The world of real estate has its own language. And just like in many industries, people assume you know what they’re talking about. But ARMs, contingencies, PITI and PMI aren’t common language for everyone. If you’re launching into the world of real estate for the first time or need a refresher, look no further. Check out my last blog on common terms to know and keep reading below. I’ve decoded some more lingo, so you’ll be speaking real estate in no time.
Mortgage lenders require an appraisal of the home you wish to buy. A licensed appraiser will estimate the home’s value. This is done based on comparable homes that have recently sold nearby and an assessment of the property. Your appraisal must be higher than or equal to the purchase price in order for the deal to go through.
Closing costs are the upfront costs or fees you pay when you purchase a home. They tend to run about 2 to 5 percent of the purchase price of your home. This does NOT include the down payment. These costs are made up of taxes, loan-processing costs and title insurance. Talk to your mortgage lender to get a closer idea of your upfront closing cost amount.
Comparative Market Analysis
You will likely hear your realtor speak of doing a CMA. This competitive market analysis is a report of similar homes in the area that were recently sold or are currently on the market. Realtors use this to determine the most appropriate sales price for your home.
Fixed Rate Mortgage
A fixed rate mortgage has a predetermined interest rate for the life of the loan; the most common length is 30 years.
Can you really have a warranty on the 20-year-old home you just bought? Well, yes you can, and it’s often smart to do so. Many sellers will include a year’s home warranty in the sale. Warranties can cover major issues like plumping disasters, and some even cover appliances. Just like health insurance, there are multiple tiers, or levels, of coverage.
This sounds like something you’d need to get before a child could go on a field trip, right? Well, it’s similar, but it’s a notice from your bank stating the amount of house you are approved to purchase. You’ll want to get this before you start house hunting! It will guide you to homes in your price range and speed the process along when you make an offer.
Title insurance protects you by ensuring the seller actually had the rights to the title. It also checks to see that there are no liens on the home, like unpaid taxes, HoA fees, etc. You’ll receive a title report from the insurance company after they complete their check.
If you are planning on a big move soon, contact me. I’m your selling, buying and staging real estate expert. I’m here to answer any questions you have about terms, offers, listings and more. Let’s work together to meet your real estate goals in 2018!
Looking to buy or sell a home in Gainesville, Haymarket and Manassas? Call Realtor® Marcia Goodman at Samson Properties at 703-819-4776.