Real Estate Jargon and Terms for First Time Homebuyers!

Knowing key housing terms and how they relate to today’s market is important. When mortgage rates and home prices rise, it impacts how much home you can afford.

Terms like appraisal (what lenders rely on to validate a home’s value) and the inspection contingency (which gives buyers essential information on a home’s condition) directly impact the transaction.

Buying a home can be intimidating if you’re not familiar with the terms used throughout the process. Lean on a trusted advisor so you have an expert guide and advice for any questions that may come up.

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Appraisal

• ​A report highlighting the estimated value of the property completed by a qualified third party.
• Lenders rely on appraisals to validate a home's value and ensure they're not lending more than the home is worth.

Closing Costs

• The fees required to complete the real estate transaction. Paid at closing.
• Ask your lender for a complete list of closing cost items, including points, taxes, title insurance, and more.

CREDIT SCORE

• A number ranging from 300-850 that's based on an analysis of your credit history.
• This helps lenders determine the likelihood you'll repay future debts.

Down Payment

• Down payments are typically 3.5-20% of the purchase price of the home. Some 0% down programs are also available.
• Ask your lender for more information.

Mortgage Rate

• The interest rate you pay to borrow money when buying​ a home.
• The lower the rate, the better.

Pre-Approval Letter

• A letter from a lender that shows what they're willing to lend you for your home loan.
• This is a critical step in today’s competitive market.

Inspection Contingency

• A provision in a contract requiring an inspection to be completed.
• While it can be tempting to waive in a competitive market, the home inspection is essential. It gives you information on the home's condition and potential repairs.

Affordability

• A measure of whether someone earns enough to qualify for UA a loan on a typical home based on the most recent price, income, and mortgage rate data.
• As prices and mortgage rates continue to rise, that will impact how much home you can afford.

Equity

• The value in your home above the total amount of liens against your home.
• With today’s price appreciation, many homeowners are realizing they have more equity than they thought and they're using it to move.

Margarita

• A cocktail made with tequila and citrus fruit juice, often enjoyed in your new home!

Buying a home can be intimidating if you're not familiar with the terms used throughout the process. Lean on a trusted real estate advisor so you have an expert guide and trusted advice for any questions that may come up.