Ranch Mirage Real Estate/
June 27th, 2008
Home Buying Terms You Need to Know
House buying can be a tricky procedure. Here are some house buying terms that you will most probably encounter as you purchase your house.
Acquainting yourself with these house buying terms will help you make decisions regarding your purchase.
Amortization is a schedule that outlines your loan payments for the duration of the house buying loan.It details how much of each monthly payment goes toward the principal and how much goes toward the loan. Initially, the bulk of your payments will be applied toward the interest.
Appraisal is Mostly paid for by the house buyer, the appraisal provides an estimate of the asset’s worth. Needed by many lenders, it must be performed by a licensed appraiser before your house loan will be approved.
Buyer’s Agent as opposed to a seller’s agent, represents just the interests of the house buyer. For an agent to be considered a buyer’s agent, an agreement must be made between the buyer and the agent.
Without such an agreement, the agent could end up representing the seller in a real estate transaction.
Closing is the last step in the house buying procedure in which the transfer of the deed is made from the buyer to the seller.
The mortgage is also settled at this point. Closing Costs are required to be paid at the time of closing. Closing costs are normally between 3% and 5% of the price of the house and include such fees as loan origination fees, lawyer fees, and recording fees. As part of your house buying negotiation, you might get the seller to pay some, or all, of the closing costs.
Earnest Money Along with an offer, buyers can make a deposit on the house to demonstrate the seriousness of the offer.If an earnest money deposit is made, it is held by an escrow until closing.It is then added to the down payment.
Escrow are Funds held before closing by a third party, generally including the earnest money deposit.Future taxes and houseowners insurance, held by the mortgage company after closing, are also considered escrow.
FSBO, For Sale By Owner This term refers to asset that is being sold without a real estate agent. FSBO is also used to refer to the house owner who is selling the asset.
Foreclosure is The procedure after house buying is complete by which a lender repossesses and resells a property after the owner has defaulted.
Lien is a legal claim that keeps the asset from being sold till the lien is paid off.
Loan Origination Fee is the fee charged by the lender for processing the loan. The loan origination fee is due at closing.
Private Mortgage Insurance While you make a down payment less than 20 percent of the loan amount, the house buying lender needs you to pay private mortgage insurance.This insurance protects the lender when you default on the loan.
Title Insurance is insurance protects your title from claims against it.
Keep these terms in mind while you go through the house buying procedure.
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