A Short Glossary of Key Homebuyer Terms
To help you feel more at ease when buying a home, I’ve compiled a list of key terms that come up during the home buying process
and explained their meaning.
Here is a list of terms you need to know to feel more confident and comfortable during the home buying process:
Appraisal: A professional analysis used by your bank to estimate the value of the property. This includes examples of similar properties that have sold.
Closing costs: The costs to complete the real estate transaction. These costs are in addition to the price of the home and are paid at closing. They include points, taxes, title insurance, financing costs, and processing or transaction fees that must be prepaid or escrowed.
Credit score: A number ranging from 350 to 850 that is based on an analysis of your credit history. Your credit score plays a significant role when securing a mortgage, as it helps lenders determine the likelihood that you’ll repay future debts. The higher your score, the better. In actuality, over 55% of loans approved had scores below 750.
Down payment: The portion of the cost of your home that you pay up front to secure the purchase of the property. Down payments vary widely, and there are zero-down programs available through VA loans or USDA loans for rural areas.
“ Knowing these terms will help you feel more confident and comfortable. “
Escrow: The holding of money or documents by a neutral third party for closing.
Mortgage interest rate: The interest rate you pay to borrow the money to buy your home.
Pre-approval letter: A letter from a mortgage lender indicating that you not only qualify for a mortgage of a specific amount but that your income and assets to purchase the home have also been verified. This is a much stronger letter in a competitive market.
We real estate professionals are here to help you through the confusing paperwork, help you find your dream home, negotiate any of the details that come up, and make sure you know exactly what’s going on in the housing market.
If you need help, we’d like to apply for the job of helping you find your dream home. All you have to do is reach out to us. We look forward to hearing from you.