E – First Colony
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mortgage glossary

A B C D E F G H I J L M N O P R S T U V

Earnest Money

The deposit money given to seller or his agent by the potential buyer at the time of the purchase offer. If the offer is accepted, the money will become part of the down payment.

Equity

In connection with a home, the difference between the value of the home and the balance of outstanding mortgage loans on the home. For example: if your home is worth $100,000 and you owe a total of $70,000 in loans on the home, you have $30,000 total equity.

Escrow

An agreement that money or other objects of value be placed with a third party for safe keeping, pending the performance of some promised act by one of the parties to the agreement. It is common for home mortgage transactions to include an escrow agreement where the borrower adds a specified amount for taxes and hazard insurance to the regular monthly mortgage payment. The money goes into an escrow account out of which the lender pays the taxes and insurance when they come due.