Brush up on your knowledge of these essential real estate terms.
Today, I want to make sure that you’re up to speed on the meanings of some real estate terms that you may or may not know. This is especially important for first-time homebuyers, who will find the buying process much easier if they understand certain terms.
1. Fixed rate. This means that the interest rate on your loan will remain the same throughout the entire life of the loan.
2. Adjustable-rate mortgage (ARM). This means that your rate can increase after a few years into the life of your loan.
3. FHA loan. This is a type of government-insured loan that will require up to a 3.5% down payment
4. VA loan. Guaranteed by the government, this loan is available to all veterans of the Armed Forces and requires 0% down.
5. Seller subsidy. This is when a seller contributes some money to help pay for the buyer’s closing costs. This could include things like appraisal fees and home inspections.
6. Buydown. If you get a loan and want to reduce the payments for that loan, you can pay 1% or 2% to buy down the interest rate.
7. Closing. This refers to when you go to settlement on a home and the property transfers to your ownership. In the West, this is typically called ‘escrow.’
There is much more to learn if you’re a first-time homebuyer or haven't bought a home in several years. If you have any questions or would like to be refreshed on some important terms, feel free to reach out to me. I look forward to hearing from you.