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| Earnest Money | A deposit given by the buyer to the seller of a house to show that he or she is serious about the offer and that is not refundable if the buyer fails to carry out the terms of the offer. |
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| Effective Interest Rate | The cost of credit on a yearly basis expressed as a percentage. Includes up-front costs paid to obtain the loan, and is, therefore, usually a higher amount than the interest rate stipulated in the mortgage note. Useful in comparing loan programs with different rates and points. |
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| Encumbrance | A claim against a property by another party, which usually affects the ability to transfer ownership of the property. |
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| Equity | The difference between the fair market value (appraised value) of your home and your outstanding mortgage balance. |
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| Escrow | Temporary deposit of assets with a third party by agreement between the two parties to a contract. The money is released when the conditions of the contract have been met. |
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