Key Terms to Know When Buying a Home

Are you a first-time homebuyer or maybe you haven’t bought a home in a while? Stay tuned as I’m going to share the key terms to know when buying a home.

What are some of the key terms you need to know when you’re buying a home?

Number 1 (Appraisal), an appraisal is a report highlighting the estimated value of the property completed by a qualified third party. lenders rely on appraisals to validate a home’s value. and ensure they’re not lending more than the home is worth.

Number 2 (Closing Cost), closing costs are the fees required to complete the real estate transaction paid at closing. We also have a video that we did on closing costs specifically so check below for the link for that video. Ask your lender for a complete list of closing costs items including points, taxes, title  insurance, and more.

Number 3 (Credit Score) it’s a number ranging from 300 to 850 that’s based on analysis of your credit history. This helps lenders determine the likelihood you’ll repay future debts.

Number 4 (Down Payments) down payments are typically 3 1/2% to 20% of the purchase price of the home. Some zero percent down payment programs are available so ask your lender for more information on what you may qualify for.

Number 5 (mortgage rate) it’s the interest rate you pay to borrow the money when buying a home. As mortgage rates fluctuate consult with your qualified lender so you’ll know how it can impact your monthly payments.

Number 6 (a pre-approval letter) is from the lender that shows what they’re willing to lend you for your home loan. This lesson understanding of your savings can help you decide on your Target price range and in today’s market you must have a pre-approval letter when submitting your offer to a home seller.

Number 7 (Inspection Contingencies) it’s a provision in the contract requiring an inspection to be completed. This essential step gives you the information on the home’s condition and potential repairs. You may ask the seller to take care of any of the repair items noted in the inspection report but just remember that they don’t have to agree to anything.

Number 8 (Affordability) it’s 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. When home prices and mortgage rates are higher it can impact your affordability.

Number 9 (Equity) it’s the value of your home above the total amount of liens against your home. Many homeowners are realizing they have more Equity than they thought and they’re talking about using it to make a move.

So if that’s you, let’s connect to talk about your options as a home buyer and remember at Thiel Real Estate and Property Management you are always treated like part of our family.