Key terms every homebuyer should know

KEY TERMS Every homebuyer should learn

Pre-Approval

Start your house-hunting journey with a lender’s preliminary nod. Pre-approval signifies your financial readiness, making your offers more attractive to sellers. It’s the competitive edge that says, “ I’m serious about closing.” Start here to pave a smooth path toward your dream home.

Down Payment

Your investment’s cornerstone, the down payment, signals your commitment and begins building equity from day one. It influences your mortgage terms and potential need for PMI (private mortgage insurance). A smart down payment strategy positions you for a favorable financial future.

Credit Score

Your financial handshake. A strong credit score can unlock favorable mortgage rates, translating into lower monthly payments. It’s a measure of trustworthiness that pays dividends in the long run.

Mortgage

Essentially your pathway to homeownership, a mortgage is a tailored financial solution allowing you to spread the cost of your home over time. Selecting the right mortgage type is key to aligning your home with your financial strategy.

Mortgage Rate

The pulse of your mortgage, directly influencing your monthly payments and the total cost over time. Securing an optimal mortgage rate means more money in your pocket for life’s other adventures.

Appraisal

This is the market’s mirror reflecting your future home’s value. An accurate appraisal ensures your investment is sound, protecting both you and the lender from overpaying.

Closing Costs

The final step before keys change hands. These costs cover essential services in the home buying process. Enter this phase with eyes wide open to smoothly transition into homeownership without any surprises.

Inspection Contingency

Your safety net, ensuring the home you desire is a sound investment. This c ontingency allows for a professional home inspection, offering an escape route if significant issues are uncovered, safeguarding your investment.

Equity

Home equity is your financial growth engin e through homeownership—a reflection of your payment progress and property value appreciation. It’s a powerful tool for wealth building and future financial flexibility.