January 19, 2024

Key Terms when Buying a Home

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Key Terms when Buying a Home

Key Terms when Buying a Home

Buying a home is a big deal and can feel especially complicated if you don't know the terms used during the process. But don't worry. We've got you covered. Keep reading for a list of key housing terms.

Appraisal: A report highlightin the estimated value of the property completed by a qualified third party. Hired by your lender. The appraisal validates the homes value and ensures they're not lending more than the home is worth.

Down Payment: Down payments are typically between 3 and 20% of the purchase price of the home. There are zero down programs available.

Closing Costs: The fees required to complete the transaction. Paid when you close on thehouse. They are in addition to the down payment. They include things like points, taxes, title insurance and more. If you are purchasing you can ask the seller to pay and it can be part of the purchase agreement.

Inspection Contingency: A provision in the purchase agreement that gives you the right to inspect a home. A timeframe to complete the inspection usually 3-10 days is also included. The inspections is an essential step in helping you gather all the information you can on a home.

Mortgage: A loan using your home as collateral. It may also be sued to indicated the amount of money you borrow, with interest to purchase your home. The amount of your mortgage often is the purchase price minue the down payment.

Mortgage Rate: The interest rate you pay to borrow money when buying a home. Mortgage rates fluctuate and impact your purchasing power.

Credit Score: A number ranging from 300-85 that's based on an analysis of your credit history. This helps lenders determine the likelihood you're repay future debt.

Pre-Approval Letter: A letter from a lender that shows what they're willing to lend you for your home loan. This is esstenial for you to understand what you can purchase. You can not write and submit and offer without one.

Let us know what we're missing.

As always from all of us here at Matt Engen Group, thanks for reading.

If you have questions about buying or selling be sure to connect with us here.

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