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Glossary of Mortgage and Home Equity Terms

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Earnest Money
Funds delivered to the seller or an escrow agency by the purchaser with the purchase agreement as evidence of good faith.
See Equal Credit Opportunity Act.
An improvement that illegally violates another's property or right to use that property.
Anything that affects or limits the fee simple title to property, such as mortgages, liens, leases, easements, or restrictions.
End of Draw
For a home equity line of credit, end of draw is the point at which the draw period ends and the borrower can no longer access the funds. Most line of credit plans have a 10- or 15-year draw period. Depending on the original contract, the borrower may be required to repay the outstanding balance with fully amortized monthly payments that include principal and interest or a single balloon payment.
End of Term
For a balloon home equity line of credit or a balloon home equity loan, end of term is the point at which the outstanding balance becomes due in full.
Equal Credit Opportunity Act (ECOA)
A Federal law requiring lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, sex, age, marital status, receipt of income from public assistance programs, or past exercising of rights under the Consumer Credit Protection Act.
The ownership interest; the portion of a property's value over and above the liens against it. Equity is determined by subtracting the amount owed from the value of the home and would register as a percentage when the difference is divided by the value of the home.
Equity Loan
A loan based on the borrower's equity in his or her home.
An item of value, money, or documents, deposited with a third party, to be delivered upon the fulfillment of a condition. For example, the deposit by a borrower with the lender of funds to pay taxes and insurance premiums when they become due, or the deposit of funds or documents with an attorney or escrow agent to be disbursed upon the closing of a sale of real estate. In some parts of the country, escrows of taxes and insurance premiums are called impounds or reserves.
Escrow Account
The segregated trust account in which escrow funds are held.
Escrow Agent
The person or organization having a responsibility to both the buyer and seller (or lender and borrower) to see that the terms of the purchase/sale (or loan) are carried out. Also called escrow company or escrow depository.
Escrow Payment
That portion of a mortgagor's monthly payments held by a lender or servicer to pay taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due. Also called impounds or reserves in some states.
Estimated Closing Date
See Closing Date.
Estimated Settlement Charges
See Closing Costs.
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