13 Terms To Know For First Time Home Buyers

13 Terms To Know For First Time Home Buyers

  1. PREQUALIFIED – the first step in the mortgage process. You give your overall financial picture to your lender, they evaluate your info and give you an idea of the mortgage amount you qualify for.

  2. PREAPPROVAL – not the same as prequalification. This is the second step in the mortgage process. You will complete a mortgage application and give the lender DETAILED information; including proof of employment and income. You will most likely not have a house picked out yet, so you will leave the property info blank. The lender will approve you for a specific amount and you will know about what your interest rate will be. Being prequalified and preapproved puts you at an advantage when you find a home as any offer you write will not be contingent on financing.

  3. OFFERS & COUNTEROFFERS – the offer you make to the seller and to purchase real estate. Your offer can be accepted or counteroffered. If your offer is countered, it will state different conditions than what you offered. Your agent will help guide you through this process.

  4. CONTINGENT – your offer on a home has been accepted but a finalized sale is contingent upon certain criteria. Typically these are things like an appraisal; home inspection, mortgage approval or sale of the buyers current home.

  5. EARNEST MONEY – the deposit made to a seller showing the buyer’s good faith in a transaction. Typically held in a trust or escrow account.

  6. HOME INSPECTION – an examination of the properties condition. Usually performed by a qualified home inspector of your choice. As the buyer, you will need to pay for the process.

  7. TITLE – a bundle of rights in a piece of property. The Title Company will provide you with the preliminary title report for you to review before accepting the property.

  8. TITLE INSURANCE – protects you and the lender from the possibility the seller didn’t have free and clear title when they sold you the property. Getting title insurance is a common step in the home buying process.

  9. APPRAISAL – a property and/or land valuation completed by an appraiser who determines the market value. You will generally need this for your lender as they will not loan more than the appraised amount.

  10. CLOSING COST – the fees paid at the end of the transaction either by the seller or buyer or both. They include the taxes, insurance and other lender expenses.

  11. HOME OWNERS INSURANCE – you will need to choose your home owner’s insurance and provide the information to your lender. Be sure to gather 3 or more quotes before choosing.

  12. ESCROW & MONTHLY PAYMENT – your lender may require you to set up an escrow account and a small monthly payment is added to your mortgage payment. This goes towards your property taxes and home owners insurance which is generally due once or twice a year.  Instead the additional payment sits in the escrow account to be paid by the lender when it’s due. Escrow payments are in addition to the principle and interest payment.

  13. SIGNING – your agent will schedule closing as soon as you receive the Okay from your lender. This is when you will be signing for the home. This process usually takes about one hour.

Kelly Pangburn Headshot
Phone: 231-519-1872
Dated: April 20th 2018
Views: 383
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Pangburn Properties, Inc.
28 South Maple Street, P.O. Box 8
Grant, MI