Do you know why is it so important for someone like yourself to know and understand the real estate jargon? You don’t have any experience with the real estate world, however when you are buying a new home knowing such terms come in handy.
Familiarizing yourself with important terms regarding real estate could save you a lot of headaches in the future. Here are some of the terms that you must know before buying a new home:
- Listing Agent – Buyer’s Agent
When you are buying a home, you get to meet two types of agents. One is the buyer’s agent i.e. your agent, and the other one is the home seller’s agent also known as the listing agent. Both the agents represent their clients in a professional manner. However, dual agencies tend to provide a single agent for the buying and selling party. This is something that you need to avoid.
- Adjustable rate and fixed rate mortgages
The regular loans have adjustable and fixed rate mortgages that you can choose from. The fixed rate mortgages have fixed interest rates that extend until the loan ends. It is usually extended for 30 years. The adjustable rate mortgage on the other hand has a flexible interest rate, which usually extends for 5, 7 or 10 years.
- Pre-approval letter
This is important for you to know, a pre-approval letter is what you receive from the bank before you apply for an actual loan. This letter states the amount that the bank is willing to give you in form of a loan. It is suggested that you get this letter before looking for homes so you are familiar with your budget and you can shop smartly.
This is something that you often hear your agents using, listing is basically the information available on a website about a house. It usually includes the price demanded, number of rooms and facilities available within the vicinity.
Once you have made an offer, you have the authority to send someone for the inspection of the house. Inspection can be used in its literal term, a professional goes to the property and checks for potential damages. It usually costs $500 to $800 conditional to what is the current market rate.
An appraisal is required at the time of applying for a mortgage. Your mortgage lender will evaluate the value of the home that you are about to buy and then approve the loan. In many cases if your offer is more than the value, your loan won’t be approved.
- Closing Cost
The closing cost is the amount that you pay when the loan is ending. It is 2 to 5 percent of the total purchase price excluding the down payment. It includes title insurance, loan processing cost, excise tax etc.
The certain terms and conditions that you specify during the process of making an offer are called contingencies.
As a first time homebuyer, Team Couch can be quite helpful for you. Contact them today to learn more about buying your first home!