Earnest Money
The portion of the down payment delivered to the seller or escrow agent by the purchaser
with a written offer as evidence of good faith.
ECOA
See Equal Credit Opportunity Act.
Effective Interest Rate
The cost of a mortgage expressed as a yearly rate, usually higher than the interest rate on the mortgage since this figure factors in the up-front costs of acquiring the loan.
Encumbrance
A legal right or interest in a property that affects title and lessens the property value. Encumbrances can take the form of claims, liens, unpaid taxes, etc. These usually must be resolved before a buyer purchases the property.
Equal Credit Opportunity Act (ECOA)
Federal law requiring creditors to make credit equally available without discriminating based on race, sex, color, age, religion, national origin, marital status or receipt of income from public assistance programs.
Equity
The percentage of property value held by the owner; the difference between the current market value of a property and the outstanding mortgage balance
Equity Loan
A loan based on the borrower’s equity in his or her home.
Escrow
A procedure in which a third party acts as a stakeholder for both the buyer and the seller, carrying out both parties’ instructions and assuming responsibility for handling all of the paperwork and distribution of funds.