership, joint venture, limited partnership, corporation, real estate investment trust, etc.

 

Environmental Impact Statement (EIS): An analysis of the expected effects of a development, improvement, or action, on the surrounding natural and fabricated environment.

 

EPA (Environmental Protection Agency): The federal agency established to enforce federal pollution abatement laws and to implement pollution prevention programs.

 

Equal Credit Opportunity Act (ECOA): Federal legislation, enacted in 1974,  that prohibits a creditor from discriminating on the basis of sex or marital status.  Amended in 1976 to include race, color, religion, national origin, age, income derived from public assistance programs.

 

Equalization Board: A government agency that determines the fairness of taxes levied against properties.

 

Equitable Conversation: A legal doctrine in many states in which, under an agreement of sale, buyers and sellers are treated as if the closing has taken place.  Though the passing has not taken place, effectively, the property vests with the buyer and the seller in possession of the title, is obligated to take care of the property.  A sales contract may specify which which party incurs risk of loss until the closing.

 

Equitable Right of Redemption: During a foreclosure proceeding, a defaulted borrower's right to redeem his property by full payment of the mortgage debt, up to the day of the mortgage foreclosure sale.

 

Equitable Title: The interest held by one who has agreed to purchase, but has not yet closed on the transaction.

 

Equity: The difference between the market value of the property minus the outstanding mortgage balance.

 

Equity Erosion: A loss of equity due to negative amortization, a decline in property value, or a combination of both.

 

Equity Mortgage: A debt secured by a lien against real estate that usually is subordinate to a previous mortgage and is based or given on the amount of equity one has in the real estate.  A second mortgage as it is in the second position behind the first mortgage.

 

Equity Refinance: The borrower obtains a new loan, taking cash out of the equity which has built up, resulting in a larger loan balance than the original loan. Also called a cash-out refinance.

 

Erosion: The gradual wearing away of land through the processes of nature such as water and wind.

 

Escalator Clause: A provision in a lease that requires the tenant to pay more rent based on an increase in costs to the landlord, such as a property tax increase.  All called a stop clause.

 

Escheat: The reversion of property to the state in the event that the owner dies without a will and has no legal heirs.

 

Escrow: An agreement between two or more parties that money, instruments, or property, be held by a third party for safekeeping, pending the fulfillment or performance of specified and agreed conditions.  Normally, a buyers earnest money deposit is held in escrow by a third party such as a Realtor^® until the closing.  A property under agreement is often said to be under escrow.

 

Escrow Account:  An account that a third party holds escrow funds.  An account held by the lending institution to which the borrower pays monthly installments for property taxes, insurance and special assessments, and from which the lender disburses these sums as they become due.

 

Escrow Agent: Any person engaged as a third party to hold escrow funds, instruments, or property.

 

Escrow Agreement:  An agreement to allocate funds to be set aside in a special account to guarantee payments that occur upon specified conditions.  The agreed upon conditions under which escrow is held.

 

Escrow Payment:  The portion of a borrower's monthly payment that is set aside by the lender in an escrow account to pay the taxes, hazard insurance, mortgage insurance, ground rents and other special items as they come due.

 

Estate: The degree, nature, and extent, of interest a party has to real property.

 

Estate at Sufferance: The wrongful occupation of real estate by a tenant after a lease has expired.

 

Estate at Will: The occupation of real estate by a tenant for an indefinite period of time, terminable by one or both parties at will.  A tenancy at will.

 

Estate for Life: An interest in real estate that terminates upon the death of a specified person.  See life estate.

 

Estate for Years: An interest in real estate for a specific and limited period of time, such as a one year lease.

 

Estate Tax: A tax based on the property left by the deceased.

 

Estoppel: A doctrine of law that stops one from denying facts that one once acknowledged were true and others accepted in good faith.

 

Estoppel Certificate: A document by which a fact is certified and therefore prevented from claiming that fact is different.  For example, a tenant without a written lease may be required to sign an estoppel certificate certifying the amount of rent they are paying.

 

et al (et alii): An abbreviation of the Latin et alii, "and others".  Often used in descriptions of real estate ownership, such as John Doe, et al, stating the John Doe and others own the property.

 

et con: A Latin term, "and husband".  Such as Jane Doe, et con for with husband.

 

et ux (et uxor): An abbreviation of the Latin et uxor, "and husband".  Such as John Doe, et ux.

 

Eviction:  A court action to remove a person from possession of real property.  Most commonly, the removal of a tenant.

 

Exclusive Agency Listing: A contract giving only one real estate broker the right to sell the property for a specified time period, and also allows the owner to alone to sell the property without pay a commission.

 

Exclusive Right to Sell Listing: A contract giving only one real estate broker the right to sell the property for a specified time period, regardless if the owner sells the property alone.

 

Exculpatory Clause: A provision in a mortgage allowing the borrower to surrender the property to the lender without personal liability for the loan.

 

Execute: To sign a contract or perform a contract fully.

 

Executed Contract: A contract whose terms have been completely fulfilled.

 

Executor: A person (male), named in a will to carry out its provisions for the disposition of the estate.  See Executrix.

 

Executory Contract: A contract under which one or more, parties have not yet fully performed.

 

Executrix: A person (female), named in a will to carry out its provisions for the disposition of the estate.  See Executor.

 

Exposure: The advertising and marketing of a property for sale.

 

Extended Coverage: Insurance that covers specific incidences normally excluded from a standard insurance policy.

 

Extension: An agreement between two contracted parties to extend the time period to perform specified terms in a contract.  For example, the buyer and seller may agree to an extension to sign the Purchase and Sales Agreement or the closing date.