Home Buying Jargon Simplified

Melissa McCollough

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Published on 03-02-2020

Categories: Articles

Homebuying Jargon Info graphic

Before you dive into the home buying process, it’s good to do your homework and understand important jargon. We’ve compiled a list of home buying words to study up on that can help you feel ahead of the game when you begin the process of finding your home.

Earnest Money

The money you deposit to pay to the seller of the property to show your good faith and intentions of getting a mortgage to buy the property. Depending on if you decide not to complete this purchase, you may or may not get this money back.

Equity

The difference between how much your property is worth and how much you still owe on your mortgage. To make it simpler, remember this equation:  Market value - Mortgage balance = equity.

Pre-Approval

This is an agreement from your mortgage broker in writing that shows you how much you can afford for your home as well as that you have been granted a loan from them. The pre-approval is based on the potential home buyers income, credit history, personal assets, and debts.

PMI

Private Mortgage Insurance. It protects your mortgage lender if you can't keep up with your mortgage payments. So, be sure to factor these into your mortgage costs if you plan on having a down payment that is less than 20% value of the house.

Appraisal

A professional opinion and written estimate of the market value of the home as of a given date. This makes sure that the home you are buying is priced correctly and within the means that your mortgage broker will cover.

HOA Dues

If your property has something called "common insurance" (as is the case with condos and townhomes) or community amenities (like a communal pool) a HOA may manage those items and charge owners a fee which covers a portion of the costs.

Once you’ve studied up and are ready to buy a home, talk options with a Coastal mortgage expert near you.  We’ll roll out the welcome mat with easy mortgage terms that fit your needs perfectly.


All loans are subject to approval.

Sources: statefarm.com and incharge.org


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