Earnest Money Deposit - Fully Indexed Interest Rate

EARNEST MONEY DEPOSIT:
Fully Indexed Interest Rate

EARNEST MONEY DEPOSIT:
In order to close a purchase transaction, a sum of money is to be paid by a potential purchaser that will serve as guarantee of the intention to buy. It is usually the Listing Agent who holds this amount in trust and it will be credited then to the Purchaser off the purchase price. This amount may be forfeited if the Purchaser does not complete the transaction.

EASEMENT:
An owner’s right of one parcel of land to utilize a part of or all of another person’s land for a particular purpose. It runs with the land.  One property is required to be in the dominant position (enjoys the advantage of the easement) while another property will have to be in a servient position (which subjects to the right).

ECONOMIC BASE:
In a community, it is the industrial or commercial institution that grants employment opportunities.

ECONOMIC DEPRECIATION:
The drop in a property’s value because of reasons aside from the property itself.

ECONOMIC LIFE:
The duration that which a real estate’s improvement can be anticipated to offer more value over its upkeep or operating costs.

ENCROACHMENT:
When a neighboring property does an improvement, this is the intrusion across the property line towards another property and a claim for an adverse possession could ensue if the encroachment remains unchallenged for a while.

ENCUMBRANCE:
Refers to an interest, claim or right against a land that registered on title. This changes things especially when the owner wants to sell his or her property.

ENTITLEMENT:
The lawful privilege to a program or benefit.

EQUITY:
In a given currency, this is the difference between the principal owing on debts that is secured against the property and the market value of a certain property. This is also the amount of money that can be kept by the owner after a sale transaction as soon as mortgages are paid out. This is also called as “owner’s interest”.

EQUITY LOAN:
A home owner’s loan that is secure against the equity that the owner benefit from the property.

EQUITY OF REDEMPTION:
The right a borrower needs to compensate in full for a mortgage aligned with a property that ahs been foreclosed or has gone through a power of sale proceedings in order to redeem the property.

ESCALATOR CLAUSE:
Included in a net lease. It is a provision that raises the payable rent which is under a lease when a particular cost of a building grows such as utility charges, taxes, and the like.

ESCAPE CLAUSE:
Any provision stated in a contract allowing one or more parties to terminate the contract when certain events occur.

ESCROW:
A condition wherein legal rights, benefits, consideration, documents, money, or other valuables are transferred to a new party ahead of that party's legal claim to them, basing on the legal claim that will arise at a specific time in the future. Also a form of trust.

EVICTION:
When a tenant is forcibly removal from occupation of a property. Also called "actual eviction". See "constructive eviction".

EXCLUSIVE AGENCY LISTING:
A contract stating that the owner of a property only allows a single broker or agent the exclusive right to market the property that is for sale.

EXCULPATORY CLAUSE:
In reference to a mortgage that gives the borrower the right simply to give up the property to the lender as payment for the loan devoid of the person’s legal responsibility to the borrower for any loss.

EXPROPRIATION:
Occurs when the government is taking title to property that is owned by a private party without the consent of that party under the power of statue or law, while giving reparation to the previous owner.

FAIR MARKET VALUE:
An item’s value as determined by a consideration of the amount an independent buyer would disburse to an independent seller for the item under an absolutely free transaction.

FARM MORTGAGE:
A mortgage obtained for an agricultural land.

FARMLAND:
A category of land for legal purposes such as zoning and characterizes a property that is used for agricultural purposes.

FINANCING:
The method where an anticipated purchaser proposes to make up the difference between the purchase price and cash on hand.

FIRM COMMITMENT:
A pledge from a lender to loan a specific borrower a certain amount of money on individual terms to be secured against a particular property.

FIRM OFFER:
An offer to procure provided to the potential Vendor by a potential Purchaser without any negotiation for changes to the offer.

FIRM PRICE:
A sign in a real estate advertisement that the cost of a property is not negotiable.

FIRST LIEN:
The registered legal claim which takes precedence over others in order to benefit from the earnings from a sale of the property. Usually liens are directed according to registration or time; however, different statutes will let some liens like realty taxes to come first.

FIRST MORTGAGE:
A registered mortgage that comes first in line with the property and will give the lender higher privilege to the proceeds when the property is sold over the other, later claimants.

FIXED INSTALLMENT:
The recurring payment made for both interest and principal on a loan.

FIXED RATE MORTGAGE (FRM):
An interest rate that is predetermined over the course of the mortgage from a loan that is registered on title to the property against which it is secured.
 
FLAT:
Also known as an apartment. It is a part of a building intended to be place for a single family group to make their home.

FLIP:
Happens when one person turns over a piece of property rapidly after that person has bought it for a specific price but sells it instantaneously for more.

FLOATING RATE:
Rate of interest that is charged on a particular loan, which varies according to a certain index or the national prime rate. This loan rate is said to "float" above the particular index by a set amount, for example a Prime Rate plus 2% is set, hence the loan interest rate will become 8% if the Prime Rate will rise to 6%.

FLOOD PLAIN:
Refers to an area in the region of a body of water that could go under water at times and can be dry at some point, depending on the water’s level (ie. rivers, lakes, ponds, etc).

FLOOR:
The lowest point in which an interest rate on an adjustable or variable rate mortgage could get.

FLOOR AREA:
The overall space covered by all the floors in a particular building.

FLOOR AREA RATIO (FAR):
A comparison of the total area of the land with the total area of the floor of a building where it is built. Local zoning rules set the maximum or minimum FARs.

FOR SALE BY OWNER (FSBO):
Signs put up by the owner of a property in hopes of finding a purchaser for the property by himself without the assistance of an agent.

FORBEARANCE:
Refers to a leniency that a party offers another party to a contract who is overdue or behind schedule in meeting the obligations stated under the contract.

FORCED SALE:
When an outside influence such as bankruptcy occurs, a marketing of a property occurs as a result, in which usually prices obtained may not be the most favorable.

FORECLOSURE:
An enforcement process wherein the lender under a defaulted mortgage acquires title of the property for the intentions of selling it to regain money owed while under the mortgage.

FORFEITURE:
Occurs when there is loss of a right, interest, claim, or item of property because of a person’s failure in meeting his legal obligations.

FRACTIONAL INTEREST:
A lawful right or claim to a part of a property.

FREE AND CLEAR:
A tangential description of title to property that is subject to no opposing claims.

FREEHOLDER:
A person who possesses a freehold interest in a property.

FREE-STANDING BUILDING:
Also known as an independent structure that does not depend on other structures for support.

FRONT-END RATIO:
A comparison made between a borrower's monthly gross income and the borrower's cost of housing.

FULL DISCLOSURE:
The revelation of all pertinent information regarding one's possession to the other party in a contract or legal dispute. An agent who is acting for both parties during a real estate purchase should be the one to fully disclose to all parties concerned this conflict of interest.

FULL-PRICE OFFER:
A proposition made by a purchaser to acquire a property on the terms and at the price that is asked by the seller as stated in the property listing.

FULLY AMORTIZING PAYMENT:
A recurring mortgage payment which, if paid constantly during the amortization period of the mortgage, will end in the interest and total principal that is owed with the loan being retired in the last part of the amortization period.

FULLY ASSUMABLE MORTGAGE:
A land loan that is transferrable to a new owner with no changes to the terms, on condition that the new owner is qualified.

FULLY EXECUTED SALES CONTRACT:
An arrangement wherein all parties have consented and signed to every part of the agreement.

FULLY INDEXED INTEREST RATE:
The interest rate that is placed out in the adjustable or variable rate mortgage, equivalent to the index rate added to the float of the mortgage.

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