If you are about to become a first-time home buyer, this is an exciting time for you. However, you should be prepared to immerse yourself in the language of real estate. Here are a few terms that realtors, lenders and other related professionals might be using and what they mean.
We all have heard the word escrow, but it is quite possible that a first-time home buyer won't really understand what this means. Technically, escrow refers to an account that is opened by a third party once the seller and buyer agree on a sales price for a house. An escrow company will hold a check from the buyer in an escrow account, and this basically declares that the seller and buyer are serious about making the deal. Often, the period of time between opening the escrow account and the day you take possession of your new home is simply known as being "in escrow."
Your mortgage is probably going to be a big focus of your life in the coming years, and there are quite a few different types of mortgages. In general, you will hear the terms "fixed" or "fixed-rate" or "adjustable" when you talk with a lender. Your mortgage payment has two parts. One part pays down the amount that you owe the lender or bank. The other part is a payment of interest. A fixed-rate mortgage has a rate of interest that never changes. An adjustable-rate mortgage or ARM can change every year, which means your monthly mortgage payment also can go up or down every year.
The words "closing costs" can strike terror in the minds of a first-time home buyer. There are many costs associated with the closing of an escrow account and the buyer does have to pay quite a few, such as appraisals and title insurance, as well as a host of other expenses. The good news is that the seller generally pays the largest part of closing costs, which is the commission that is paid to the real estate agents.
You might be wondering about the difference between appraisals and inspections. In order to get a loan, the bank or lender will make you pay to have the home appraised. The selling price of the home cannot be more than the value set forth in the appraisal. A bank won't lend money if you are paying more than you should for a home. Inspections are not always required, but definitely crucial, and you will want to pay for a quality home inspection and possibly other inspections such as termite inspections, geological inspections, roof inspections and anything that you might need based upon the age, location and general condition of the property.
There are many other real estate terms to learn, and this is where having a realtor can be a great help. After all, this professional will understand all of this jargon and be able to explain it to you. Don't be shy about asking questions; after all, you are spending a huge amount of your hard-earned money. When you are buying Fredericksburg real estate or real estate anywhere in Texas Hill Country, the real estate team at Nixon Real Estate will be able to help you throughout the whole process.
We all have heard the word escrow, but it is quite possible that a first-time home buyer won't really understand what this means. Technically, escrow refers to an account that is opened by a third party once the seller and buyer agree on a sales price for a house. An escrow company will hold a check from the buyer in an escrow account, and this basically declares that the seller and buyer are serious about making the deal. Often, the period of time between opening the escrow account and the day you take possession of your new home is simply known as being "in escrow."
Your mortgage is probably going to be a big focus of your life in the coming years, and there are quite a few different types of mortgages. In general, you will hear the terms "fixed" or "fixed-rate" or "adjustable" when you talk with a lender. Your mortgage payment has two parts. One part pays down the amount that you owe the lender or bank. The other part is a payment of interest. A fixed-rate mortgage has a rate of interest that never changes. An adjustable-rate mortgage or ARM can change every year, which means your monthly mortgage payment also can go up or down every year.
The words "closing costs" can strike terror in the minds of a first-time home buyer. There are many costs associated with the closing of an escrow account and the buyer does have to pay quite a few, such as appraisals and title insurance, as well as a host of other expenses. The good news is that the seller generally pays the largest part of closing costs, which is the commission that is paid to the real estate agents.
You might be wondering about the difference between appraisals and inspections. In order to get a loan, the bank or lender will make you pay to have the home appraised. The selling price of the home cannot be more than the value set forth in the appraisal. A bank won't lend money if you are paying more than you should for a home. Inspections are not always required, but definitely crucial, and you will want to pay for a quality home inspection and possibly other inspections such as termite inspections, geological inspections, roof inspections and anything that you might need based upon the age, location and general condition of the property.
There are many other real estate terms to learn, and this is where having a realtor can be a great help. After all, this professional will understand all of this jargon and be able to explain it to you. Don't be shy about asking questions; after all, you are spending a huge amount of your hard-earned money. When you are buying Fredericksburg real estate or real estate anywhere in Texas Hill Country, the real estate team at Nixon Real Estate will be able to help you throughout the whole process.
About the Author:
Pammy McGrath enjoys reading about real estate blogs. If you are searching for licensed Texas Hill Country real estate agents, or to discover homes for sale in Fredericksburg TX, please check out the Nixon Real Estate website now.