Debt Consolidation Glossary of Terms

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Glossary - E

earnest money deposit
Money given by a buyer when making a formal offer to demonstrate that the buyer is serious. Also called a deposit.

easement
The right of another to use property. The most common easements are for utility lines.

effective age
An appraiser’s opinion of the physical condition of a building, regardless of its actual age.

encumbrance
A lien, charge or liability against a property.

Equal Credit Opportunity Act (ECOA)
A federal law that prohibits discrimination in credit transactions on the basis of race, color, religion, national origin, sex, marital status, age, source of income or the exercise of any right under the Consumer Credit Protection Act.

equity
The value of a homeowner's unencumbered interest in real estate. Equity is the difference between the home's fair market value and the unpaid principal balance of the mortgage and any liens. Equity increases as the mortgage is paid down and as the property appreciates in value.

escrow
An account in which a neutral third party holds the documents and money in a real-estate transfer until all conditions of a sale are met. Also, an account in which money for property taxes and insurance is held until paid; money is added to the account every time a mortgage payment is made.

escrow account
An account in which money for property taxes and insurance is held until paid; money is added to the account every time a mortgage payment is made.

escrow analysis
A periodic examination of an escrow account to make sure that enough money is being taken from mortgage payments to pay all taxes, insurance and assessments.

escrow company
A neutral third party who holds the documents and money in a real-estate transfer until all conditions are met.

escrow payment
The portion of a homeowner's monthly mortgage payment that is held by the loan servicer to pay for taxes and insurance. Also known as reserves. The loan servicer holds the escrow funds separately from money meant to pay off principal and interest.

estate
All property one owns, including real estate, chattel and investments.

eviction
The act of kicking someone out of a property, usually for violating terms of a lease.

examination of title
A review of public records and title abstracts to determine the chain of ownership of a property.