Key Terms To Know When Buying a Home [INFOGRAPHIC]
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Key terms to know when buying a home:
Appraisal: a report highlighting the estimated value of the property completed by a qualified third party. Lenders rely on an appraisal to validate a home's worth and ensure they are not lending more than a home is worth.
Closing fees: the fees required to complete the real estate transaction and paid at closing. Ask your lender for a complete list of closing cost items, including points, taxes, title, insurance, and more.
Credit score: a number ranging from 300 to 850 that’s based on an analysis of your credit history. This helps Landers determine the likelihood you’ll repay future debts.
Down payment: down payments are typically 3.5% to 20% of the purchase price of the home. So I’m 0% down programs are also available. Ask your lender for more information about what you may qualify for.
Mortgage rate: the interest rate you pay to borrow money when buying a home. As mortgage rates fluctuate consult a lender, so you know how it can impact your monthly mortgage payment.
Preapproval letter: a letter from your lender, that shows what they’re willing to lend you for your home loan. This, plus an understanding of your savings can help you decide on your target price range.
Inspection contingency: in Texas, often referred to as your option period. A provision in the contract, that allows an inspection to be completed. This essential step gives you information on the home's condition and potential repairs.
Affordability: a measure of whether someone earns enough to qualify for a loan on a typical home, based on the most recent price, income, and mortgage rate data.
Equity: the value of your home above the total amount of liens against your home. Many homeowners realize they have more equity than they thought and use it to move. This equity is a result of increased property value and the fact that they have paid down their mortgage overtime with monthly payments.
Appraisal: a report highlighting the estimated value of the property completed by a qualified third party. Lenders rely on an appraisal to validate a home's worth and ensure they are not lending more than a home is worth.
Closing fees: the fees required to complete the real estate transaction and paid at closing. Ask your lender for a complete list of closing cost items, including points, taxes, title, insurance, and more.
Credit score: a number ranging from 300 to 850 that’s based on an analysis of your credit history. This helps Landers determine the likelihood you’ll repay future debts.
Down payment: down payments are typically 3.5% to 20% of the purchase price of the home. So I’m 0% down programs are also available. Ask your lender for more information about what you may qualify for.
Mortgage rate: the interest rate you pay to borrow money when buying a home. As mortgage rates fluctuate consult a lender, so you know how it can impact your monthly mortgage payment.
Preapproval letter: a letter from your lender, that shows what they’re willing to lend you for your home loan. This, plus an understanding of your savings can help you decide on your target price range.
Inspection contingency: in Texas, often referred to as your option period. A provision in the contract, that allows an inspection to be completed. This essential step gives you information on the home's condition and potential repairs.
Affordability: a measure of whether someone earns enough to qualify for a loan on a typical home, based on the most recent price, income, and mortgage rate data.
Equity: the value of your home above the total amount of liens against your home. Many homeowners realize they have more equity than they thought and use it to move. This equity is a result of increased property value and the fact that they have paid down their mortgage overtime with monthly payments.
If you have questions about any of these terms, give me a call I’m here to help! 210-478-8555
Some Highlights
- Buying a home is a major transaction that can seem even more complex when you don’t understand the terms used throughout the process.
- If you’re looking to become a homeowner this year, it’s important to know these housing terms and how they relate to the current market so you feel confident throughout the homebuying process.
- Let’s connect so you have expert answers for any questions as they come up.
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