Are you looking to buy, sell, or invest in real estate? If so, you may find yourself confused by all of the unknown terms that are used throughout the process. Good news, you’re not the only one! Check out some common terms and their meanings below to assist you.
View the whole list here that was compiled by Freddie Mac.
- A professional analysis to estimate the value of the property/home. This includes examples of sales of properties that are similar. This validates the value of the property to you and your lender.
- Closing Costs
- The costs to complete the transaction. These costs are in addition to the price of the home and you pay them at closing.
- Down Payment
- This is the portion of the price that you pay up front to secure the purchase of the home. Down payments usually range anywhere between 3-20% of the purchase price of the home.
- The holding of money or documents by a third party before closing.
- Fixed-Rate Mortgage
- A mortgage with an interest rate that does not change. Most of the time they are 15 or 30 years.
- Home Inspection
- A professional inspection of a home to determine the condition of the property. The inspection includes an evaluation of the plumbing, heating and cooling systems, wiring, foundation, and pest infestation.
- Mortgage Rate
- The interest rate you pay to borrow money to buy your house. The lower the rate, the better.
- Pre-approval Letter
- A letter from a mortgage lender indicating that you qualify for a mortgage of a specific amount. This also shows the seller that you are a serious buyer. This can help the process move faster in this competitive market.