Glossary of Mortgage Terms

A home buyer's earnest money is a deposit the buyer pays to show the seller they're serious about buying their house. It's usually held in escrow until the deal is done.

An easement is a legal right that lets someone other than the property owner use a certain part of the property for a specific purpose without giving up ownership.

The government has the constitutional right to take private property for public use, as long as the owner is paid a fair amount that is equal to the property's fair market value.

When a structure, fence, or landscaping from one property crosses the line and goes onto a neighbor's land without permission, it’s called an encroachment.

An encumbrance is a claim, lien, or restriction on a property by someone other than the owner that makes it harder to use or move the property.

An energy-efficient mortgage (EEM) is a loan that lets you add the cost of home improvements that save energy to your mortgage so you can pay for them over time instead of all at once.

Equal opportunity housing is a set of federal and state laws that protect people from being discriminated against when they buy, rent, finance, or advertise housing because of their race, religion, sex, national origin, disability, or family status.

A mortgage lender or third-party servicer manages an escrow account, which is a holding account that collects and pays out money for property taxes, homeowners insurance, and other housing costs on behalf of a borrower.

An escrow account is a special account that your mortgage servicer keeps for you. They take part of each monthly payment to pay for property taxes and homeowners insurance when those bills come due.

During a real estate deal, an escrow agent is a neutral third party who keeps money, papers, and property deeds until the buyer and seller meet all of the terms of their contract.