This is a broader measure of your cost for borrowing money.
The APR includes the interest rate, points, broker fees and certain other credit charges a
borrower is required to pay. Because these costs are rolled in, the APR is usually higher than
your interest rate.
A professional analysis used to estimate the value of the property. This includes
examples of sales of similar properties. This is a necessary step in getting your financing secured
as it validates the home’s worth to you and your lender.
The costs to complete the real estate transaction. These costs are in addition to
the price of the home and are paid at closing. They include points, taxes, title insurance,
financing costs, items that must be prepaid or escrowed and other costs. Ask your lender for a
complete list of closing cost items.
A unit in a multiunit building. The owner of a condominium unit owns the unit
itself and has the right, along with other owners, to use the common areas but does not own
the common elements such as the exterior walls, floors and ceilings or the structural systems
outside of the unit; these are owned by the condominium association. There are usually
condominium association fees for building maintenance, property upkeep, taxes and insurance
on the common areas and reserves for improvements.
A plan for something that may occur but is not likely. For example, your offer may
be contingent on the home passing a home inspection. It the home does not pass inspection,
An offer made in response to a previous offer. For example, after the buyer
presents their first offer, the seller may make a counter-offer with a slightly higher sale price.
A number ranging from 350-800, that is based on an analysis of your credit
history. Your credit score plays a significant role when securing a mortgage as it helps lenders
determine the likelihood that you’ll repay future debts. The higher your score, the better, but
many buyers believe they need at least a 780 score to qualify when, in actuality, over 55% of
approved loans had a score below 750.
The percentage of gross monthly income that goes toward paying for
your monthly housing expense, alimony, child support, car payments and other installment
debts, and payments on revolving or open-ended accounts such as credit cards.
This is a portion of the cost of your home that you pay upfront to secure the
purchase of the property. Down payments are typically 3 to 20% of the purchase price of the
home. There are zero-down programs available through VA loans for Veterans, as well as USDA
loans for rural areas of the country. Eighty percent of first-time buyers put less than 20% down
The deposit to show that you're committed to buying the home. The
deposit will not be refunded to you after the seller accepts your offer, unless one of the sales
contract contingencies is not fulfilled.
The holding of money or documents by a neutral third party before closing. It can also
be an account held by the lender (or servicer) into which a homeowner pays money for taxes
A contract that shows both you and the seller of the house have
agreed to your offer. This offer may include sales contingencies, such as obtaining a mortgage
of a certain type and rate, getting an acceptable inspection, making repairs, closing by a certain
A mortgage with an interest rate that does not change for the entire
term of the loan. Fixed-rate mortgages are typically 15 or 30 years.
A professional inspection of a home to determine the condition of the
property. The inspection should include an evaluation of the plumbing, heating and cooling
systems, roof, wiring, foundation and pest infestation.
A loan using your home as collateral. In some states the term mortgage is also used
to describe the document you sign [to grant the lender a lien on your home]. It may also be
used to indicate the amount of money you borrow, with interest, to purchase your house. The
amount of your mortgage is usually the purchase price of the home minus your down payment.
An independent finance professional who specializes in bringing together
borrowers and lenders to complete real estate mortgages.
Insurance needed for mortgages with low down payments
(usually less than 20% of the price of the home).
The interest rate you pay to borrow money to buy your house. The lower the
rate, the better. Interest rates for a 30-year fixed rate mortgage have hovered between 4 and
4.50% for most of 2017.
A letter from a mortgage lender indicating that you qualify for a
mortgage of a specific amount. It also shows a home seller that you're a serious buyer. Having a
pre-approval letter in hand while shopping for homes can help you move faster, and with
greater confidence, in competitive markets.
A letter from a mortgage lender that states that you're pre-qualified to
buy a home, but does not commit the lender to a specific mortgage amount.
If you make a down payment lower than 20% on your
conventional loan, your lender will require PMI, typically at a rate of .51%. PMI serves as an
added insurance policy that protects the lender if you are unable to pay your mortgage and can
be cancelled from your payment once you reach 20% equity in your home. For more
information on how PMI can impact your monthly housing cost, click here.
An individual who provides services in buying and selling homes.
Real estate professionals are there to help you through the confusing paperwork, to help you
find your dream home, to negotiate any of the details that come up, and to help make sure that
you know exactly what’s going on in the housing market. Real estate professionals can refer you
to local lenders or mortgage brokers along with other specialists that you will need throughout
the home-buying process.
The process a lender uses to determine loan approval. It involves evaluating the
property and the borrower's credit and ability to pay the mortgage.