A home loan not guaranteed by a government agency, such as the FHA or the VA.
A basic assessment of income, assets and credit score to determine what, if any, loan programs a borrower might qualify for. A real estate agent will request a pre-approval or pre-qualification letter before showing a buyer a home.
Or comparable sales, are homes in a given area that have sold within the past several months that a real estate agent uses to determine a home’s value.
An account required by a lender and funded by a buyer’s mortgage payment to pay the buyer’s homeowners insurance and property taxes. A portion of your monthly payment goes into the escrow account to cover taxes and insurance. If your mortgage doesn’t have an escrow account, you may pay the property-related expenses directly.
Prepaid interest owed at closing, with one point representing 1% of the loan. Paying points, which are tax deductible, will lower the monthly mortgage payment.
A buyer’s final inspection of a home before closing.
Market conditions that exist when homes for sale outnumber buyers. Homes can sit on the market for a long time, and prices tend to drop.
Fees associated with the purchase of a home that are due at the end of the sales transaction. Fees may include the appraisal, the home inspection, a title search, a pest inspection and more. Buyers should budget for an amount that is 2% to 5% of the home’s purchase price. Read more about closing costs here.
A deed is the legal document that establishes ownership of real property, and is also used to transfer the ownership of real property to another person or entity.
The amount of the loan divided by the price of the house. Lenders reward lower LTV ratios.
A fee charged to borrowers who make a down payment that is less than 20% of the home’s value. The fee, 0.3% to 1.5% of the yearly loan amount, can be canceled in certain circumstances when the borrower reaches 20% equity.
A government agency created by the National Housing Act of 1934 that insures loans made by private lenders.