The world of real estate is vast and there are many terms that often seem jargon to people who encounter them for the first time. Knowing important terms can help when making decisions. It also prepares you for the steps that you will go through. Here are some key terms to remember in the housing market.
Affordability refers to how much you can afford. It is relative to a given individual's or household's disposable income. Two main factors that affect affordability are: the housing supply, and the demand for housing.
Appraisal is often referred to as market value. The estimated market value is provided by an authorized appraiser, with a designation from a regulatory body governing the jurisdiction of the appraiser.
The credit score is an analysis of a homebuyer's credit history. It ranges from 300 to 850.
Closing Costs are paid at the end of a real estate transaction, often referred to as Closing. Lenders should know the necessary closing cost items to complete the real estate transaction, so it is imperative to always communicate with them.
While there are 0% down payments available, most down payments are at 3.5 to 20% of the purchase price of the property.
Due Diligence Contingency
Due Diligence Contingency is also called Inspection Contingency. While many first-time home buyers are tempted to waive inspections, this provision in the contract is important because it provides a better idea about the property's real condition.
The amount that you would get after paying off your mortgage after selling is your equity. Some people also refer to it as the difference of the home's total price and the total loanable amount.
Mortgage rate refers to how much interest you need to pay when you borrow money to purchase a home.
Getting pre-approved gives you an edge from other buyers. A pre-approval letter indicates the loan amount that a lender is willing to provide you to purchase a home.
Surely, there are tons of terms to hear and learn about real estate. They might be challenging to memorize, yet there is no need to fret because real estate experts are always there to help. If you haven't found the right realtor to walk you through the process and guide you to your dream home, make sure to contact the best real estate agent in Long Island and the top real estate agent team in town: The Island Wide Team!
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