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mortgage loan glossary E

Use the alphabet letters below to navigate to the words in this glossary.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

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Earnest Money Deposit

Funds that are paid to a seller in an offer to purchase property to show good faith that the buyer intends to complete the transaction. The deposit is typically held by real estate brokers or the escrow company. The deposit is deducted from the purchase price at closing and is refundable under certain conditions.
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Equity

Equity is the difference between the fair market value of the property and the amount still owed on its mortgage and other liens. Equity increases as the mortgage is paid down and/or as the property increases in value [see also appreciation]. Similarly, if a home's value decreases, the equity does too.
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Escrow Account (Impound Account)

An account established by the lender for payment of certain recurring costs such as real estate taxes and insurance. The account is funded through a predetermined escrow amount that is included in the monthly mortgage payment (in addition to the principal and interest).The lender uses funds in the escrow account to pay taxes and insurance premiums when they become due. Also known as Impound Account.
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Escrow Payment

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