5 Key Terms To Know When Buying A Home
1. Appraisal
- A report on the estimated value of the property completed by a qualified third party.
Lenders rely on appraisals to validate a home’s value. This ensures that they’re not lending more than the home is worth.
2. Closing costs
- The fees required to complete the real estate transaction. Paid at closing.
Ask your lender or bank for a complete list of closing cost items, including taxes, insurance and more.
3. Credit score
- A number that’s based on an analysis of your credit history. This helps lenders to determine the likelihood you’ll repay future debts.
4. Down payment
- Down payments are typically 10% – 20% of the purchase price of the home. Some 0%-down programmes may be available. Ask your lender for more information about what you may qualify for.
5. Mortgage rate
- The interest rate you pay to borrow money when buying a home.
Mortgage rates fluctuate. Consult a lender to find out how it can impact your monthly mortgage payment.
