The 7 Most Important Homebuying Terms

    Appraisal – A professional analysis used to estimate the value of the home. A necessary step in validating a home’s worth to you and your lender as you secure financing.

    Closing Costs – The fees required to complete the real estate transaction. Paid at closing, they include points, taxes, title insurance, financing costs, and items that must be prepaid or escrowed. Ask your lender for a complete list of closing cost items.

    Credit Score – A number ranging from 300-850 that’s based on an analysis of your credit history. Helps lenders determine the likelihood you’ll repay future debts.

    Down Payment – Down payments vary from 0-20% of the purchase price of the home. This is the upfront equity stake you take in the home.

    Mortgage Rate – The interest rate you pay to borrow money to buy a home. The lower the rate, the better.

    Pre-Approval Letter – A letter from a lender indicating you qualify for a mortgage of a specific amount. This is the most important first step when starting your home search.

    Real Estate Professional – An individual who provides services in buying and selling homes. Real estate professionals are there to help you through the confusing paperwork, find your dream home, negotiate any of the details that come up, and so you know exactly what’s going on in the housing market.

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