If you’re just getting into the home buying process, you’re going to run into a whole vocabulary full of new words, here are a few to help you feel less lost as you begin.
Appraisal: Your mortgage lender will require an appraisal of the home you plan to purchase in order to determine it’s market value. They’ll use that value to help figure out the amount to lend to you to buy the home.
Closing Costs: When the property is transferred to you, these are the fees you pay on that day to take possession of your new home. They can include lender’s fees, title insurance, inspection or appraisal fees, attorney’s fees, and more. Good news? Some of these costs are tax-deductible!
Contingency: Buyers might ask to hold off on the closing date until with find another house to buy, when selling you theirs. Or a contingency might state that a buyer doesn’t have to complete the purchase if the inspection is not approved.
Earnest Money: You might pay a small fee to show that you are serious about buying a particular house. If the sale goes through, this fee will be applied to your downpayment.
PITI: This acronym stands for the four major parts of a mortgage payment: Principal (this is the amount borrowed), Interest (interest fee on the principal), Taxes (property taxes), and Insurance (your homeowners’ insurance).
Title: This is the deed to your home that proves ownership and is recorded in your county’s land records office.