Key Terms to Know in the Home Buying Process

The best way to ensure your home buying 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 needs first. One key first step is to help you understand the terms most commonly used in the home buying process. Here is an important few:

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

Down payments are typically 3-20% of the purchase price of the home. Some 0% down programs may also be available.

Ask your lender for more information.

Mortgage Rate

The interest rate you pay to borrow money when buying 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.

This is a critical step in today’s competitive market.

Real Estate Professional

An individual who provides services in buying and selling homes.

Real estate professionals are there to help you through the confusing paperwork, find your dream home, negotiate any of the details that come up, and help you know exactly what’s going on in the housing market.