Buying a Home: Do You Know the Lingo?
Here’s a list of some of the most common terms used in the homebuying process that you’ll want to know.
Appraisal – A professional analysis used to estimate the value of a home. A necessary step in validating a home’s worth to you and your lender as you secure financing.
Closing Costs – The fees required to complete the real estate transaction. Paid at closing, they include points, taxes, title insurance, financing costs, and items that must be prepaid or escrowed. Ask your lender for a complete list of closing cost items.
Credit Score – A number ranging from 300-850 that’s based on an analysis of your credit history. Helps lenders determine the likelihood you’ll repay future debts.
Down Payment – Typically 3-20% of the purchase price of the home. Some 0% down programs are also available. Ask your lender for more information.
Mortgage Rate – The interest rate you pay to borrow money to buy a home. The lower the rate, the better.
Pre-Approval Letter – A letter from a lender indicating you qualify for a mortgage of a specific amount.
Real Estate Professional – An individual who provides services in buying and selling homes. Real estate professionals are there to help you through the confusing documentation, find your dream home, negotiate any of the details that come up, and let you know exactly what’s going on in the housing market.
The best way to ensure your homebuying process is a confident one is to find a real estate pro who will guide you through every aspect of the transaction with ‘the heart of a teacher’ by putting your family’s needs first. – Freddie Mac, My Home Section