Key Terms To Know When Buying a Home [INFOGRAPHIC]

Jan 13, 2023 | Buying Myths, Down Payments, First Time Home Buyers, For Buyers, Infographics, Move-Up Buyers

Key Terms To Know When Buying a Home [INFOGRAPHIC] Simplifying The MarketKey Terms To Know When Buying a Home [INFOGRAPHIC] | Simplifying The Market

Some Highlights

  • Buying a home is a major transaction that can seem even more complex when you don’t understand the terms used throughout the process.
  • If you’re looking to become a homeowner this year, it’s important to know these housing terms and how they relate to the current market so you feel confident throughout the homebuying process.
  • Let’s connect so you have expert answers for any questions as they come up.

Buying a home is a major decision, and navigating the process can feel overwhelming—especially when you encounter unfamiliar terms and jargon along the way. Understanding key housing terms is crucial to making informed decisions and feeling confident as you go through the homebuying journey.

Some important terms to know include:

  1. Pre-Approval: This is when a lender evaluates your financial situation to determine how much you can borrow for a home. Getting pre-approved can give you an edge in a competitive market.
  2. Down Payment: The amount of money you put down upfront when purchasing a home. While 20% is often mentioned, many buyers can put down as little as 3-5%, especially with government-backed loans like FHA, VA, or USDA loans.
  3. Mortgage Rate: The interest rate charged on the loan used to purchase the home. Rates can fluctuate based on economic conditions and can significantly impact the overall cost of homeownership.
  4. Closing Costs: Fees that are due at the time of closing, which may include things like title insurance, appraisal fees, and inspection costs. It’s important to budget for these in addition to the down payment.
  5. Equity: The portion of the home that you own outright, which increases as you pay down your mortgage and as the home’s value appreciates.
  6. Appraisal: An independent evaluation of the home’s value, usually required by lenders before approving a mortgage. This ensures the home is worth the loan amount.
  7. Contingency: A condition included in the purchase agreement, such as the need for a successful inspection or securing financing, that allows the buyer to back out of the deal under specific circumstances.

Familiarizing yourself with these terms, along with understanding how they relate to today’s housing market, will help you feel more confident as you move through the process.

Let’s connect so you have a trusted advisor by your side to answer any questions that come up and guide you every step of the way.

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