Gearing up to buy your first home? Real estate is not easy, we get it. There is a lot that goes into buying a house and if you’re a first time home buyer it can get confusing. Here are some important real estate terms that will help you prepare to buy your first home.
- The estimated value of the property
- All the fees and expenses associated with closing on a home, usually around 6 percent of the cost of the home
Comparative Market Analysis (CMA)
- An examination of prices of similar properties in the same area that were recently sold to help determine a reasonable price to list. This is used when selling a home or a price to offer when buying a home.
- Conditions that must be met in order for the offer on a home to proceed. These conditions or contingencies typically fall under three major categories: appraisal, home inspection and mortgage approval.
- Actions that a responsible buyer must address in order to protect the real estate investment. Essentially, doing your homework on the property before you purchase.
Debt to Income Ratio
- In order to qualify for a loan, your monthly debt cannot exceed 43 percent of your monthly income. DTI is one way lenders (including mortgage lenders) measure an individual’s ability to manage monthly payment and repay debts.
Earnest Money Deposit
- Payment made to seller with the offer to show serious intention. Typically held in a trust or escrow account.
- An account where all closing costs are collected while the lender approves the deal.
- A FICO score is a type of credit score created by the Fair Isaac Corporation. Lenders use FICO scores along with other details on borrowers’ credit reports to assess credit risk and determine whether to extend credit.
- The responsibilities of the broker that the real estate agent works for.
- Home Owners Association; the organization that determines community rules and standards
- The day after signing, the ownership of the property will be transferred to the buyer. This is the day you receive the keys!
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